On the Franchisee’s Liability for Damage Caused by Franchising Activities to Third Parties-A Judicial Perspective

In determining the tort form between the franchisor and the franchisee, the franchisor’s control over the franchisee is the key. Where the franchisor manages the franchisee to protect its brand, there is no obligation to control the licensee to prevent it from infringing on third parties, whereas the obligation to control exists when the franchisor has control over the day-to-day operations of the franchisee beyond what is necessary to protect the brand. When the franchisor fails to fulfill the obligation of control and the franchisee commits a tort, it constitutes a concurrence tort. The franchisee is liable for the tort, with the franchisor assuming supplementary liability. When the franchisor is directly involved in the day-to-day operation of the franchisee, the tort form is a joint tort based on a concerted act of intent instead of a concurrence tort, for which they are jointly and severally liable. When the franchisor and the franchisee breach the obligation to control the property, they are jointly and severally liable for the joint tort of breaching a common obligation through common fault. In addition, the franchisor and the franchisee to use the same logo is the business model, and the franchisor should not be held liable for the ats of the franchisee in tort.