Does the Burros Fries franchise agreement establish a fiduciary relationship between the franchisor and franchisee?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
OOD, HAD AN OPPORTUNITY TO DISCUSS AND AGREED TO EACH PROVISION OF THIS AGREEMENT. THE FRANCHISEE AND ITS OWNERS AGREE THAT THERE HAS BEEN NO PRESSURE OR COMPULSION BY FRANCHISOR OR ITS AGENTS TO SIGN THIS AGREEMENT.**
FRANCHISEE ACKNOWLEDGES AND AGREES THAT THE SUCCESS OF THE BUSINESS VENTURE CONTEMPLATED TO BE UNDERTAKEN BY FRANCHISEE AND ITS OWNERS IS SPECULATIVE AND WILL BE DEPENDENT ON PERSONAL EFFORTS AND SUCCESS IS NOT GUARANTEED. FRANCHISEE AND ITS OWNERS ACKNOWLEDGE AND REPRESENT THAT IT HAS ENTERED INTO THIS AGREEMENT AND MADE AN INVESTMENT ONLY AFTER MAKING AN INDEPENDENT INVESTIGATION OF THE OPPORTUNITY, INCLUDING HAVING RECEIVED A LIST WITH THE FRANCHISE DISCLOSURE DOCUMENT OF OTHER CURRENTLY AND PREVIOUSLY OPERATED BURROS & FRIES FRANCHISES, IF ANY AT THAT TIME.
| IN WITNESS WHEREOF, the parties hereto have duly executed, sealed and delivered this Burros & Fries Franchise, Inc., Franchise Agreement in duplicate on this , 2022.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
Based on the 2024 Burros Fries Franchise Disclosure Document, the franchise agreement does not explicitly state that a fiduciary relationship is established between the franchisor and franchisee. However, the agreement does include various provisions that outline the responsibilities and obligations of both parties.
The agreement emphasizes the franchisee's acknowledgment that the success of the Burros Fries business is speculative and dependent on their personal efforts. It also states that the franchisee has made an independent investigation of the opportunity before entering into the agreement. Furthermore, the franchisee acknowledges they were advised to have the agreement reviewed by an attorney and that they understood each provision.
While the FDD excerpts do not contain a specific clause creating a fiduciary duty, prospective franchisees should consult with a legal professional to fully understand their rights and obligations under the franchise agreement and applicable state laws. It is important to determine whether the nature of the relationship, as defined by the agreement and relevant laws, could be interpreted as creating a fiduciary duty despite the absence of explicit language.