In other contexts, I have written about the relationship between franchisors and franchisees, which in some respects is similar to the way gig drivers work “with” (not “for”) Uber, Lyft, and the like. In many cases, the products that are advertised by a particular company are not made by that company, but by a franchisee of that company who is entirely separate from the parent company, but who is responsible for doing things the way the parent company wants them done. If you’re a franchisee, you CAN’T…um…”have it your way.”
Speaking of which, here is an example of an article that confuses franchisor and franchisee. The Buzzfeed article, in typical Buzzfeed style, is entitled “This Is What Happened After A Bunch Of Employees At A Burger King Quit.” (Because of malfunctioning air conditioning, a number of employees put in their two weeks’ notice, leaving a “We All Quit” sign as they left.) You have to read ANOTHER article (from NBC) to find this little statement:
“Our franchisee is looking into this situation to ensure this doesn’t happen in the future,” a Burger King spokesperson said.
Yes, the employees’…um…beef wasn’t with Burger King itself (or its Brazilian/Canadian/American parent Restaurant Brands International), but with whoever manages the local franchise.
Well, now this world of franchisors and franchisees has entered the biometric world, according to a post in Greensfelder, a self-described “franchising & distribution law blog.”
Plaintiffs are suing both franchisors and franchisees. Franchisors are being sued for collecting the information themselves for their own employees and also for the actions of their franchisees on theories of joint and several liability, vicarious liability, agency and alter ego. A recently filed case alleges that a franchisor mandates and controls virtually every aspect of its franchise locations, including the use of certain equipment that collects biometric information to track employees’ time and attendance and to monitor cash register systems for fraud.
This benefits the lawyers, who get to collect double the damages by claiming that both the franchisor and the franchisee are separately liable.
Greensfelder’s takeaway for franchisors:
Franchisors should be careful about mandating franchisee use of biometric procedures and devices without first checking applicable law and also making sure that their own policies and procedures are in compliance with those laws.
I’m not sure who is providing takeaways for franchisees.
Other than the usual advice to read the franchise agreement very, very carefully.