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Posts in Vicarious Liability.

A state court in Connecticut recently granted summary judgment to Days Inns Worldwide, Inc. in a slip and fall case. Lacertosa v. Days Inns Worldwide, Inc., 2022 WL 1051147 (Sup. Ct. Conn. Mar. 30, 2022).

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A federal court in Missouri recently granted summary judgment to the franchisor of the Hardee’s restaurant system, its parent company, and an affiliate on claims that they were vicariously liable for the fatal electrocution of a child on the playground of a franchised restaurant in Amman, Jordan. Hersh v. CKE Rest. Holding’s Inc., 2022 WL 407124 (E.D. Mo. Feb. 10, 2022).

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An appellate court in Tennessee affirmed denial of a “Motion to Correct Misnomer,” which resulted in dismissal of a premises liability action for injuries allegedly sustained in a fall at a Long John Silver’s restaurant. Bodine v. Long John Silver’s LLC, 2022 WL 128473 (Tenn. Ct. App. Jan. 14, 2022).

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A federal court in Texas recently denied franchisor Kiddie Academy Domestic Franchising’s motion for summary judgment, rejecting the argument that Kiddie Academy bore no liability under its franchise agreement for the negligence of one of its franchisees.

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In another vicarious liability case, a federal court in Tennessee granted summary judgment in favor of Country Inn & Suites By Radisson, dismissing claims that it was liable for the alleged actions of its franchisee’s employee.

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In another vicarious liability case, a Delaware Superior Court denied franchisor Hand and Stone’s motion to dismiss, allowing vicarious liability claims based on the alleged sexual misconduct of its franchisee’s former employee to go forward. Jane Doe v. Massage Envy Franchising, LLC, 2021 WL 62643 (Del. Super. Ct. Jan. 7, 2021). The plaintiff alleged she was sexually assaulted while receiving a massage by Massage Envy employee, Christopher Dorman. She further alleged that Dorman was previously employed by a franchisee of Hand and Stone, that Dorman had engaged in ...

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A federal court in New Jersey granted the motion for summary judgment filed by Doubletree hotel franchisor, Hilton Franchise Holdings, LLC, and its affiliate (collectively “Hilton”), finding that Hilton was not liable for the tragic accidental drowning of a child in a franchised Doubletree hotel’s pool. Burnet v. Hilton, 2021 WL 118924 (D.N.J. Jan. 13, 2021). The victim’s family claimed that Hilton, the third-party hotel management company, and the Hilton franchisee were all negligent in causing the child’s death. At summary judgment, the family argued that Hilton ...

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A federal Court in New Jersey granted summary judgment after finding that the franchisor did not owe a duty of care to the plaintiff, who was shot in an armed robbery at a 7-Eleven store operated by a franchisee. Boutahli v. 7-Eleven, Inc., 2020 WL 3287127 (D.N.J. June 18, 2020). On January 10, 2014, Boutahli was the only employee working at a 7-Eleven store in Pennsauken, New Jersey. Just after midnight, two men walked into the store, demanded the contents of the cash register, and pistol-whipped and shot Boutahli four times before fleeing the scene. While Boutahli survived the attack, he ...

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A federal court in Ohio denied G6 Hospitality and Wyndham’s motions to dismiss claims that they are vicariously liable for federal sex trafficking claims brought against their franchisees. H.H. v. G6 Hospitality, LLC, 2019 WL 6682152 (S.D. Ohio Dec. 6, 2019). H.H., the sex trafficking victim, alleged that she was trafficked for a period of five months at various Columbus area hotels within G6 and Wyndham’s franchise systems. H.H. claimed that the hotels were or should have been aware of the sex trafficking after seeing various items or witnessing certain events, and the hotels ...

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Burger King has prevailed on its motion for summary judgment in a lawsuit related to a slip and fall incident that occurred at a franchised restaurant. Cram v. Burger King Corp., 2019 WL 4095570 (D.N.H. Aug. 29, 2019). The incident occurred when plaintiff Elizabeth Cram’s foot got caught in a child’s highchair improperly placed next to the restroom entrance, causing her to fall and tear her Achilles tendon. Plaintiffs asserted negligence and vicarious liability claims against Burger King because it was the owner and lessor of the restaurant at issue. Burger King filed a motion for ...

