Does the Checkers franchise agreement create a fiduciary relationship between the franchisor and area franchisee?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
5.01 Independent Contractors. Neither this Agreement nor the dealings of the parties pursuant to this Agreement shall create any fiduciary relationship or any other relationship of trust or confidence. Franchisor and Area Franchisee, as between themselves, are and shall be independent contractors.
We and you acknowledge and agree that this Agreement (and the relationship of the parties which arises from this Agreement) grants us the right to make decisions, take actions and/or refrain from taking actions not inconsistent with your explicit rights and obligations hereunder that may affect favorably or adversely your interests. You understand and agree that we may operate and change the System and our business in any manner that is not expressly and specifically prohibited by this Agreement. Whenever we have reserved in this Agreement a right and/or discretion to take or withhold an action, or to grant or decline to grant you a right to take or withhold an action, except as otherwise expressly and specifically provided in this Agreement, we may make our decision or exercise our right and/or discretion on the basis of our judgment of what is in our best interests, including our judgment of what is in the best interests of our franchise network, at the time our decision is made, without regard to: (a) whether other reasonable or even arguably preferable alternative decisions or actions could have been made by us; (b) whether our decision or the action we take promotes our financial or other individual interest; (c) whether our decision or the action we take applies differently to you and one (1) or more other franchisees; or (d) whether our decision or the exercise of our rights is adverse to your individual interests or the individual interests of any other particular franchisees. We will have no liability to you for any such decision or exercise of our rights.
Nothing contained in this Agreement, or arising from the conduct of the parties hereunder, is intended to make either party a general or special agent, joint venturer, partner or employee of the other for any purpose whatsoever. You must conspicuously identify yourself in all dealings with customers, lessors, contractors, suppliers, public officials, personnel and others as the owner of development rights granted hereunder and must place such other notices of independent ownership on such forms, business cards, stationery, advertising and other materials as we require at any time and from time to time.
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, the franchise agreement explicitly states that the relationship between Checkers and its area franchisees is that of independent contractors, and the agreement does not create any fiduciary relationship or any other relationship of trust or confidence. This means Checkers is not legally obligated to act in the best interest of the franchisee, and franchisees do not have the same legal recourse they might have in a fiduciary relationship.
Checkers retains the right to make decisions and take actions that may affect a franchisee's interests, whether favorably or adversely. Checkers may operate and change the System and its business in any manner not expressly prohibited by the agreement. When Checkers reserves a right or discretion, it can make decisions based on its judgment of what is in its best interests, including the interests of its franchise network. This can be done without regard to whether other decisions could have been made, whether the decision promotes Checkers' financial interest, whether the decision applies differently to different franchisees, or whether the decision is adverse to a franchisee's individual interests.
Checkers will not have liability to the franchisee for any such decision or exercise of its rights. The agreement also clarifies that nothing within it is intended to make either party a general or special agent, joint venturer, partner, or employee of the other for any purpose. Franchisees must identify themselves as the owners of the development rights granted and place notices of independent ownership on materials as required by Checkers.