Does the Floyds 99 franchisor have liability for the franchisee's obligations to third parties?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
e 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.
- 21.2 Payment of Other Obligations. The Franchisor shall have no liability for the Franchisee's obligations to pay any third parties, including without limitation, banks, other lenders, government agencies, any product vendors, or any sales, use, service, occupation, excise, gross receipts, income, property or other tax levied upon the Franchisee, the Franchisee's property, the FLOYD'S 99 Shop or upon the Franchisor in connection with the sales made or business conducted by the Franchisee (except any taxes the Franchisor is required by law to collect from the Franchisee with respect to purchases from the Franchisor). In addition, the Franchisor shall not be liable for any claims arising from labor or employment law violations committed by the Franchisee or its employees.
- 21.3 Indemnification.
Source: Item 22 — CONTRACTS (FDD pages 57–58)
What This Means (2025 FDD)
According to Floyds 99's 2025 Franchise Disclosure Document, the franchisor is not liable for the franchisee's obligations to third parties. The agreement specifies that Floyds 99 and its franchisees are independent businesspersons and that neither party is responsible for the debts or obligations of the other. This means a franchisee is solely responsible for financial obligations such as loans, vendor payments, taxes, and any claims arising from labor or employment law violations.
This lack of liability extends to damages to any person or property arising from the operation of the franchisee's business. The franchisee cannot claim that Floyds 99 is responsible for these liabilities. This reinforces the independent nature of the franchise relationship, where each party is responsible for managing its own business affairs and legal compliance.
Furthermore, the franchisee is obligated to indemnify, defend, and hold harmless Floyds 99 from any claims, obligations, fines, suits, proceedings, and damages arising from the franchisee's operation of the Floyds 99 shop. This includes any claims related to labor or employment practices, failure to comply with laws, or the use of trademarks and licensed methods not in accordance with the franchise agreement. This indemnification clause places the responsibility for legal and financial liabilities squarely on the franchisee, protecting Floyds 99 from potential repercussions of the franchisee's actions.