Our team, combining Dispute Resolution and Franchise expertise and led by Jiri Jaeger and Jie Zhang, recently argued and won a case defending KFC from vicarious liability in the first instance. The district court Leverkusen decided that KFC as a franchisor cannot be made responsible by the plaintiff for actions or omissions by the franchisee or employees of the franchisee. KFC as franchisor cannot be regarded as the responsible legal and operational entity in the given case as it had no factual and legal responsibility and no influence either over the franchisee's operations.
In the given case, the plaintiff sought damages from KFC following an accident on the franchisee’s restaurant premises. Our team managed to clearly explain to the court the allocation of risks and responsibilities within the given franchise model. The question of responsibility and liability in franchise systems is always a sensitive matter as it presents an opportunity for franchisees, their employees, and customers alike to involve the franchisor and redistribute some of the liability. In this case, the court understood the relationship between franchisor and independent contractor (franchisee). As a result, the court has denied both the claimant's damage claim and the punitive damage claim.
