Is Floyds 99 liable for the debts or obligations of its franchisees?
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, Floyds 99 is not liable or responsible for the debts or obligations of its franchisees. The agreement specifies that the relationship between Floyds 99 and its franchisees is that of independent businesspersons, and no fiduciary relationship is created. This means that each party is responsible for their own financial obligations and liabilities.
This arrangement is typical in franchising, where franchisees operate as independent entities. Floyds 99 will not be obligated for any damages to any person or property directly or indirectly arising out of the operation of the franchisee's business. Furthermore, neither Floyds 99 nor the franchisee can act as an agent, employer, or partner of the other, and neither has the authority to incur liability on behalf of the other.
This separation of liability protects Floyds 99 from the financial risks associated with the operations of individual franchise locations. However, franchisees should be aware that they are solely responsible for managing their debts and obligations, and for any damages or liabilities arising from their business operations. Franchisees must also indemnify Floyds 99 against any claims, obligations, fines, suits, proceedings, demands, and actions arising out of the operation of the Floyd's 99 shop.