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Expert Analysis

Vicarious Liability — The Franchisor's Quandary

Law360, New York (September 13, 2012, 2:04 PM EDT) -- One of the three definitional elements of a franchise under the Federal Trade Commission rule and many state statutes is that the franchisor exerts (or has authority to exert) a significant degree of control over the franchisee's method of operation or provides significant assistance with respect to the franchisee's method of operation. The touchstone of vicarious liability is likewise control, leaving franchisors struggling with how to minimize the risk of being held liable for the conduct of their franchisees, while still protecting their brands and attendant goodwill....

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