Question
11. Martinez was injured when he was struck by a bicycle being ridden by Pardo. At the time of the accident, Pardo was making deliveries
11. Martinez was injured when he was struck by a bicycle being ridden by Pardo. At the time of the accident, Pardo was making deliveries for his employer, Higher Powered Pizza, which was a franchisee of Papa Johns International, Inc. Martinez sued Papa Johns, arguing that it was vicariously liable for the acts of its franchisee. The franchisee agreement between Higher Powered Pizza and Papa Johns stated that the franchisee shall have full responsibility for the conduct and terms of employment for [its] employees and the day-to-day operation of [its] business; the only control the agreement reserved to Papa Johns involved enforcement of standards in areas such as food quality and preparation, hours of operation, menu items, employee uniform guidelines, and packaging requirements. This included the right to perform inspections (limited to review of sales and order forms), audits to ensure compliance with company standards, and observation of interaction with customers. Should Papa Johns be held liable for the injuries caused to Pardo?
12. Defendant manufactures a line of upscale sodas marketed under the name Stewarts. Plaintiffs are several beverage distributors who distributed Defendants sodas in Minnesota. Plaintiffs were distributors of beer before Defendant approached them. Thus, Plaintiffs already owned the facilities (e.g., warehouses and refrigerators) and equipment (e.g., trucks and handcarts), and already employed the personnel (e.g., drivers, warehouse workers, and bookkeepers) necessary for the distribution of beverages at the time they began distributing Stewarts Sodas. After several years of using Plaintiffs as its distributors, Defendant decided to distribute its products directly, and terminated Plaintiffs distribution Agreements. The Minnesota Franchise Act (MFA) protects franchisees from being terminated without good cause by franchisors. Defendant argues that it did not need good cause to terminate the Plaintiffs, however, because it was not a franchisor and Plaintiffs were not franchisees within the meaning of the MFA. Plaintiffs argued that they were franchisees under the business opportunity provision of the MFA, which defines a franchise as: the sale or lease of any products to the purchaser for the purpose of enabling the purchaser to start a business and in which the seller: (iii) guarantees that the purchaser will derive income from the business which exceeds the price paid to the seller. How should the court rule on the Plaintiffs claim? What policy considerations support that outcome?
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