Franchisors Not Liable for Negligent Franchisees

The employee of a franchsee wrestles with a customer over a hot coffee pot.  The coffee spills on the customer burning him.  Is the franchisor liable (the franchisee obviously is liable)?  No, not in New York.  The franchisee is obviously liable, but not the franchisor.
7-Eleven argued in court that there is no evidence of negligence on its part and that the existence of a franchisee/franchisor relationship is insufficient to impose vicarious liability on 7-Eleven for the acts of an individual employed by an independent franchisee.

In Nickola v. 7-Eleven, 03-13494, Doyle explained that in determining whether a franchisor may be held vicariously liable for the acts of its franchisee, the most important factor to consider is the degree of control the franchisor maintains over the daily operations of the franchisee.

Here, the judge found, 7-Eleven exercised no control over the activities that led to Nickola’s injury. “Thus, in the absence of a principal/agent relationship, or proof that the franchisor exercised a high degree of control over the franchisee, there is no basis for holding the franchisor responsible for the franchisee’s misconduct,” Doyle said.

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