Opinion ID: 1426890
Heading Depth: 1
Heading Rank: 4

Heading: Franchisor

Text: Plaintiffs allege a factual question remains concerning the amount of control Burger King retained over the internal operations of the franchised restaurant which prevented summary judgment. Plaintiffs assert Burger King retained the right to control and supervise the franchised restaurant and, thus, owed a duty to exercise reasonable care in so doing. Under this theory, the extent of control is the critical inquiry. Plaintiffs established that Burger King extended franchise rights to Hatter in 1991. Burger King's relationship with Hatter is one of franchisor/franchisee and is governed by franchise and lease agreements. The franchise agreement expressly states that a franchisee is an independent contractor and no fiduciary relationship between the parties exists. Despite this, the franchise agreement details certain standards which are established by Burger King for the operation of a restaurant by a franchisee. Many of the procedures and standards for operation and management of a restaurant are stated in Burger King's manual of operating data. These are guidelines for the operation of all Burger King restaurants. Under the franchise contract, the franchisee must adhere to the guidelines or risk termination of the contract. The trial court granted Burger King's summary judgment motion finding, as a matter of law, that as a franchisor Burger King owed no duty of care to the employees. In order to establish actionable negligence, a plaintiff must establish: (1) the existence of a duty owed to the complaining party; (2) a breach of the duty; (3) resulting injury; and (4) that the breach was the proximate cause of the injury. Hansen v. Friend, 118 Wash.2d 476, 479, 824 P.2d 483 (1992). Since a negligence action will not lie if a defendant owed a plaintiff no duty of care, the primary question is whether a duty of care existed. Hansen, 118 Wash.2d at 479, 824 P.2d 483. The existence of a duty is a question of law. Pedroza v. Bryant, 101 Wash.2d 226, 228, 677 P.2d 166 (1984). We have not addressed the issue of whether a duty of care is owed by a franchisor to the employee of a franchisee. Other jurisdictions that have examined this question have generally concluded no duty of care exists. In Hoffnagle v. McDonald's Corp., 522 N.W.2d 808 (Iowa 1994), the Supreme Court of Iowa was presented with the question of whether a franchisor may be held liable for injuries suffered by the employee of its franchisee as a result of an assault by a third party. Hoffnagle, 522 N.W.2d at 809-10. The Iowa court determined the appropriate inquiry examined the degree of the franchisor's retained control over the property and the daily operation of the restaurant. Hoffnagle, 522 N.W.2d at 813. The court compared the franchisor/franchisee relationship with the employer/independent contractor relationship and applied established independent contractor law to the franchisor case. Hoffnagle, 522 N.W.2d at 813. The Hoffnagle court held where the franchisee has the power to control the day-to-day operations, and where the franchisee owns the business equipment, operates the business, holds the operating licenses and permits, determines the wages, provides for the basic training and insurance for the franchisee's employees, and hires, fires, supervises, and disciplines the employees, no duty is created. Hoffnagle, 522 N.W.2d at 814. The court found that where McDonald's simply had the authority to require the franchisee to adhere to the McDonald's system and did not control the daily operations, the franchisee was independent. Hoffnagle, 522 N.W.2d at 814. We agree with and adopt this approach. This approach is applied in other jurisdictions confronted with similar factual situations. See Coty v. United States Slicing Mach. Co., 58 Ill.App.3d 237, 242, 15 Ill.Dec. 687, 373 N.E.2d 1371 (1978) (franchisor not liable to franchisee employees' work related injuries because franchisor's general right to rescind the contract was insufficient retained control); Barnes v. Wendy's Int'l, Inc., 857 S.W.2d 728, 730 (Tex.Ct.App.1993) (franchisor's right-of-reservation to reenter premises did not give rise to a duty of care to franchisee's employee); Little v. Howard Johnson Co., 183 Mich.App. 675, 682, 455 N.W.2d 390 (1990) (despite franchisor's right to conduct inspections and to hold franchisee in breach of contract, franchisor did not possess sufficient control over daily operations to be held liable); Hayman v. Ramada Inn, Inc., 86 N.C.App. 274, 357 S.E.2d 394 (1987) (franchisor who retained ability to require franchisee to comply with standards, but not to hire and fire employees, did not control day-to-day operations of motel and was not liable for injury to guest resulting from third party assault). Compare Martin v. McDonald's Corp., 213 Ill.App.3d 487, 157 Ill.Dec. 609, 572 N.E.2d 1073 (1991) (franchisor who voluntarily undertook responsibility to provide security assumed a duty to provide security and protect against criminal acts of third party even though no such duty was otherwise imposed by law). In this case, plaintiffs have not established that Burger King retained sufficient control to expose it to liability. In order to retain sufficient control, a franchisor must retain the ability to make decisions concerning the daily operation of the franchised restaurant. The franchise agreement between Burger King and franchisee expressly states that a franchisee is an independent contractor and that Burger King has no control over the terms and conditions of the franchisee's employees. Further, plaintiffs have not shown Burger King retained control over the security of the franchise restaurant. Burger King's authority over the franchise was limited to enforcing and maintaining the uniformity of the Burger King system. We hold, in this case, that plaintiffs have not established or presented facts supporting the theory that the franchisor Burger King owed any duty of care to the employees of the franchisee.