FRANCHISEE DISCONTENT CAN ALSO MORPH INTO LITIGATION. FRANCHISEES CAN SUE FRANCHISORS FOR A VARIETY OF REASONS, SUCH AS NON-DISCLOSED OPERATING COSTS AND FOR OPENING TOO MANY FRANCHISES IN A GEOGRAPHIC AREA
THREE SIGNS A FRANCHISOR NEEDS TO CONSULT A FRANCHISE LAWYER
By Harold Kestenbaum
Franchisor liability is often based on agency relationships, and vicarious liability is a form of liability without fault. This means that a person injured at a franchise location can file an action against the franchisor as well as the franchisee. For example, A Wisconsin Arby’s franchisee hired a work release inmate who walked off the job and shot his ex-girlfriend and her fiancé at a Wal-Mart. The women lived, but her fiancé was killed. The franchisor and franchisee were sued for negligence in hiring and supervising its employed work release inmate.
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