Under what condition will the Face Foundrie franchisor have no liability to the franchisee for exercising its discretion?
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, Face Foundrie will not be liable to the franchisee when exercising its discretion, provided that such discretion is not exercised in bad faith toward the franchisee. This means Face Foundrie has the authority to make decisions and take actions that may affect a franchisee's interests, without being held liable, as long as those decisions are made in good faith.
This discretion is based on Face Foundrie's assessment of its own interests and balancing those interests against the interests of all Face Foundrie Facial Bar owners, including its affiliates, other franchisees, and licensees. Face Foundrie will specifically avoid considering the individual interests of any particular franchisee when making these decisions.
The agreement specifies that, in the absence of bad faith, no third party (such as a judge or arbitrator) can override Face Foundrie's judgment. This clause aims to protect Face Foundrie from legal challenges related to discretionary decisions, provided those decisions are made honestly and without malicious intent toward a specific franchisee. Prospective franchisees should carefully consider this clause, as it limits their ability to hold Face Foundrie accountable for decisions that negatively impact their individual business if those decisions are deemed to be made in good faith for the benefit of the franchise system as a whole.