Under the Floyds 99 franchise agreement, can a Developer be considered a third-party beneficiary of agreements between the Franchisor and other parties?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 23: RECEIPT]
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, the agreement explicitly states that the relationship between the Franchisor and the Developer is that of independent businesspersons. Specifically, Section 10.1 emphasizes that the agreement does not create any fiduciary relationship. This means neither party is liable for the debts or obligations of the other, and neither can act as an agent, employer, or partner of the other.
Furthermore, Section 10.2 clarifies that Floyds 99 Franchising, LLC has no liability for the Developer's obligations to third parties. These third parties include banks, lenders, government agencies, vendors, or any taxes levied upon the Developer or their Floyds 99 shop. This reinforces the independent nature of the relationship and ensures that the Franchisor is not responsible for the Developer's financial dealings.
Taken together, these provisions suggest that a Developer would likely not be considered a third-party beneficiary of agreements between Floyds 99 Franchising, LLC and other parties, as the agreement is structured to maintain distinct and separate business responsibilities and liabilities. A prospective franchisee should seek legal counsel to confirm this interpretation and understand the full scope of their rights and responsibilities.