Is the Pearce Bespoke Franchisor obligated by agreements made by the Franchisee?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor and Franchisee are independent contractors. Neither Franchisor nor Franchisee will make any agreements, representations, or warranties in the name of or for the other or that their relationship is other than franchisor and franchisee. Neither Franchisor nor Franchisee will be obligated by or have any liability under any agreements, representations or warranties made by the other. Franchisee alone will be responsible for all loss or damage arising out of or relating to the operation of Franchisee's business or arising out of the acts or omissions of Franchisee or any of its agents, employees, or contractors in connection with the preparation and sale of products by Franchisee, and for all claims for damage to property or for injury or death of any persons directly or indirectly resulting therefrom. Franchisee acknowledges that the customer list of all Pearce Bespoke or commercial customers shall be the sole and exclusive property of Franchisor, and that Franchisee shall have no ownership rights or interest in the customer list. Franchisee will indemnify Franchisor against and will reimburse Franchisor for all obligations and damages arising out of the operation of Franchisee's business, including all costs Franchisor reasonably incurs in the defense of any such claim brought against it or in any action in which it is named as a party (including reasonable attorneys' fees), including without limitation any claims brought against it related to Franchisee's violations of Privacy Laws. Franchisor will have the right to defend any such claim against it. Franchisor will indemnify Franchisee against and reimburse Franchisee for any obligations or liability for damages attributable to agreements, representations or warranties of Franchisor, or custom by Franchisor's negligence or willful action, and for costs Franchisee reasonably incurs in the defense of any such claim brought against it or in any action in which it is named as a party, provided that Franchisor will have the right to participate in and, to the extent Franchisor deems necessary, to control any litigation or proceeding which might result in liability of or expense to Franchisee subject to such indemnification.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, the franchisor is not obligated by agreements, representations, or warranties made by the franchisee. The agreement explicitly states that neither the franchisor nor the franchisee can make agreements in the name of the other, and neither party has liability for the other's agreements. This reinforces the independent contractor relationship between Pearce Bespoke and its franchisees.
This arrangement means that a Pearce Bespoke franchisee operates their business independently and is responsible for all losses, damages, and claims arising from their business operations, including the actions of their employees or contractors. The franchisee is also responsible for indemnifying Pearce Bespoke against any obligations and damages arising from the franchisee's business operation. This includes covering costs Pearce Bespoke incurs in defending against claims related to the franchisee's business, such as violations of privacy laws.
However, Pearce Bespoke does indemnify the franchisee against obligations or liability for damages attributable to the franchisor's agreements, representations, warranties, negligence, or willful actions. This protection extends to covering the franchisee's costs in defending against claims where Pearce Bespoke is named as a party, with the condition that Pearce Bespoke has the right to participate in and control any litigation that could result in liability or expense to the franchisee. This balanced approach ensures that each party is accountable for their own actions and representations while providing some protection against the other party's liabilities.
This section of the Franchise Agreement clarifies that the franchisee is an independent entity responsible for its own business operations and liabilities, while also outlining the franchisor's responsibility for its own actions. Prospective franchisees should carefully consider these terms and seek legal counsel to fully understand their obligations and potential liabilities when entering into a franchise agreement with Pearce Bespoke.