Does the Dog Haus agreement create a fiduciary relationship between the parties?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
- 14.1 No Fiduciary Relationship. This Agreement does not create a fiduciary relationship between the Parties. Area Developer shall be an independent contractor, and nothing in this Agreement is intended to constitute or appoint either Party an agent, legal representative, subsidiary, joint venturer, partner, employee, or servant of the other for any purpose whatsoever.
- Public Notice of Independent Status. Area Developer shall conspicuously identify itself in all dealings with its customers, contractors, suppliers, public officials, and others, as an independent Area Developer of Franchisor, and shall place such notice of independent ownership on all forms. Franchisor shall have the right to specify the language of any such notice.
- 14.3 Independent Contractor. Area Developer acknowledges and agrees that it is not authorized to make any contract, agreement, warranty, or representation on Franchisor's behalf, or to incur any debt or other obligations in Franchisor's name, and that Franchisor shall in no event assume liability for, or be deemed liable under this Agreement as a result of, any such action, nor shall Franchisor be liable by reason of any act or omission of Area Developer in its conduct of the operation of the Dog Haus Restaurants or for any claim or judgment arising therefrom against Area Developer or Franchisor.
- 14.4 Indemnification. Area Developer and its Owners and Affiliates (collectively, the "Indemnitors") shall indemnify, defend and hold harmless to the fullest extent permitted by Applicable Law, Franchisor, its Affiliates and their respective directors, officers, employees, shareholders and agents (collectively, the "Indemnitees"), from any and all "Losses and Expenses" incurred in connection with any litigation or other form of adjudicatory procedure, claim, demand, investigation, or formal or informal inquiry (regardless of whether same is reduced to judgment) or any settlement thereof, and regardless of whether the same is between Indemnitors and Indemnities (collectively, an "Indemnifiable Claim") which arises directly or indirectly from, as a result of, or in connection with Area
Source: Item 23 — RECEIPTS (FDD pages 87–328)
What This Means (2025 FDD)
According to Dog Haus's 2025 Franchise Disclosure Document, the Area Development Agreement explicitly states that it does not create a fiduciary relationship between the parties. The agreement establishes the Area Developer as an independent contractor, clarifying that neither party is an agent, legal representative, subsidiary, joint venturer, partner, employee, or servant of the other for any purpose. This distinction is crucial as it defines the legal and financial responsibilities of each party.
As an independent contractor, the Area Developer is responsible for identifying themselves as such in all dealings with customers, contractors, suppliers, and public officials. This includes placing a notice of independent ownership on all forms, with Dog Haus retaining the right to specify the language of such notice. Furthermore, the Area Developer is not authorized to make any contracts, agreements, warranties, or representations on Dog Haus's behalf, nor can they incur any debt or obligations in Dog Haus's name.
This arrangement means that Dog Haus will not be liable for any actions or omissions of the Area Developer in the operation of their Dog Haus Restaurants or for any claims or judgments arising from those actions. The Area Developer, in turn, agrees to indemnify, defend, and hold harmless Dog Haus from any losses or expenses incurred due to claims arising from the Area Developer's operations. This indemnification clause underscores the independent nature of the relationship and the allocation of risk between the parties.