Arizona Court: Franchisor Found Not Vicarious Liable

The U.S. District Court in Arizona recently adopted a commonly used franchise law concept used in many other states. The court granted summary judgment to Faegre Baker Daniels client Buffalo Wild Wings Inc., holding that the company was not liable for alleged sexual harassment of a franchisee's manager. The court's decision mirrors many similar cases from around the country, holding that a franchisor is vicariously liable only when it has direct control over the daily operations of the franchisee's business. The court found no evidence of such control by Buffalo Wild Wings.

In the October issue of Franchising World, FaegreBD attorneys Kerry Bundy and Justin Krypel authored an article explaining how this decision is an important extension of widely adopted U.S. franchise law to the state of Arizona, and provides a guide to franchisors on how to balance control over their franchisees with the need for brand consistency and system standards.