Menu
Blog Banner Image

The Franchise Memorandum

Missouri Federal Court Grants Summary Judgment on Vicarious Liability Claims Against Franchisor

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). The child’s father alleged that the franchisor was liable for the franchisee’s negligence because the franchisee was the agent of the franchisor. The father also alleged that a discrepancy in the address in the franchise agreement showed that the agreement did not apply to the restaurant, and that it was in fact owned by the franchisor.

The court rejected this argument and held that the restaurant was in fact owned by the franchisee. It then held that the franchisor did not have sufficient day-to-day control over the franchisee to establish an agency relationship under Missouri law. The court concluded that, although the franchise agreement's disclaimer of an agency relationship between the franchisor and the franchisee was not dispositive, the franchisee's contractual obligation to comply with Hardee’s system standards was insufficient to establish an agency relationship. In particular, the court found that the franchisor lacked the right to hire, fire, or discipline restaurant employees or to determine their wages or working conditions. Moreover, although the Hardee’s operations manual required a preclosing safety check with respect to restaurant playgrounds, the provision was insufficient to establish the control necessary to find an agency relationship. Thus, the court determined that the father lacked sufficient evidence that the franchisor maintained the level of control over the restaurant necessary to establish vicarious liability, and granted the franchisor’s motion for summary judgment.

Email LinkedIn Twitter Facebook

The information contained in this post is provided to alert you to legal developments and should not be considered legal advice. It is not intended to and does not create an attorney-client relationship. Specific questions about how this information affects your particular situation should be addressed to one of the individuals listed. No representations or warranties are made with respect to this information, including, without limitation, as to its completeness, timeliness, or accuracy, and Lathrop GPM shall not be liable for any decision made in connection with the information. The choice of a lawyer is an important decision and should not be based solely on advertisements.

About this Publication

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. 

To subscribe to monthly emails for The Franchise Memorandum, please click here

Topics

Archives

2024

2023

2022

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

Blog Authors