Is the Floyds 99 franchisor responsible for the debts or obligations of the franchisee?
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.
- 10.2 Payment of Third-Party Obligations. Franchisor shall have no liability for Developer'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 Developer, Developer's property, the FLOYD'S 99 Shop(s) developed
under this Agreement or upon Franchisor in connection with the sales made or business conducted by Developer (except any taxes Franchisor is required by law to collect from Developer with respect to purchases from Franchisor).
Source: Item 23 — RECEIPT (FDD pages 58–229)
What This Means (2025 FDD)
According to Floyds 99's 2025 Franchise Disclosure Document, the franchisor is not liable or responsible for the franchisee's debts or obligations. The agreement explicitly states that the relationship between Floyds 99 and the franchisee is that of independent businesspersons, with no fiduciary relationship created. This means that each party is responsible for their own financial liabilities and obligations.
This arrangement protects Floyds 99 from being held accountable for the franchisee's financial mismanagement, loans, or any other debts incurred during the operation of the franchise. Similarly, the franchisee is not responsible for the debts of Floyds 99. This is a common arrangement in franchising, as it allows each party to operate independently and manage their own financial risks.
The franchisee is solely responsible for paying third parties, including banks, lenders, government agencies, and vendors. They are also responsible for any taxes levied on their property, the Floyds 99 shop, or the business they conduct. The only exception is taxes that Floyds 99 is legally required to collect from the franchisee related to purchases from the franchisor.