The Franchise Memorandum

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 complaint “if it fails to make a short and plain statement of a claim upon which relief may be granted.” In this case, the court found it was undisputed that the franchisor did not directly perform any work on the plaintiff’s brakes, but found no allegations in the complaint that the franchisee had acted as an agent of the franchisor. The court concluded that the failure to allege that the franchisor was responsible for the franchisee’s actions, coupled with the failure to properly name and describe the franchisor in the complaint, amounted to a failure to put the franchisor on notice of the claim brought against it under notice pleading standards. The court further held that the suit was brought “unreasonably or without foundation,” and awarded the franchisor its attorneys’ fees with the victory.