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A franchisor may be held vicariously liable for the tortious conduct of its franchisee only if the franchisor has control or a right of control over the daily operation of the specific aspect of the franchisee's business that is alleged to have caused the harm.
Appellee customer claimed that after he paid for a pizza delivery, the employee made false statements to the police, resulting in certain charges against the customer. The charges were eventually dropped, and the appellee customer sued appellants, franchisor and franchisee, for malicious prosecution and defamation. The trial court granted summary judgment to appellants on both claims. The appellate court reversed. Appellants challenged the decision.
Under the circumstances, could the appellants be held liable for the tortious conduct of the employee?
Reversing the appellate court's decision, the court concluded that the franchisee could not be held vicariously liable for the statements that the employee made to the police as the acts complained of occurred within an independent course of conduct that could not have been intended by the employee to serve any purpose of the franchisee. The franchisor could not be held liable because it had no control over the employee's intentional, tortious conduct.