Vicarious Liability

Generally, when deciding whether to impose vicarious liability against a franchisor for acts of its franchisee's employees, courts measure the franchisor's control of franchisee operations. For instance, in the “hot coffee” lawsuit, the franchisor (the McDonald's corporation) was liable because it was the corporation ' not the specific franchise ' that mandated that coffee was to be served served at 180 to 190 degrees Fahrenheit. But franchisor control is not always so clear and straightforward.

It is essential that franchisors know, or at least can predict to some extent, in what circumstances they may be held vicariously liable for the acts of their franchisees and their franchisees' employees. Certainly, if preventive measures can be used to avoid such liability, these precautions should be known and taken. It is also important for individuals injured by franchisee employees to know how to effectively join a franchisor in a lawsuit. Franchisors usually have a much greater capacity to compensate an injured party for tort damages and logically should be joined in most circumstances. For instance, emphasizing certain aspects of a franchisor-franchisee relationship may successfully support an injured party's claim to hold the franchisor vicariously liable. This article provides some general information and advice on how franchisors can protect against vicarious liability.