A Rush to (Summary) Judgment in Franchisor Liability Cases

Abstract

Legal and factual issues regarding franchisor liability pose challenges for the legal community. This is an article about courts striving to fashion the law of franchisor liability for franchisee torts, an area of the law with serious and unsettled issues. It discusses how courts seek guidance from respondeat superior and apparent agency doctrines in determining the principles of franchisor vicarious liability. Much of the discussion is based on case law and Restatement (Third) of Agency. Estoppel and direct liability principles are also considered. This article examines a number of cases that illustrate questionable factual determinations in granting summary judgments favorable to franchisors, thereby denying trials to injured parties. It also reviews some cases illustrating better approaches to factual determinations. Since summary judgments should be granted only in the absence of material facts at issue, erroneous fact-finding seriously undermines the judicial process.The formulation of the law of franchisor liability is especially important because of its potential to encourage franchisors to promote better health and safety practices to benefit franchisee patrons and the general public.