This article in the MetroWest Daily News reports that a former Shell franchisee from Framingham, Massachusetts is suing his franchisor for wrongful termination. This is not a particularly novel story and other posts on this blog have reported on similar disputes between Shell and its franchisees or former franchisees. The thing I found most disturbing and noteworthy about this article (which ostensibly appeared in a published news periodical) is that it treats the relationship between a franchisor and franchisee as an employment relationship. The author states that the plaintiff, Mr. Sutthill, was "unceremoniously fired from his business." I honestly don't know what this means but I know it's not good for franchising.
At first, I thought it may have been an editing issue because the article recognizes that Mr. Sutthill signed a franchise agreement with Motiva, a Shell subsidiary. Unfortunately, in the very next sentence, the author refers to Motiva as the franchisee's boss and later states that Motiva "hired" a new company to run the business. He even explains that the Petroleum Marketing Practices Act requires 90 days notice "before a franchisee can be fired."
When I quickly reviewed the complaint, the relationship between the parties appeared to be fairly typical. There was a lease component to the arrangement but nothing to suggest any kind of hybrid employment relationship. The complaint itself does not discuss or even suggest that an employment relationship exists. A copy of the complaint can be accessed here: Shell Complaint.
More than telling the Shell franchisee's tale of wrongful termination, this article highlights to every franchise law practitioner that there's still a lot of work to do to educate the public about franchise relationships. In a vicarious liability case, it's hard to feel confident that the plaintiff understands the distinctions between a franchisor and an employer when some members of the educated media still get it wrong.
Posted by franchiselawblog at October 4, 2004 06:59 PM