The Franchise Memorandum

In Stites v. Hilton Hotels Corp., 2009 WL 4548351 (Cal. App. 2 Dist., Dec. 7, 2009), the California Court of Appeals upheld a lower court’s grant of summary judgment to Hilton Hotels Corporation on a claim by a would-be hotel patron that he was denied a room because he was accompanied by a disabled person with a service dog. The would-be patron filed suit after the desk clerk at a franchised Hampton Inn refused to rent him a room because his brother had a Great Dane with him, and the hotel did not allow non-service dogs on the premises. The customer claimed that the dog was a service dog, even though it was not wearing a service cape. 

Hilton moved for summary judgment on the ground that it could not be held vicariously liable for the acts of its franchisee, since it had no control over the day-to-day activities of the hotel, nor did it train the desk clerk. The court agreed, finding there was no actual or ostensible agency relationship between Hilton and the franchisee. In rejecting the appellant’s ostensible agency argument, the court gave particular weight to the plaintiff’s testimony that he had just walked into the hotel off the street and had not chosen it for its brand or reputation. The court found that the plaintiff had demonstrated no reliance on representations from Hilton in choosing the hotel, and therefore summary judgment was appropriate.