Was Floyds 99 jointly and severally liable for any debts as of December 29, 2024?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
10. BUSINESS RELATIONSHIP
- 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)
Based on the 2025 Floyds 99 Franchise Disclosure Document, Section 10.1 clarifies the business relationship between Floyds 99 and its developers (franchisees). It explicitly states that each party operates as an independent businessperson, with their relationship defined solely by the franchise agreement. This arrangement means that no fiduciary relationship is established between Floyds 99 and its franchisees.
According to section 10.1, neither Floyds 99 nor the franchisee is liable or responsible for the debts or obligations of the other. Furthermore, neither party is obligated for damages arising from the other's business operations. This independence extends to how each party presents itself; neither Floyds 99 nor the franchisee can claim to be an agent, employer, or partner of the other, and neither has the authority to bind the other to any liability.
Section 10.2 further reinforces this separation by stating that Floyds 99 has no liability for the franchisee's obligations to third parties. These obligations include debts to banks, lenders, government agencies, product vendors, and various taxes levied on the franchisee, their property, or the Floyds 99 shop. The only exception is taxes that Floyds 99 is legally required to collect from the franchisee related to purchases from Floyds 99. This comprehensive delineation of responsibilities aims to protect both Floyds 99 and its franchisees from being held liable for each other's financial obligations.