Does the Southern Steer franchise agreement create a fiduciary relationship between the franchisor and franchisee?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
25. INDEPENDENT CONTRACTORS
- 25.1. Independent Contractors. Nothing in this Agreement is intended by the parties hereto to create a fiduciary relationship between them nor to constitute the Franchisee as a subsidiary, joint venturer, partner, agent or employee of the Franchisor for any purpose whatsoever. It is understood and agreed that the Franchisee is an independent contractor and is in no way authorized to make any warranty or representation on behalf of the Franchisor, nor is the Franchisee authorized to create any obligation or enter into any contract binding on the Franchisor.
- 25.2. Operation of Southern Steer Business. The Franchisee will be totally and solely responsible for the operation of its Southern Steer Business, and will control, supervise and manage all the employees, agents and independent contractors who work for or with the Franchisee, including the right to hire and fire its employees. The Franchisee will be responsible for the acts of its employees, agents and independent contractors, and will take all reasonable actions necessary to ensure that its employees, agents and independent contractors comply with all federal, state and local laws, rules and regulations including, but not limited to, all discrimination laws, sexual harassment laws and laws relating to the disabled. The Franchisor will not have any right, obligation or responsibility to control, supervise or manage the Franchisee's employees, agents or independent contractors, and will no way be involved in the day-to-day operations of the Franchisee's Southern Steer Business.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, the franchise agreement explicitly states that it does not create a fiduciary relationship between Southern Steer and its franchisees. The agreement specifies that the franchisee is considered an independent contractor and is not authorized to make any warranty or representation on behalf of Southern Steer, nor can they create any obligation binding on Southern Steer. This is a common arrangement in franchising, where franchisees operate their businesses independently.
This means that Southern Steer franchisees are responsible for the operation of their Southern Steer Business, including managing employees and ensuring compliance with all applicable laws. Southern Steer does not have the right or obligation to control or manage the franchisee's employees or day-to-day operations. This reinforces the independent contractor status and clarifies that franchisees are responsible for their own business decisions and actions.
This arrangement is designed to ensure that franchisees operate with autonomy while adhering to the standards and guidelines set by Southern Steer to maintain brand consistency. Franchisees benefit from the established brand and system, but they also bear the responsibility for their business's success and compliance. Prospective franchisees should understand this independent contractor relationship and be prepared to manage their business accordingly.