Under what circumstances is Face Foundrie or its franchisees not liable for failure to perform obligations?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee expressly acknowledges and agrees that Franchisor shall not be liable for the unsatisfactory performance of any contractor, firm, supplier, professional or consultant retained by Franchisee, whether or not designated by Franchisor.
- (b) If applicable law shall imply a covenant of good faith and fair dealing in this Agreement, the parties hereto agree that such covenant shall not imply any rights or obligations that are inconsistent with a fair construction of the terms of this Agreement.
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, Face Foundrie is not liable for the unsatisfactory performance of any contractor, firm, supplier, professional, or consultant retained by the franchisee, regardless of whether Face Foundrie designated them. This means that if a franchisee hires a contractor to build their Face Foundrie Facial Bar and the contractor does a poor job, Face Foundrie is not responsible for the contractor's performance. The franchisee is solely responsible for selecting and managing these third-party service providers.
Furthermore, if applicable law implies a covenant of good faith and fair dealing, it should not imply any rights or obligations inconsistent with a fair construction of the terms of the Franchise Agreement. Face Foundrie retains the discretion to make decisions and take actions that may affect the franchisee's interests, without liability to the franchisee, as long as such discretion is not exercised in bad faith. This means Face Foundrie can make decisions that impact franchisees, and franchisees cannot hold Face Foundrie liable unless they can prove Face Foundrie acted in bad faith.
This allocation of responsibility is fairly typical in franchising. Franchisees are generally considered independent business owners, and as such, they are responsible for their own actions and the actions of those they hire. The franchisor's role is to provide the brand, system, and support, but not to directly manage the franchisee's day-to-day operations or be liable for their independent business decisions. Prospective franchisees should carefully consider this aspect and ensure they are comfortable with the level of autonomy and responsibility they will have as a Face Foundrie franchisee.