What Happens When a Franchisee Commits a Crime?

franchisee crime

The headline reads: ‘Domino's scandal: franchisee selling visas’ Pursuant to the undercover investigation, the Domino’s Franchisee is alleged to have offered work visas in exchange for money.

Not good. Domino’s public reputation and goodwill can be harmed by such a claim. Not only will it affect the franchisee’s business, it can affect other franchisees’ businesses and the brand. What should one do? The first instinct is to terminate the franchise; go public and denounce the franchisee. However, such knee-jerk reaction can be the wrong move.

Yes, it is bad. Even a false or unverified allegation can affect the brand and other franchisees. Franchise Agreements commonly, as a matter of course, have a provision that allows for termination in event of a criminal act. This, however, should not give rise to deductive logic and issuance of a termination.   Without the benefit of a criminal conviction, admission, or entry of no contest, there is no substantiation for termination. Many franchisee advocates and perhaps some applicable state relationship laws may show substantiation and even connectedness between the crime and performance and obligations of the franchisee, or harm to the goodwill and reputation of the franchise.

Domino’s, in response to the allegations, has launched an investigation, a prudent measure. In addition, Domino’s will want to get in front of the public news story. Again, caution is called for. Saying the wrong thing can lead to defamation or slander claims and on the flip side public outcry.

DON'T GET LEFT BEHIND. STAY INFORMED ON NEW LAWS AND REGULATIONS THAT WILL IMPACT YOUR BUSINESS.

bigstock-Computer-Mouse-Click-3204849At Gettins' Law we are always developing useful information and tools on our Blawg.   You can get the Gettins Blawg Newsletter sent directly to you each month.  Just click and complete the form.

Leave a Reply

Your email address will not be published. Required fields are marked *

Post Navigation