Does the Counselor Realty franchise agreement create a relationship of special trust and confidence?
Counselor_Realty Franchise · 2025 FDDAnswer from 2025 FDD Document
- 13.5 Relationships. You are an independent contractor, not the employee, agent, partner or joint venturer of Counselor. This Agreement does not create a fiduciary relationship or a relationship of special trust and confidence. No person may acquire any interest in or under this Agreement except in accordance with Article 9. No other person except our affiliate is intended to be a beneficiary of this Agreement. If Franchisee is more than one person, all are jointly and severally liable hereunder. If Franchisee is a partnership, corporation or other entity, all of its partners, shareholders or owners from time to time shall execute the guaranty at the foot of this Agreement. We owe no implied duties to you.
Source: Item 22 — CONTRACTS (FDD page 32)
What This Means (2025 FDD)
According to the 2025 Counselor Realty Franchise Disclosure Document, the franchise agreement does not establish a fiduciary relationship or a relationship of special trust and confidence between the franchisor and the franchisee. The agreement explicitly states that the franchisee operates as an independent contractor and not as an employee, agent, partner, or joint venturer of Counselor Realty. Furthermore, Counselor Realty owes no implied duties to the franchisee. This delineation is a standard practice in franchising, where franchisees are considered independent business owners responsible for their own business operations and outcomes.
This aspect of the franchise agreement has significant implications for prospective franchisees. It means that franchisees cannot expect Counselor Realty to act in a fiduciary capacity, which would require the franchisor to prioritize the franchisee's interests above its own. Instead, the relationship is governed by the terms of the franchise agreement, and franchisees are expected to conduct their business with a degree of autonomy and self-reliance. This independence also means that franchisees are responsible for their own business decisions, including managing resources, hiring employees, and ensuring compliance with applicable laws and regulations.
Given this independent contractor relationship, it is crucial for potential Counselor Realty franchisees to carefully review the franchise agreement and seek independent legal and financial advice. Understanding the rights and obligations outlined in the agreement is essential for making informed decisions and managing the risks associated with operating a franchise. While Counselor Realty provides initial and ongoing training and advisory services, the ultimate success of the franchise depends on the franchisee's personal management, resources, and market conditions. Therefore, franchisees should not rely on any guarantees or representations of profitability or success that are not explicitly stated in the franchise agreement or the Franchise Disclosure Document.