Does the Floyds 99 franchise agreement create a fiduciary relationship between the franchisor and franchisee?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
The parties acknowledge that each of them is an independent businessperson, that their only relationship is by virtue of this Agreement and that no fiduciary relationship is created hereunder.
Neither party is liable or responsible for the other's debts or obligations, nor shall either party be obligated for any damages to any person or property directly or indirectly arising out of the operation of the other party's business authorized by or conducted pursuant to this Agreement.
Neither the Franchisor nor the Franchisee will hold themselves out to be the agent, employer or partner of the other and neither the Franchisor nor the Franchisee has the authority to bind or incur liability on behalf of the other.
Source: Item 22 — CONTRACTS (FDD pages 57–58)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, the franchise agreement explicitly states that no fiduciary relationship is created between the franchisor and the franchisee. The agreement specifies that the parties are independent businesspersons, and their relationship is solely defined by the terms of the franchise agreement itself. This means Floyds 99 franchisees should not expect Floyds 99 to act in their best interest as a fiduciary would be legally obligated to do.
This clause also clarifies that neither party is liable for the debts or obligations of the other. Furthermore, neither Floyds 99 nor the franchisee can represent themselves as agents, employers, or partners of each other, and neither has the authority to bind the other to any liability. This reinforces the independent nature of the franchisor-franchisee relationship.
In practical terms, this means a Floyds 99 franchisee must make business decisions independently and bear the risks associated with their business operations. They cannot rely on Floyds 99 to protect their financial interests as a fiduciary would. This is a common arrangement in franchising, where franchisees are considered independent business owners responsible for their own success or failure.