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National real estate firm RE/MAX may be held vicariously liable for the fraudulent conduct of its former broker, a Delaware court recently held, finding that the plaintiffs adequately pled that the former broker acted as an apparent agent of RE/MAX. Patel v. Sunvest Realty Corp., 2018 WL 4961392 (Del. Super. Ct. Oct. 15, 2018). The dispute arose when a real estate broker formerly employed by a franchised branch of RE/MAX allegedly embezzled funds from a group of promissory note holders. After the former broker declared bankruptcy, the investors brought claims of vicarious ...

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A Florida appellate court recently affirmed the denial of Domino’s Pizza’s request for a directed verdict on its vicarious liability for the actions of its franchisee’s employee, but remanded the case for a new trial as a result of the opposing counsel’s improper closing argument. Domino’s Pizza, LLC v. Wiederhold, 2018 WL 2165224 (Fla. Dist. Ct. App. May 11, 2018). The plaintiff sued Domino’s on a vicarious liability theory after a franchisee’s delivery driver cut off the plaintiff’s husband in traffic, which resulted in a serious accident, and contributed to the ...

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The United States District Court for the Central District of California dismissed a putative class action complaint against franchisor Jackson Hewitt Tax Service on the grounds that the plaintiff had not sufficiently pled claims for fraud and vicarious liability against Jackson Hewitt for fraudulent conduct that was done by a rogue employee of the franchisee. Lomeli vs. Jackson Hewitt, Inc., 2017 WL 4773099 (C.D. Cal. Oct. 19, 2017). The aggrieved customer of the franchisee alleged, in part, that the franchisee submitted returns to the IRS without the customer’s permission ...

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The United States District Court for the Northern District of Alabama has granted summary judgment in favor of franchisor Wintzell’s Franchise Company on vicarious liability claims lodged against it by Jose Ruiz, a customer of franchisee Wintzell’s Huntsville. Ruiz v. Wintzell’s Huntsville, LLC, 2017 WL 4305004 (N.D. Ala. Sept. 28, 2017). Ruiz developed a severe infection after eating raw oysters at Wintzell’s Oyster House, a restaurant owned and operated by Wintzell’s Huntsville under a franchise agreement with Wintzell’s Franchise. Ruiz claimed that ...

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In another form of vicarious liability case, a court in Idaho granted summary judgment in favor of a franchisor and its corporate parent, after an employee of a franchised Taco Bell restaurant was accused of giving automatic discounts to white military customers but not to military members of color. McKinnon v. Yum! Brands, Inc., 2017 WL 3659166 (D. Utah Aug. 24, 2017). The plaintiffs, members of the Army National Guard, alleged that they went to the franchised restaurant with a group of other military members that included four Caucasians. Only after the group members had purchased ...

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An appellate court in Illinois upheld a trial court’s dismissal of a suit for emotional distress against a franchisor and a franchisee by two of the franchisee’s customers who were filmed in a franchised Planet Fitness gym’s tanning room without their knowledge or consent. C.H. v. Pla-Fit Franchise, LLC, 2017 IL App. 3d 160378 (Ill. App. Ct. Aug. 23, 2017). The court rejected the plaintiffs’ arguments that the franchisor, Pla-Fit, was liable for the tortious acts of the franchisee’s employee based on the special relationship between Pla-Fit and its franchisee and ...

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A federal court in the Western District of Washington granted a personal injury plaintiff’s motion to amend, filed in response to the franchisor’s motion to dismiss. Johnson v. Marriott Int’l Inc., 2017 WL 1957071 (W.D. Wash. May 11, 2017). After sustaining an injury in a trip-and-fall incident at a franchised Marriott hotel in Bangkok, Thailand, the plaintiff, Johnson, sued Marriott. Johnson did not sue the Thai franchisee. Marriott moved to dismiss, arguing that it did not own the Thai hotel or have responsibility for the hotel’s operation or management. In response ...

