Recent Cases — March 2012
Franchisees Deemed “Independent Contractors” A California court held that two janitorial services franchisees were independent contractors, not employees of the franchisor, and thus were not entitled to workers’ wages and job benefits. In California, an employment relationship will be deemed to exist where the person to whom the services are being rendered exercises sufficient control over the management and means of accomplishing the desired result. According to the court, in a franchise context, the burden is on the franchisee to show that the franchisor exercised control beyond what is necessary to protect and maintain its interest in its trademark, trade… Read more
Policy and Legislative Updates
Legislation Proposes Sweeping Changes to California Franchise Law Legislation introduced to the California State Assembly on February 24, 2012 would provide strong protection to franchisees by significantly amending California’s existing Franchise Relations Act. Among other changes, the “Level Playing Field for Small Businesses Act” would: provide franchisees with 60 days to settle overdue fees; absent “substantial and material” breach by the franchisee, provide for the automatic renewal of franchise agreements under, at the franchisee’s election, either the original terms of the agreement or the franchise terms then being offered to new franchisees; provide a 60-day cure period for breaching franchisees;… Read more