Are Crown Gold Franchising and the Crown Gold Exchange franchisee joint employers?
Crown_Gold_Exchange Franchise · 2024 FDDAnswer from 2024 FDD Document
et forth in the Manual.
- (d) Qualifications. Crown Gold Franchising may set minimum qualifications for categories of employees employed by Franchisee.
- (e) Sole Responsibility. Franchisee is solely responsible for the terms and conditions of employment of all of its personnel, including recruiting, hiring, training, scheduling, supervising, compensation, and termination. Franchisee is solely responsible for all actions of its personnel. Franchisee and Crown Gold Franchising are not joint employers, and no employee of Franchisee will be an agent or employee of Crown Gold Franchising. Within seven days of Crown Gold Franchising's request, Franchisee and each of its employees will sign an acknowledgment form stating that Franchisee alone (and not Crown Gold Franchising) is the employee's sole employer. Franchisee will use its legal name on all documents with its employees and independent contractors, including, but not limited to, employment applications, time cards, pay checks, and employment and independent contractor agreements, and Franchisee will not use the Marks on any of these documents.
- 7.6 Post-Opening Training. Crown Gold Franchising may at any time require that the Principal Executive and/or any other employees complete training programs, in any format and in any location determined by Crown Gold Franchising. Crown Gold Franchising may charge a reasonable fee for any training programs. Crown Gold Franchising may require Franchisee to provide training programs to its employees. If a training program is held at a location which requires travel by the Principal Executive or any other employee, then Franchisee shall pay all travel, living and other expenses.
- 7.7 Software. Without limiting the generality of Section 7.1 or Section 8.1, Franchisee shall acquire and use all software and related systems required by Crown Gold Franchising.
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to the 2024 Crown Gold Exchange Franchise Disclosure Document, Crown Gold Franchising and its franchisees are not considered joint employers. The franchisee is explicitly responsible for all employment-related aspects of their personnel. This includes recruiting, hiring, training, scheduling, supervising, compensating, and terminating employees. The franchisee is also solely responsible for the actions of their personnel. To further clarify this relationship, Crown Gold Franchising requires franchisees and their employees to sign an acknowledgment form confirming that the franchisee is the employee's sole employer, not Crown Gold Franchising. Franchisees must also use their legal name on all employment-related documents, without using Crown Gold Exchange's trademarks on these documents.
Despite the clear distinction, Crown Gold Franchising retains some control over the franchisee's employees. Crown Gold Franchising may set minimum qualifications for categories of employees hired by the franchisee. Additionally, Crown Gold Franchising may require the Principal Executive and other employees to complete training programs, potentially charging a reasonable fee for these programs. If travel is required for training, the franchisee is responsible for all associated expenses. Franchisee shall cause its personnel to comply with any dress attire, uniform, personal appearance and hygiene standards set forth in the Manual.
This arrangement is fairly common in franchising, where the franchisor sets brand standards and provides training, but the franchisee manages the day-to-day employment responsibilities. However, the degree of control that Crown Gold Franchising exerts over employee qualifications and training could potentially blur the lines of the employer-employee relationship. A prospective franchisee should consult with a legal professional to fully understand the implications of these provisions and ensure compliance with all applicable labor laws.