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Last month, the United States Court of Appeals for the Fourth Circuit affirmed the District of Maryland’s holding that a hotel franchisor was not responsible for a guest’s death at one of its franchised hotels. DiFederico v. Marriott Int’l, Inc., 2017 WL 444690 (4th Cir. Feb. 2, 2017). The guest was killed in the September 20, 2008 terrorist attack on the Marriott Islamabad, a hotel owned and operated by one of Marriott International’s franchisees. The guest’s family brought a wrongful death suit against Marriott but did not name the franchisee as a defendant. The Fourth ...

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The Kentucky Court of Appeals recently affirmed the dismissal of a complaint against six Domino’s Pizza entities on a motion for summary judgment. Johnson v. Seagle Pizza, Inc., 2016 WL 4410705 (Ky. Ct. App. Aug. 16, 2016). The case arose from a robbery at a Domino’s franchise in Kentucky. At the time of the armed robbery, Crystal Roberts, an employee of the franchise, was on break behind the store, talking on the phone with her boyfriend, who lived a block away. The robber forced Roberts back into the store and demanded money. As the assailant was fleeing, he shot and killed Roberts’ ...

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A federal district court in Pennsylvania recently denied a motion to dismiss filed by the franchisor of Friendly's restaurants in which Friendly's argued that a putative class of restaurant employees asserting violations of the Fair Labor Standards Act ("ELSA") and other state labor and wage laws had failed to plead facts sufficient to establish that Friendly's and its franchisees were joint employers. Reed v. Friendly's Ice Cream, LLC, 2016 WL 2736049 (M.D. Pa. May 11, 2016). To determine whether Friendly's could be considered a joint employer under the FLSA, the court applied the ...

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Meanwhile, the Kentucky Supreme Court recently held that the franchisor of the Quizno's system, QFA Royalties, LLC ("QFA"), did not have up-the-ladder liability for a  workers' compensation claim brought by an employee of one of its franchisees. Uninsured Employers' Fund v. Crowder, 2016 WL 2605624 (Ky. May 5, 2016). The injured worker was employed by a Quizno's franchisee whose workers' compensation insurance had lapsed. The state's Uninsured Employers' Fund paid the employee's benefits and sought reimbursement from QFA under a Kentucky statute that imposes workers ...

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A Massachusetts state appellate court has affirmed a trial court holding that Domino's Pizza LLC was not liable when a pizza delivery driver was robbed, kidnapped, and killed while making an early morning delivery. Lind v. Domino's Pizza LLC, 87 Mass. App. Ct. 650 (Mass. App. July 29, 2015). The plaintiffs—the parents and co-administrators of the victim's estate—brought a wrongful death action against Domino's on theories of vicarious liability, negligence, and negligent supervision and training.

Observing that courts have "consistently" determined that franchisors are ...

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In Espinosa v. Accor North America, Inc., 2015 La. App. LEXIS 2294 (La. App. July 8, 2015), the Louisiana Court of Appeal affirmed a lower court ruling that franchisor could not be held liable for injuries sustained by a guest who was shot at a Motel 6 location owned by a franchisee. Espinosa, who became a paraplegic as a result of the shooting, alleged that a broken gate enabled the armed robber to enter the parking lot. As against the franchisor, Accor, Espinosa asserted claims of direct negligence and vicarious liability, with the vicarious liability claim based on alleged actual and ...

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The Texas Court of Appeals recently overturned a jury verdict that had found the Domino's franchisor vicariously liable for a death and serious injuries resulting from an accident caused by the defective vehicle of a delivery driver. Domino's Pizza, LLC v. Reddy, 2015 Tex. App. LEXIS 2578 (Tex. Ct. App. Mar. 19, 2015). The court observed that whether a franchisor may be held vicariously liable for the acts of its franchisees depends on whether the franchisor had the right to the control the injury causing conduct. Reddy, a representative of the victims, argued that Domino's controls ...

