Does the Hyper Kidz franchise agreement create a fiduciary relationship between the franchisor and franchisee?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
15.1 No Fiduciary Relationship
The parties acknowledge and agree that you shall be an independent licensee and this Agreement does not create a fiduciary relationship between them, and that nothing in this Agreement is intended to constitute either party an agent, legal representative, subsidiary, joint venturer, partner, employee, joint employer or servant of the other for any purpose. You understand and agree that you are and will be an independent contractor under this Agreement. Nothing in this Agreement may be interpreted as creating a partnership, joint venture, agency, employment or fiduciary relationship of any kind. Your employees are not our employees. Neither you nor any of your employees whose compensation you pay may in any way, directly or by implication, shall be considered our employee for any purpose, regardless of inclusion in
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, the franchise agreement explicitly states that it does not create a fiduciary relationship between the franchisor and the franchisee. The agreement establishes the franchisee as an independent licensee, emphasizing that neither party is an agent, legal representative, subsidiary, joint venturer, partner, employee, joint employer, or servant of the other for any purpose. This underscores that the franchisee operates as an independent contractor.
This distinction is crucial because it clarifies that Hyper Kidz franchisees are responsible for the day-to-day control over their business operations. The franchisor's role is limited to setting standards and guidelines within the System, which the franchisee must adhere to while independently managing their Hyper Kidz Business. The agreement ensures that the franchisor's standards do not imply control over the franchisee's daily operations.
Furthermore, the agreement specifies that franchisees are not authorized to make any contracts, agreements, warranties, or representations on behalf of Hyper Kidz, nor can they incur any debt or obligation in the franchisor's name. This reinforces the independent nature of the relationship and protects Hyper Kidz from liabilities arising from the franchisee's actions. Franchisees must also indemnify Hyper Kidz against losses, expenses, or liabilities caused by the franchisee's business practices.