Does Engineering For Kids' management of a franchised business create a fiduciary relationship?
Engineering_For_Kids Franchise · 2025 FDDAnswer from 2025 FDD Document
6.14. General Advice
We will make available to you information about new developments, techniques, and improvements in the areas of operations, management, and marketing, to the same extent as we make the information available to other Engineering For Kids Business franchisees in good standing. We may fulfill our obligation in this section through the distribution of printed or filmed material, an Intranet or other electronic forum, meetings or seminars, individual or group counseling, training programs, telephone communications, or other forms of communications. Limited on-site assistance will be permitted if we have resources available.
6.15. Temporary Management of Franchised Business
In order to maintain the continuity of operation of the Franchised Business and to preserve the integrity of the System, you agree to permit us to enter the premises of the Franchised Business and to operate and manage the Franchised Business ("Management" or "Manage") upon the occurrence of any of the following circumstances: (a) if you abandon or fail, or threaten to abandon or fail, to actively operate the Franchised Business for five (5) or more consecutive days unless otherwise authorized by us; (b) if you fail to operate the Franchised Business as required, or if you intend to close or notify any participants of your intent to close the Franchised Business, (c) if in our reasonable judgment the Franchised Business is in imminent risk of closure due to your financial condition or otherwise; (d) if you fail to complete scheduled Programs or services for clients or participants; (e) if any assets or equipment used in and required for the proper operation of the Franchised Business are repossessed or confiscated by appropriate authorities; and/or (f) upon the death or permanent disability of the you, the Operating Principal, or an Owner of a controlling interest in you that results, in our opinion, in your diminished capacity to properly operate the Franchised Business. We will use reasonable commercial efforts to provide notice to you before exercising our rights under this Section 6.15, but we may enter the premises of the Franchised Business and
Source: Item 23 — RECEIPTS (FDD pages 53–138)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the Engineering For Kids franchise agreement outlines specific conditions under which they may temporarily manage a franchised business. According to Section 6.15, Engineering For Kids can step in to operate and manage the Franchised Business if the franchisee abandons the business for five or more consecutive days without authorization, fails to operate the business as required, intends to close the business, faces imminent risk of closure due to financial condition, fails to complete scheduled programs, or upon the death or permanent disability of the Operating Principal or an Owner with a controlling interest that diminishes the capacity to operate the business properly. Engineering For Kids will try to provide notice before exercising these rights.
The document does not explicitly state that this temporary management creates a fiduciary relationship. However, the agreement stipulates that Engineering For Kids will manage the business to maintain continuity and preserve the integrity of the System. This suggests a responsibility to act in a way that protects the brand and operational standards of Engineering For Kids.
Whether this temporary management constitutes a fiduciary duty would likely depend on the specific legal interpretation in the relevant jurisdiction and the extent of control Engineering For Kids exerts over the business during the management period. A prospective franchisee should seek legal counsel to fully understand their rights and obligations under these circumstances.