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In Vann v. Massage Envy Franchising, LLC, 2015 U.S. Dist. LEXIS 1002 (S.D. Cal. Jan. 6, 2015), the United States District Court for the Southern District of California found that Massage Envy Franchising was not the employer or a joint employer of its franchisees' employees, and therefore was not liable for any alleged wage and hour law violations. Vann, a former employee of two franchised spas, alleged Massage Envy exercised control over hiring and firing because it: (a) provided franchisees with operations manual containing suggested personnel policies; (b) hired district ...

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Despite various procedural efforts by McDonald's, it remains unclear what specific conduct the NLRB contends makes a franchisor—even McDonald's—a "joint employer" with its franchisees. As is well known in franchising circles, on Dec. 19, 2014, the NLRB Office of the General Counsel (GC) issued 13 complaints involving McDonald's USA, LLC and 21 of its franchisees, consolidating 78 alleged violations of labor laws including "discriminatory discipline, reduction in hours, discharges and other coercive conduct directed at employees in response to union and protected ...

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As has been widely reported in the media, the National Labor Relations Board last month filed complaints in 13 regional NLRB offices charging multiple McDonald’s franchisees with unfair labor practices relating to union organizing activities at McDonald’s franchised restaurants across the country. The NLRB also alleged that McDonald’s USA, LLC is liable for the alleged labor violations as a “joint employer” with its franchisees. The claims against the McDonald’s franchisees allege a variety of unfair labor practices, including reducing working hours ...

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The United States District Court for the Central District of California declined to extend the test for imposing employer liability established by the California Supreme Court in Patterson v. Domino’s Pizza, LLC, S204546 (Cal. Aug. 28, 2014) (reported on in Issue 184 of The GPMemorandum) beyond the franchise context. Ambrose v. Avis Rent a Car Sys., Inc., 2014 U.S. Dist. LEXIS 170406 (S.D. Cal. Dec. 8, 2014). Ambrose had entered into an “independent operator” agreement to operate a Budget Rent a Car business. The court found that the agreement was indistinguishable from a ...

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In an opinion generally favorable to the franchisor in a unit franchisee's attempt to impose vicarious liability on the franchisor for the actions of its master franchisee, the United States District Court for the District of Massachusetts recently granted in part and denied in part a franchisor's motion for summary judgment. Depianti v. Jan-Pro Franchising International, Inc., 2014 U.S. Dist. LEXIS 116943 (D. Mass. Aug. 22, 2014). At issue was the unit franchisee's claims of misrepresentation and unfair and deceptive business practices based on the conduct of Jan-Pro's master ...

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The United States Court of Appeals for the Ninth Circuit has affirmed a California district court's dismissal of a vicarious liability claim against a franchisor based on an advertising text message sent by its franchisee. Thomas v. Taco Bell Corp., 2014 U.S. App. LEXIS 12547 (9th Cir. July 2, 2014). The plaintiff, who received the text message advertising a Taco Bell product, alleged violation of the Telephone Consumer Protection Act (TCPA), which makes it unlawful to make automated mass-marketing communications to a cell phone. The text message was a promotion by an association of ...

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In a highly anticipated case involving franchisor vicarious liability, the California Supreme Court ruled, in a 4-3 decision issued today, that Domino’s is not vicariously liable for the acts of a franchisee’s employees. Patterson v. Domino’s Pizza, LLC, Case No. S204543 (Cal. Aug. 28, 2014).

The case began when Patterson, a teenage worker at a Domino’s franchise, filed an action against both the franchisee (Sui Juris) and Domino’s alleging that the assistant manager of the restaurant sexually harassed and assaulted her. Patterson claimed that Sui Juris and ...

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A federal district court in New Mexico held that a franchisor may be liable for its franchisee’s failure to provide a safe working environment after an armed robbery resulted in the death of the franchisee’s employee. In Estate of Anderson v. Barreras, Bus. Franchise Guide (CCH) ¶ 15,181 (D.N.M. Nov. 13, 2013), the plaintiff brought a wrongful death action against the franchisee and the franchisor, Denny’s, Inc., alleging that they were liable for the employee’s death by failing to properly train personnel on emergency procedures, failing to implement adequate security ...

