What is the Face Foundrie franchisor's discretion limited by?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
Additionally, if applicable law shall imply such covenant, the parties acknowledge and agree that (i) this Agreement (and the relationship of the parties which arises from this Agreement) grants Franchisor the discretion to make decisions, take actions and/or refrain from taking actions not inconsistent with Franchisee's explicit rights and obligations hereunder that may affect favorably or adversely Franchisee's interests; (ii) Franchisor will use its judgment in exercising such discretion based on its assessment of its own interests and balancing those interests against the interests of the owners of Face Foundrié Facial Bars generally (including Franchisor's Affiliates and other franchisees and licensees), and specifically without considering Franchisee's individual interests or the individual interests of any other particular franchisee; (iii) Franchisor will have no liability to Franchisee for the exercise of its discretion in this manner so long as such discretion is not exercised in bad faith toward Franchisee; and (iv) in the absence of such bad faith, no trier of fact in any legal action or arbitration proceeding shall substitute its judgment for Franchisor's judgment so exercised.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, the franchisor has discretion to make decisions and take actions that may affect a franchisee's interests. However, this discretion is not absolute. Face Foundrie will use its judgment based on its assessment of its own interests, balancing those interests against the interests of the owners of Face Foundrié Facial Bars generally, without considering a franchisee's individual interests or the individual interests of any other particular franchisee.
Face Foundrie will not be liable to the franchisee for the exercise of its discretion as long as such discretion is not exercised in bad faith toward the franchisee. In the absence of such bad faith, no trier of fact in any legal action or arbitration proceeding shall substitute its judgment for Face Foundrie's judgment so exercised. This means that while Face Foundrie has considerable leeway in making decisions that impact franchisees, it must act in good faith and cannot act maliciously or arbitrarily to harm a franchisee.
This clause is significant for prospective franchisees as it clarifies the extent of Face Foundrie's decision-making power and the limitations placed upon it. While Face Foundrie can make decisions that may adversely affect a franchisee, it cannot do so in bad faith. This provides a degree of protection for franchisees, although the definition of "bad faith" can be subjective and may require legal interpretation in case of disputes. Franchisees should be aware of this provision and understand their rights and recourse in case they believe Face Foundrie has acted in bad faith.