Does Desi District Franchise Group have a duty to take control over the franchisee's business?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
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. Desi District Franchise Group is not a fiduciary of Franchisee. Desi District Franchise Group 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 Desi District Franchise Group'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. Desi District Franchise Group has no liability for Franchisee's obligations to any third party whatsoever.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, Desi District Franchise Group does not have a duty to take control over the franchisee's business. The agreement explicitly states that the relationship between the franchisee and Desi District is that of independent contractors. Desi District is not a fiduciary of the franchisee, nor do they control or have the right to control the franchisee's business operations.
The franchise agreement specifies that any standards and specifications outlined are designed to protect Desi District's interest in its system, marks, and associated goodwill. These standards are not intended to establish control over the franchisee's business or create a duty for Desi District to take control.
Furthermore, Desi District assumes no liability for the franchisee's obligations to any third parties. This reinforces the independent nature of the franchise relationship, where the franchisee is responsible for managing their own business and meeting their obligations without direct control from Desi District.