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A federal district court in Arizona recently held that a franchisor was not liable for Title VII claims brought by an employee of one of its franchisees. In Courtland v. GCEPSurprise, LLC, 2013 U.S. Dist. LEXIS 105780 (D. Ariz. July 29, 2013), the plaintiff sued a franchisee as well as the franchisor, Buffalo Wild Wings, alleging that she was subject to sexual discrimination, harassment, and retaliation by members of the restaurant’s management staff. Buffalo Wild Wings moved for summary judgment on the plaintiff’s claims and argued that it could not be held liable for her ...

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A federal district court in Utah last week denied summary judgment for the defendant franchisor in a case involving a Legionnaires’ disease outbreak at a franchised hotel. Licari v. Best Western International, Inc., et al., 2013 U.S. Dist. LEXIS 97725 (D. Utah July 12, 2013). The court found that the plaintiff, who became ill after staying at the hotel, could proceed against the franchisor on two agency-based liability theories. First, the court found enough evidence to suggest that the franchisee was an “actual agent” of the franchisor. The most significant evidence in that ...

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In Depianti v. Jan-Pro Franchising International, Inc., 2013 Mass. Lexis 472 (Mass. June 17, 2013), the Supreme Judicial Court of Massachusetts ruled that in analyzing vicarious liability claims against a franchisor, a modified right of control test should be applied. In addition, the court held that a franchisor can be sued by a franchisee for alleged worker misclassification even if there is no written contract between the franchisor and the franchisee. Jan-Pro operates a multi-tier janitorial services franchise system, in which it enters into agreements with master ...

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An Oklahoma appellate court rejected a trial court’s decision that had found Ford Motor Company vicariously liable to disgruntled customers of a now-defunct dealership. Thornton v. Ford Motor Co., Bus. Franchise Guide (CCH) ¶ 15,020 (Okla. Civ. App. Feb. 7, 2013). The case involved an Oklahoma dealer that closed its business only seven months after Ford approved its purchase of the dealership. During the seven months of operation, the dealer’s employees executed bogus checks and failed to deliver vehicles, title certificates, or to pay balances on trade-in vehicles. The ...

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A California state appellate court upheld a finding that a franchisor was vicariously liable for its franchisees’ illegal advertising, determining that the franchisor had extensive controls over the advertising beyond that necessary to protect the franchisor’s trademarks and goodwill. In The People v. JTH Tax, Inc., 2013 Cal. App. LEXIS 37 (Cal. Ct. App. Jan. 17, 2013), the California Attorney General filed a complaint against Liberty Tax Service for several violations of consumer protection laws, including false advertising in relation to its refund-anticipation loans ...

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In Ford v. Palmden Restaurants, LLC, Bus. Franchise Guide ¶ 14,877 (Cal. Ct. App. July 31, 2012), a California Court of Appeal held that the plaintiff had raised a triable issue of fact as to whether Denny’s and several of its affiliated corporate entities could be held jointly liable for the injuries he sustained at a franchised restaurant. The plaintiff brought a negligence action against the franchisee and the Denny’s entities after being attacked by members of a street gang who were known to frequent the premises. The lower court granted summary judgment in favor of Denny’s ...

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Taco Bell Corp. has won an important ruling in a California federal district court against class action claims involving unauthorized text messages. In Thomas v. Taco Bell Corp., 2012 U.S. Dist. LEXIS 107097 (C.D. Cal. June 25, 2012), the court granted summary judgment dismissing the claims against the franchisor, despite its role in the franchisee advertising association that had approved the text messaging component of the promotion. The texting was alleged to violate a federal statute prohibiting certain unauthorized communications.

In granting summary judgment, the ...

