Is a fiduciary relationship created between City Wide and the franchisee through the accounting services agreement?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
It is understood and agreed by Franchisee that this Agreement and the provision of Services hereunder by City Wide does not create a fiduciary relationship between them, that the Parties will be independent contractors, and that nothing in this Agreement is intended to make either party a general or special agent, joint venture, partner or employee of the other for any purpose.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, the accounting services agreement does not create a fiduciary relationship between City Wide and the franchisee. The agreement explicitly states that the parties are independent contractors.
Specifically, the document clarifies that nothing within the accounting services agreement is intended to establish either party as a general or special agent, joint venture, partner, or employee of the other for any purpose. This reinforces the independent nature of the relationship.
This means that City Wide is not legally obligated to act in the franchisee's best interest beyond the explicit terms of the accounting services agreement. The franchisee is responsible for providing accurate data to City Wide, and City Wide is not liable for inaccuracies resulting from faulty data provided by the franchisee. This arrangement is typical in franchising, where franchisees operate as independent businesses.