The Franchise Memorandum

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, Johnson moved to amend the complaint, seeking to add the Thai franchisee, and assert apparent agency and alter ego theories of liability against Marriott. Marriott argued that Johnson’s proposed amendments would be futile.

The district court disagreed with Marriott. Noting that leave to amend should be “freely given when justice so requires,” the court allowed Johnson to amend her complaint. Marriott argued that the franchisee should not be added because the court lacked jurisdiction over the franchisee. However, the court refused “at this early stage of litigation” to reject Johnson’s theory that Marriott and its franchisee were alter egos of each other (considering the franchisee’s use of Marriott’s name, reputation, and reservation system), which would allow facts establishing jurisdiction over Marriott to be imputed to the franchisee. Regarding Johnson’s apparent agency theory, the court found that Marriott’s mere denial of an agency relationship alone was insufficient to fulfill Marriott’s burden to show that Johnson’s proposed amendment was futile. Since it granted Johnson’s motion for leave to amend, the court denied Marriott’s motion to dismiss as moot.