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In McDonald’s Restaurants of Florida, Inc. v. Doe, 2012 Fla. App. LEXIS 3807 (Mar. 9, 2012), a Florida court of appeals overturned a trial court ruling that had required McDonald’s to produce its training and operations manuals in discovery relating to a vicarious liability claim. The plaintiff had argued that the manuals were necessary to show that McDonald’s had control over the franchised restaurant where an assault had taken place. The trial court, while recognizing that the manuals contained trade secrets, ordered their production pursuant to a confidentiality ...

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A federal court in New York has granted a franchisor’s motion to dismiss a count of unjust enrichment by a construction company hired by a franchisee. Vertex Construction Corp. v. T.F.J. Fitness, L.L.C., 2011 U.S. Dist. LEXIS 135453 (E.D.N.Y. Nov. 23, 2011). The defendant, Retrofitness, is the franchisor of fitness facilities. The co-defendant franchisee entered a construction contract with the plaintiff for a “build-out” of its facility. Retrofitness was not a party to the construction contract. The construction company alleged that it was underpaid for its services by ...

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In Ammirato v. Duraclean Int’l., Inc., 2011 U.S. Dist. LEXIS 75305 (E.D.N.Y. July 13, 2011), the United States District Court for the Eastern District of New York held that a franchisor was not vicariously liable for a franchisee’s default on loans. A Duraclean franchisee (not a party to this case) obtained a series of loans from plaintiffs to finance cleaning projects by the Duraclean “National Team,” a marketing program whereby the franchisee would obtain large national accounts. When the franchisee failed to repay the loans, plaintiffs sued Duraclean International ...

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In Solis v. McDonald’s Corp., 2011 N.Y. Misc. LEXIS 3366 (N.Y. Sup. Ct. July 11, 2011), a New York state court denied McDonald’s summary judgment on a vicarious liability claim, concluding that there was a question of fact regarding whether the franchisor exercised sufficient control over its franchisee’s day-to-day operations to be held liable for the franchisee’s negligent acts. The case arose out of injuries suffered by the plaintiff when he fell on a staircase inside a McDonald’s restaurant entrance. The plaintiff sued the franchisee and McDonald’s, seeking ...

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In Hayes v. Jani-King of Jackson, 2011 U.S. Dist. LEXIS 66736 (S.D. Miss. June 22, 2011), a Mississippi federal district court denied a franchisor’s motion for summary judgment on a vicarious liability claim, concluding that under Mississippi law there was a question of fact regarding whether a janitorial cleaning service franchisor exercised sufficient control over its franchisee to be held liable for the franchisee’s negligent acts. The case arose out of an injury to the plaintiff who, after entering a restroom recently cleaned by the franchisee, slipped on the wet ...

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In Bricker v. R & A Pizza, Inc., 2011 U.S. Dist. LEXIS 39017 (S.D. Ohio Apr. 8, 2011), an Ohio federal district court granted a motion by franchisor Domino’s Pizza to dismiss the claims of its franchisee’s former employee. The court held that the former employee’s complaint failed to state plausible claims against the franchisor under Title VII and  for sexual harassment, retaliation, and negligence under state law. Each of those claims requires that there be an employer/employee or agency relationship between the worker and the franchisor, and the court found no allegations to ...

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In Braucher v. Swagat Group, LLC, 2010 U.S. Dist. LEXIS 26294 (C.D. Ill. Mar. 19, 2010), the court granted summary judgment to Choice Hotels on a claim brought by a guest of one of its franchised hotels.  The plaintiffs had visited a franchised hotel at which they contracted Legionnaires disease from the pool, which proved fatal to one of the named plaintiffs.  The plaintiffs brought suit against both the franchisee and the franchisor, claiming that the franchisor was negligent and was liable under the doctrine of res ipsa loquitur, and that the franchisee acted as the franchisor’s ...

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The parent companies of a hotel chain prevailed against personal injury claims brought in Reider v. Radisson Hotels Int’l et al., No. 3:08-cv-02328 (S.D. Cal. March 8, 2010). The case arose out of serious injuries suffered by the plaintiffs when they fell through a glass door in a sports bar located within a Radisson hotel in Japan. The hotel was operated under a management agreement between the hotel owner and a subsidiary of the defendants based in Singapore. The plaintiffs failed to name the subsidiary as a defendant, bringing suit instead against the two parent companies in the ...

