Is Care Plus Medical Ucc considered a fiduciary of the franchisee?
Care_Plus_Medical_Ucc Franchise · 2024 FDDAnswer from 2024 FDD Document
ng arbitration) related to this Agreement or any guaranty, the non-prevailing party shall pay the prevailing party's attorney fees, costs and other expenses of the legal proceeding. "Prevailing party" means the party, if any, which prevailed upon the central litigated issues and obtained substantial relief.
ARTICLE 18. MISCELLANEOUS
- 18.1 Relationship of the Parties. The parties are independent contractors, and neither is the agent, partner, joint venturer, or employee of the other. Care Plus Medical UCC is not a fiduciary of Franchisee. Care Plus Medical UCC does not control or have the right to control Franchisee or its Business. Any required specifications and standards in this Agreement and in the System Standards exist to protect Care Plus Medical UCC's interest in the System and the Marks, and the goodwill established in them, and not for the purpose of establishing any control, or duty to take control, over the Business.
Source: Item 22 — CONTRACTS (FDD page 41)
What This Means (2024 FDD)
According to Care Plus Medical Ucc's 2024 Franchise Disclosure Document, Care Plus Medical UCC is not a fiduciary of the franchisee. The franchise agreement specifies that the parties are independent contractors, and neither party is the agent, partner, joint venturer, or employee of the other. This means that Care Plus Medical UCC does not have the legal responsibilities of a fiduciary to the franchisee.
This distinction is important because a fiduciary relationship implies a duty of loyalty and care, requiring one party to act in the best interests of the other. The absence of a fiduciary duty means that Care Plus Medical UCC is not legally obligated to prioritize the franchisee's financial interests above its own, within the bounds of the franchise agreement.
Furthermore, the FDD states that Care Plus Medical UCC has no fiduciary duty with regard to the Marketing Fund, and the Marketing Fund will be spent at Care Plus Medical UCC's sole discretion. This means that Care Plus Medical Ucc has the right to use the marketing fund as they see fit, and are not legally obligated to use the marketing fund in a way that benefits the franchisee. This is a common practice in franchising, as franchisors often manage marketing funds to promote the brand as a whole, which may or may not directly benefit each individual franchisee.