Is a Burneys Sweets More franchisee considered economically dependent on the franchisor?
Burneys_Sweets_More Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 22: CONTRACTS]
18. Obligations upon Termination, Expiration, or Non-renewal.
Upon termination, expiration, or non-renewal of this Agreement, regardless of such reason for termination, expiration, or non-renewal, all rights granted hereunder to Franchisee shall terminate and revert to Franchisor, and Franchisee shall have the following obligations:
- (a) Cease to Operate. Franchisee shall immediately cease to operate the business licensed under this Agreement, and shall not thereafter, directly or indirectly, represent to the public or hold itself out as a BURNEY'S SWEETS & MORE franchisee with respect to such business.
- (b) Cease to use Information. Franchisee shall immediately and permanently cease to use, in any manner whatsoever, all confidential information, methods, procedures and techniques used by or associated with the System, and the proprietary mark BURNEY'S SWEETS & MORE and all other Marks and distinctive forms, slogans, signs, symbols, logos, trade dress, décor, branding materials and devices associated with the BURNEY'S SWEETS & MORE Chain.
- (c) Return Franchisor's Property. Franchisee shall immediately return to Franchisor any property held or used by Franchisee which is owned by Franchisor, including the Customer Lists and Franchised Business Data, and shall cease to use, and either destroy or convey to Franchisor, all signs, advertising materials, displays, stationery, forms, and any other materials that bear or display the Marks. Franchisee shall deliver to Franchisor all login credentials associated with any directory, marketing, Computer Systems, Online Presences, and all other accounts and systems affiliated with the Franchised Business. Franchisee shall immediately deliver to Franchisor all manuals, policy and procedure statements, instructions, Brand Standards Manual, and other materials related to operating the Shop, including, without limitation, brochures, charts and any other materials provided by Franchisor and all copies thereof, and shall neither retain nor convey to another any copy or record of any of the foregoing.
- (v) establish or operate, or license other persons to establish or operate, a BURNEY'S SWEETS & MORE business within any Non-traditional Locations anywhere in the world (including within the Territory).
- (c) Alternate Channels of Distribution. Franchisee may offer and sell approved products and services only on-site from the Shop except as Franchisor otherwise approves in advance, and in such event only in accordance with the requirements of this Agreement and the procedures set forth in the Brand Standards Manual. Franchisee may not offer or sell products through any other means or locations, including via the internet. Unless Franchisee obtains Franchisor's prior written permission, Franchisee shall only offer or sell products and services to retail customers for their use and consumption and not for resale. Franchisee shall not use any unapproved internet, phone, or mobile application capable of accepting orders placed from customers without Franchisor's prior written permission.
- (b) Franchisee Account.
On each Due Date, Franchisee must pay Franchisor the fees set forth above, as well as any other amounts due to Franchisor under this Agreement or any other agreement between Franchisor and Franchisee.
Franchisor may instead transfer these amounts due from the Franchisee's bank operating account ("Account").
If a transfer from Franchisee's Account is refused, an administrative fee of Twenty-Five Dollars ($25) may be assessed, as well as reimbursement to Franchisor of any fee its bank charges for uncollected deposit funds.
If Franchisee has not reported Gross Sales to Franchisor for any fiscal period, Franchisor may transfer from the Account an amount equal to the average of the preceding three (3) months' Gross Sales.
If, at any time, Franchisor determines that Franchisee has underreported its Gross Sales, or underpaid the Royalty or other amounts due to Franchisor under this Agreement, or any other agreement, Franchisor may initiate an immediate transfer from the Account in the appropriate amount in accordance with the foregoing procedure, including interest as provided in this Agreement.
- (vii) Information. Franchisor shall communicate to Franchisee information relating to the operation of a BURNEY'S SWEETS & MORE Shop, and to the extent necessary or pertinent to the operation of the Shop, Franchisor's know-how, new developments, techniques and improvements in the areas of Shop management, employee training, marketing and food preparation and service.
- (c) Acknowledgement. FRANCHISEE AGREES THAT FRANCHISOR IS NOT OBLIGATED TO PROVIDE ANY TRAINING OR ASSISTANCE TO FRANCHISEE'S PARTICULAR LEVEL OF SATISFACTION, BUT AS A FUNCTION OF FRANCHISOR'S EXPERIENCE, KNOWLEDGE AND JUDGMENT.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Burneys Sweets More franchisees could be considered economically dependent on the franchisor. Item 22 outlines several contract terms that, when taken together, suggest a significant reliance on the franchisor for essential aspects of the business. These include the use of the Burneys Sweets More system and marks, adherence to operational standards, and reliance on the franchisor for supply chains and customer access. The agreement specifies that upon termination, expiration, or non-renewal, the franchisee must cease operating the business, stop using confidential information and marks, and return all franchisor's property. These stipulations highlight the franchisee's dependence on the franchisor's brand and system to operate the business.
Furthermore, the franchisor retains considerable control over various aspects of the business, including the right to establish or license Burneys Sweets More businesses in non-traditional locations, and to utilize alternate channels of distribution. The franchisee's ability to offer and sell products is restricted to on-site sales from the shop, unless otherwise approved by the franchisor. The franchisee is also prohibited from selling products through other means, such as the internet, without prior written permission. These limitations on sales channels and territorial rights could increase a franchisee's economic dependence on the franchisor.
Additionally, the franchisor can access the franchisee's bank operating account to collect fees and amounts due, and can also determine if the franchisee has underreported gross sales and initiate a transfer from the account. The franchisor also communicates information relating to the operation of a Burneys Sweets More shop, including know-how, new developments, techniques, and improvements in shop management, employee training, marketing, and food preparation. The franchisee acknowledges that the franchisor is not obligated to provide any training or assistance to the franchisee's particular level of satisfaction, but as a function of the franchisor's experience, knowledge, and judgment. These factors further emphasize the economic interdependence between the franchisee and franchisor, as the franchisee relies on the franchisor's expertise and systems while adhering to the franchisor's operational and financial controls.