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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 ...

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The United States District Court for the Eastern District of Louisiana recently issued an opinion in Matthews v. International House of Pancakes, Inc., 2009 WL 211788 (E.D. La. Jan. 23, 2009), that serves as a reminder that franchisors should take care not to establish or control their franchisees’ day-to-day employment policies, practices, or decisions. Two plaintiffs sued various International House of Pancakes franchisor entities, claiming racial discrimination, gender discrimination, and/or sexual harassment by a manager of a restaurant owned by an IHOP franchisee ...

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In Allen v. Choice Hotels Intern., Inc., 2008 WL 1925110 (4th Cir. May 1, 2008), the United States District Court for the District of South Carolina had granted summary judgment in favor of defendant franchisor on a negligence claim asserting both direct and vicarious liability in a case involving a deadly fire at a Comfort Inn and Suites facility. The fire killed six hotel guests and injured twelve others. The plaintiffs filed suit against franchisor, alleging that Choice failed to exercise due care by not requiring the franchisee to retrofit the hotel with sprinklers. The district ...

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In Youngblood v. Higbee, 2007 WL 427765 (Idaho Feb. 19, 2008), the trial court had granted summary judgment in favor of the defendant franchisor on a negligence claim based on a franchised repair shop’s alleged service of the plaintiff’s vehicle brake system prior to an automobile accident. The plaintiff claimed that the franchisor failed to exercise due care when repairing the brake system, which caused the plaintiff’s injury. On appeal, the Idaho Supreme Court affirmed the summary judgment to the franchisor.

The high court noted that it could not sustain the plaintiff’s ...

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A recent federal court decision illustrates the judiciary’s occasional reluctance to take judicial notice of the nature of the franchise relationship.  In Patterson v. Denny’s Corp., 2008 WL 250552 (W.D. Pa. Jan. 30, 2008), the plaintiff filed a complaint against Denny’s and its franchisee alleging a violation of the Fair and Accurate Credit Transactions Act (“FACTA”). Specifically, the plaintiff alleged that a franchised Denny’s location provided him with a credit card receipt that showed the last four digits and the expiration date of his Visa card, an alleged ...

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In a case of first impression in Kentucky, the state’s Supreme Court turned away from using a mixed bag of respondeat superior and ostensible agency principles and, taking a more precise approach given the ubiquity of the franchise method of doing business, adopted the emerging majority rule on the issue of franchisor vicarious liability. In Papa John’s Int’l, Inc. v. McCoy, 2008 WL 199716 (Ken. Jan. 24, 2008), the state supreme court reversed an earlier court of appeals decision and adopted what it considered the “emerging judicial consensus” by applying a franchisor ...

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In Schreyer v. Bandag, Inc., No. 05-CV-1235 (D. Minn. Dec. 5, 2007), the employee, Schreyer, was injured while working for the franchisee, Tire Associates, when a tire being retreaded on a piece of equipment exploded because the equipment was not functioning properly. Schreyer, prevented by Minnesota worker’s compensation law from suing the franchisee-employer, brought a claim of negligence against Bandag, the franchisor. Bandag, in turn, brought a third-party complaint for contribution or indemnity against franchisee Tire Associates, the employer. The federal district ...

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In Loyle v. Hertz Corp., 2007 WL 4555201 (Pa. Super. Ct. Dec. 28, 2007), the plaintiffs rented a vehicle from a Hertz facility located at the international airport in Toronto, Canada after making the reservation by telephone in the United States. Shortly after the plaintiffs returned the vehicle to the Toronto airport, they were detained by police officers for four hours and subjected to a strip and cavity search after Hertz personnel found a loaded handgun in the vehicle. Plaintiffs asserted that the gun did not belong to them and contended that it most likely had been left in the rental ...

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The Franchise Memorandum is a collection of postings on summaries of recent legal developments of interest to franchisors brought to you by Lathrop GPM LLP. 

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