Does the Floyds 99 franchise agreement create a fiduciary relationship between the parties?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
- 10.1 Independent Businesspersons. 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 Franchisor nor Developer will hold themselves out to be the agent, employer or partner of the other and neither Franchisor nor Developer has the authority to bind or incur liability on behalf of the other.
Source: Item 23 — RECEIPT (FDD pages 58–229)
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 Floyds 99 and the franchisee. The agreement establishes both parties as independent businesspersons, with their relationship solely defined by the terms of the franchise agreement itself. This means neither party assumes the legal responsibilities of a fiduciary, such as acting in the best interest of the other party.
This provision clarifies that Floyds 99 is not liable for the franchisee's debts or obligations, and vice versa. It also specifies that neither party is responsible for damages arising from the other's business operations. 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 liabilities.
This type of clause is common in franchise agreements to ensure both parties understand their distinct roles and responsibilities. Franchisees should recognize that they are operating their business independently and are responsible for their own business decisions and liabilities. This arrangement differs significantly from a partnership or agency relationship, where fiduciary duties are typically present.