A key complication that arises in many personal injury suits, especially premises liability suits, is the existence of a franchise relationship. Although many consumers do not see the functional difference between a business that is directly run by the larger corporate entity and those that are run pursuant to a franchise agreement, the existence of a franchise relationship has significant implications for determining legal liability. In a recent premises liability case, Bright v. Sandstone Hospitality, LLC, the Georgia Court of Appeals addressed some of the commonplace liability limitations that are implicated when a franchise relationship exists.
The plaintiff in Bright was a guest at a Wingate Inn in August 2008. Although the inn carried Wingate’s name, the facility was actually owned and operated by Sandstone Hospitality, LLC and merely franchised by Wingate International Inns, Inc.. The plaintiff took a bath the morning after his arrival at the inn, and when he attempted to hoist himself from the tub with the aid of a grab bar, the bar detached from the wall and struck him in the head and injured his lower back. The resulting injuries required surgery, and the plaintiff brought suit against Wingate International Inns, Inc. and Sandstone Hospitality, LLC for recovery. Following some discovery, both defendants made separate motions for summary judgment, which the trial court granted in their favor. On appeal, the Georgia Court of Appeals reversed the grant of summary judgment with respect to Sandstone Hospitality but affirmed the grant of summary judgment with respect to Wingate. This division in judgment reflects the limitations that exist when one attempts to impose liability on a franchisor for injuries sustained at a site operated by a franchisee.
The plaintiff first argued that Wingate should be held liable because there was apparent agency relationship between Wingate (the principal) and Sandstone (the agent). In support of this argument, the plaintiff first relied on evidence of common signage at all Wingate sites, whether or not they are run by a franchisee. However, under Georgia law, merely displaying signs or trademarks symbols is insufficient to establish that an apparent agency relationship exists. While the plaintiff did cite one case that placed liability on a franchisor when common signage was used and the franchisee failed to provide notice it was independently owned and operated, the court distinguished that case from the one at hand because a sign at the front desk of this particular Wingate specifically noted that it was owned and operated by Sandstone Hospitality, LLC. Accordingly, as a matter of law, no apparent agency relationship could exist.
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