Does the Monicals Pizza Franchise Agreement establish a fiduciary relationship between the franchisor and franchisee?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
11. RELATIONSHIP AND INDEMNIFICATION
11.1 Relationship
This Development Agreement is purely a contractual relationship between the parties and does not appoint or make Developer an agent, legal representative, joint venturer, partner, employee, servant or independent contractor of Franchisor for any purpose whatsoever. Developer may not represent or imply to third parties that Developer is an agent of Franchisor, and Developer is in no way authorized to make any contract, agreement, warranty or representation on behalf of Franchisor, or to create any obligation, expressed or implied, on Franchisor's behalf. Under no circumstances shall Franchisor be liable for any act, omission, contract, debt or any other obligation of Developer. In no event shall this Development Agreement or any conduct pursuant hereto make Franchisor a fiduciary with respect to Developer. Franchisor shall in no way be responsible for any injuries to persons or property resulting from the development of any Monical's Restaurant pursuant to this Development Agreement. Any third party contractors and vendors retained by Developer for remodeling or construction are independent contractors of Developer alone.
11.2 Standard of Care
This Development Agreement does not establish a fiduciary relationship between the parties. Unless otherwise specifically provided in this Development Agreement with respect to certain issues, whenever this Development Agreement requires Developer to obtain Franchisor's written consent or permits Franchisor to take any action or refrain from taking any action, Franchisor is free to act in its own self-interest without any obligation to act reasonably, to consider the impact on Developer or to act subject to any other standard of care limiting Franchisor's right, except as may be provided by statute or regulation.
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to Monicals Pizza's 2025 Franchise Disclosure Document, the Development Agreement does not establish a fiduciary relationship between the parties. The agreement is considered a contractual relationship, and the developer (franchisee) is not appointed as an agent, legal representative, joint venturer, partner, employee, servant, or independent contractor of Monicals Pizza for any purpose. The franchisee cannot represent themselves as an agent of Monicals Pizza or create any obligations on behalf of Monicals Pizza.
Monicals Pizza is not liable for any act, omission, contract, debt, or any other obligation of the franchisee. Furthermore, Monicals Pizza will not be considered a fiduciary with respect to the franchisee due to the Development Agreement. Monicals Pizza is not responsible for injuries to persons or property resulting from the development of any Monicals Restaurant.
Monicals Pizza is free to act in its own self-interest without any obligation to act reasonably or consider the impact on the franchisee, except as may be provided by statute or regulation. This means that Monicals Pizza is not bound to a fiduciary duty unless explicitly stated in the Development Agreement or required by law.