Reference no: EM131473429

Question: Dana Hoffnagle was an employee at a McDonald's restaurant owned by a franchisee, Rapid-Mac, Inc. At 10:00 one evening, two men entered the restaurant, grabbed Hoffnagle, and took her out to the parking lot where they attempted to force her into their car. Tammy Geiger, a managerial employee, came to Hoffnagle's assistance and helped her escape from the men and return to the restaurant. Geiger noticed the two men driving their car around the parking lot, but did not lock the doors or telephone the police. Later, one of the men reentered the restaurant and again attempted to force Hoffnagle outside. Geiger intervened again, and the men left the restaurant premises. Geiger then telephoned the police department. Hoffnagle filed for workers' compensation benefits from her employer, Rapid-Mac, which she received. She then filed suit against McDonald's Corp., which was Rapid-Mac's franchisor, arguing that McDonald's Corp. had the ability to control the operations of the franchisee and was liable for negligence for failing to exercise such control. The contractual agreements between McDonald's and Rapid-Mac required the franchisee to adhere to the franchisor's standards and policies "for providing for the uniform operation of all McDonald's restaurants within the McDonald's system including, but not limited to, serving only designated food and beverage products, the use of only prescribed equipment and building layout and designs, strict adherence to designated food and beverage specifications and to prescribed standards of quality, service and cleanliness in [the] restaurant operation."

The agreements also required Rapid-Mac to adopt and use business manuals prepared by McDonald's and for McDonald's to make training available at "Hamburger University" for the franchisee and its managerial employees. McDonald's had the right to inspect the restaurant at all reasonable times to ensure compliance with the standards and policies and had the right to terminate the franchisee if the standards and policies were not met. Hoffnagle argued that these agreements gave McDonald's the right to control the restaurant and property upon which she was assaulted and that McDonald's was liable for negligence in failing to exercise that control, particularly in failing to provide adequate security or in failing to direct the franchisee to provide adequate security. Specifically, she argued that the franchisee's managerial employee, Geiger, was not appropriately trained because she failed to lock the doors or telephone the police after the first assault. Should McDonald's, as the franchisor, be liable for Hoffnagle's injuries? What factors would you consider in making this determination?