Does the Checkers franchise agreement create a fiduciary relationship between the franchisor and franchisee?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
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 between the parties hereto. Franchisor and 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.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, the franchise agreement explicitly states that it does not create a fiduciary relationship between the franchisor and franchisee. The agreement establishes that Checkers and its franchisees are independent contractors.
This means that Checkers does not owe franchisees the same level of legal duty and care that would be required in a fiduciary relationship. Checkers retains the right to make decisions and take actions that may affect a franchisee's interests, as long as those actions are not explicitly prohibited by the franchise agreement. These decisions can be based on Checkers's judgment of its own best interests or the best interests of the franchise network, without necessarily prioritizing the individual franchisee's interests.
Specifically, Checkers is allowed to make decisions even if other reasonable alternatives exist, if the decision benefits Checkers financially, if the decision affects franchisees differently, or if the decision is adverse to a franchisee's individual interests. Checkers will not be liable to the franchisee for any such decisions or actions. This clause underscores the importance of prospective franchisees understanding that the relationship is contractual and not based on a fiduciary duty, and that their interests may not always align with those of Checkers.