After losing a trial on franchise liability, Chicken Kitchen USA has agreed to pay $2 million to settle an auto accident suit involving a franchisee delivery driver. The case highlights the franchiser dilemma: exercise strong franchisee control for quality control, but at the risk of increased liability exposure, or accept less control in exchange for less legal exposure. Plaintiffs attorney Ervin Gonzalez noted in an interview that the chain president testified to having "police powers" over franchises.
February 14, 2007 at 12:00 AM
1 minute read
The original version of this story was published on Law.Com
After losing a trial on the issue of franchise liability, a fast-food chain has agreed to pay $2 million to settle an auto accident lawsuit involving a delivery driver for one of its franchisees.
The case highlights the dilemma for franchisers of whether to exercise strong control over franchisees to maintain quality at the risk of increasing liability exposure or accept less control in exchange for less legal exposure.
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