Franchisors protecting their brand need to walk a fine line. Too little control and the branding message becomes blurred. Too much control and the franchisor can be held vicariously liable for acts and omissions of the franchisee. Franchisors need to control their trademarks, but should they be responsible for every aspect of the franchisee’s operation?
No bright-line rule seems to exist across jurisdictions, or even within a single jurisdiction. The main factor seems to be the franchisor’s control over operations, but even this test varies with the nature of the claim. Ultimately, the courts look at the facts and circumstances to determine whether the franchisor was in a position to prevent the harm and whether it is appropriate to impose liability on the franchisor.
