Is Mr. Sandless considered a third-party beneficiary of the franchise agreement?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
18.4 Covenants of Employees, Agents, and Third Persons
You shall require and obtain execution of covenants similar to those set forth in this Section 19.4 (including covenants applicable upon the termination of a person's employment with you) from all employees, contractors or third persons who will have access to Mr. Sandless proprietary and Confidential Information, and shall provide to us to an executed versions thereof. Such covenants shall be substantially in the form set forth in Attachment 4 as revised and updated from time to time and contained in the Manual. You shall indemnify and hold us harmless from any and all liability, loss, attorneys' fees, or damage we may suffer as a result of your failure to obtain executed restricted covenants by employees, agents and third persons as required by this Section.
19. INDEPENDENT LICENSEE; INDEMNIFICATION
19.1 Independent Licensee
You are and shall be an independent licensee under this Agreement, and no partnership shall exist between you and the us. This Agreement does not constitute you as an agent, legal representative, or employee of ours for any purpose whatsoever, and you are not granted any right or authority to assume or create any obligation for or on behalf of, or in the name of, or in any way to bind Franchisors. You agrees not to incur or contract any debt or obligation on behalf of us or commit any act, make any representation, or advertise in any manner which may adversely affect any right of Franchisor or be detrimental to Franchisor or other franchisees of Franchisor. We does not assume any liability, and will not be considered liable, for any agreements, representations, or warranties made by you which are not expressly authorized under this Agreement. We will not be obligated for any damages to any person or property which directly or indirectly arise from or relate to your operations of the Franchised Business. Pursuant to the above, you agree to indemnify Franchisor and hold Franchisor harmless from any and all liability, loss, attorneys' fees, or damage Franchisor may suffer as a result of claims, demands, taxes, costs, or judgments against Franchisor arising out of any allegation of an agent, partner, or employment relationship.
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2025 FDD)
Based on the 2025 Mr. Sandless Franchise Disclosure Document, while the term "third-party beneficiary" is not explicitly used, the FDD does address the relationship between the franchisee, Mr. Sandless, and other parties, particularly concerning obligations and liabilities.
Specifically, the franchise agreement stipulates that the franchisee is an independent licensee and not an agent, legal representative, or employee of Mr. Sandless. The franchisee cannot create any obligations on behalf of Mr. Sandless, and Mr. Sandless does not assume liability for agreements, representations, or warranties made by the franchisee unless expressly authorized in the agreement. This indicates that Mr. Sandless aims to avoid being held responsible for the franchisee's actions towards third parties.
Furthermore, the franchisee is required to obtain confidentiality and non-competition agreements from employees, contractors, or third persons who have access to Mr. Sandless's proprietary and confidential information. The franchisee must indemnify and hold Mr. Sandless harmless from any liability or losses resulting from the failure to obtain these agreements. This highlights Mr. Sandless's efforts to protect its interests and avoid liabilities arising from the actions of third parties associated with the franchisee.
In summary, while the FDD does not directly state that Mr. Sandless is a third-party beneficiary, the provisions regarding independent licensee status, indemnification, and required agreements with third parties suggest that Mr. Sandless structures the franchise agreement to protect itself from liabilities and obligations that could arise from the franchisee's interactions with other parties.