In 1993, Airborne Freight Corp. (Airborne), a package delivery service, and East Wind Express, Inc. (East Wind) entered into a contract under which East Wind agreed to provide services to Airborne, such as pickup, transport, and delivery of shipments between Airborne’s customers and facilities in northern Oregon. Customers would call Airborne and ask to have a package delivered to another area. Airborne would radio an East Wind driver, who would then pick up the customer’s package. Airborne billed the customer and assumed all liability for the package from the time of arrival at its pickup to the package’s final destination. Under the contract, Airborne paid East Wind based on the average number of packages carried per day, and East Wind was “not entitled to receive any portion of any charges made by Airborne to its shippers.” The contract also stated that East Wind’s use of Airborne’s trademarks on its uniforms and a truck was an advertising service and was to be compensated according to advertising fees. Airborne specified the standards that applied to the use of its trademarks by East Wind.
Eventually, the relationship between the two companies disintegrated, and Airborne terminated the contract. East Wind brought this action against Airborne, asserting that at-will terminations violated the Washington Franchise Investment Protection Act. Airborne argued that East Wind was an independent contractor, who could be terminated at will, and not a franchisee. What are the requirements for a franchise relationship? Under these standards, is Airborne a franchisee or an independent contractor?