Justia Connect Webinars When Control Creates Risk: Vicarious Liability for Franchisors

CLE

Amy S. Malish Pugh Accardo

Marina J. Wilson Pugh Accardo

When Control Creates Risk Vicarious Liability for Franchisors

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Overview AI Webinar Summary

When Control Creates Risk: Vicarious Liability for Franchisors

This program explores the evolving landscape of vicarious liability in the franchise context, with a focus on how operational control can create risks for franchisors. Designed for practitioners looking to better understand the risks vicarious liability poses for franchisors, the program will cover the basics of vicarious liability in the franchise context, including theories of control, emerging areas of franchisor liability such as the TVPRA, and suggestions for mitigation risk to reduce exposure while protecting and maintaining brand integrity.

Topics covered include:

Business Law Personal Injury

Agenda:

What is Vicarious Liability?

What is Franchising?

Theories of Vicarious Liability Within Franchising

Right of Control
Instrumentality
Apparent Agency

Emerging Area – Trafficking Victims Protection Reauthorization Act (TVPRA)

Mitigation

Questions and Answers

Duration of this webinar: 60 minutes

Originally broadcast: June 22, 2026 8:00 AM PT

Webinar Highlights

This webinar is divided into section summaries, which you can scan for key points and then dive into the sections that interest you the most.

00:00 Vicarious Liability and Franchising

Vicarious liability involves one party being held responsible for another's actions due to their relationship. The theory of respondeat superior is a key aspect, holding employers liable for employees' actions under certain conditions. Agency law also plays a role, where a principal may be bound by an agent's actions. Franchising involves a licensing relationship where the franchisor provides the franchisee with brand use and operational support.

21:21 Franchise Control and Liability Cases

The discussion shifts to court cases examining franchisor liability based on control over franchisees. The Domino's Pizza case is highlighted, where the franchisor was held liable due to extensive control over franchisee operations. Courts assess whether franchisors exert control beyond brand maintenance, affecting liability decisions. Other cases, like Ortega and Nichols, also explore these issues, showing the ongoing legal challenges in franchising.

30:56 Instrumentality Test and Agency Theory

The instrumentality test requires franchisors to control the specific aspect of a franchisee's business causing harm for liability to be imposed. The Currier Newport Lodge case illustrates this, where the franchisor's lack of control over a lodge's bar operations negated liability. Courts require evidence of control over the harm-causing instrumentality, not just general operational standards. Apparent authority is another consideration, where third parties' perceptions of control influence liability. The Atos case highlights the complexities of apparent authority in franchising.

48:22 Emerging TVPRA Concerns for Franchisors

The Trafficking Victims Protection Reauthorization Act (TVPRA) poses new liability concerns for hotel franchisors. The TVPRA allows civil actions against those benefiting from sex trafficking. The Doe v. ESAP Portfolio case demonstrates challenges in proving franchisor liability under the TVPRA. Courts require evidence of franchisors' participation in trafficking ventures, not just room rentals or industry knowledge. The Hotel Rally case shows courts are open to vicarious liability claims if franchisors exert significant control over franchisee operations.

57:56 Mitigating Vicarious Liability Risks

Franchisors can mitigate vicarious liability risks by clearly defining franchisee independence in agreements and enforcing it in practice. Franchisors should focus on brand protection without controlling franchisee operations to avoid liability. Operations manuals should emphasize outcomes rather than detailed operational control to limit liability exposure. Strong indemnification provisions and appropriate insurance coverage can protect franchisors from liability claims.

Please note this AI-generated summary provides a general overview of the webinar but may not capture all details, nuances, or the exact words of the speaker. For complete accuracy, please refer to the original webinar recording.

Speakers

Amy S. Malish Special Partner
Pugh Accardo

Ms. Malish is a Special Partner at Pugh Accardo in New Orleans, Louisiana. She is licensed in both Louisiana and Texas. Read More ›

Marina J. Wilson Associate Attorney
Pugh Accardo

Marina Wilson is an Associate at Pugh Accardo. Her practice focuses on complex commercial litigation, intellectual property, and counseling franchise companies with business and compliance matters. Read More ›

Continuing Legal Education (CLE) Credits

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Alaska CLE

Status: Approved

Format: Live (Virtual), On-Demand

Credits: 1.00 General

Earn Credit Until: June 21, 2031

California CLE

Status: Approved

Format: On-Demand

Credits: 1.00 General

Earn Credit Until: June 30, 2028

Hawaii CLE

Status: Approved

Format: Live (Virtual), On-Demand

Credits: 1.00 General

Earn Credit Until: June 21, 2028

Illinois CLE

Status: Approved

Format: On-Demand

Credits: 1.00 General

Earn Credit Until: June 21, 2028

New Jersey CLE

Status: Approved

Format: Live (Virtual), On-Demand

Credits: 1.20 General

Earn Credit Until: April 22, 2027

North Carolina CLE

Status: Approved

Format: On-Demand

Credits: 1.00 General

Earn Credit Until: February 28, 2027

Ohio CLE

Status: Approved

Format: On-Demand

Credits: 1.00 General

Earn Credit Until: December 31, 2026

Pennsylvania CLE

Status: Approved

Format: On-Demand

Credits: 1.00 Substantive Law, Practice, and Procedure

Earn Credit Until: June 21, 2028

Texas CLE

Status: Approved

Format: On-Demand

Credits: 1.00 General

Earn Credit Until: May 31, 2027

Vermont CLE

Status: Approved

Format: Live (Virtual), On-Demand

Credits: 1.00 General

Earn Credit Until: June 22, 2031

West Virginia CLE

Status: Approved

Format: On-Demand

Credits: 1.20 General

Earn Credit Until: December 31, 2029

This presentation is approved for one hour of General CLE credit in Alaska, one hour of General CLE credit in California, one hour of General CLE credit in Hawaii, one hour of General CLE credit in Illinois, one hour of General CLE credit in North Carolina, one hour of General CLE credit in Ohio, one hour of Substantive Law, Practice, and Procedure CLE credit in Pennsylvania, one hour of General CLE credit in Vermont, and one hour of General CLE credit in West Virginia. This program has been approved by the Board on Continuing Legal Education of the Supreme Court of New Jersey for 1.20 hours of total CLE credit. This course has been approved for Minimum Continuing Legal Education credit by the State Bar of Texas Committee on MCLE in the amount of 1.00 credit hours.

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