Are Desi District Franchise Group and the Desi District franchisee considered joint employers?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
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 Desi District Franchise Group are not joint employers, and no employee of Franchisee will be an agent or employee of Desi District Franchise Group.
Within seven days of Desi District Franchise Group's request, Franchisee and each of its employees will sign an acknowledgment form stating that Franchisee alone (and not Desi District Franchise Group) 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.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, the franchisee and Desi District Franchise Group are explicitly not considered joint employers. The FDD states that the franchisee is solely responsible for all employment-related matters, including hiring, training, compensation, and termination of their personnel. This means the franchisee has complete control over their employees and is liable for their actions.
To further emphasize this separation, Desi District may require the franchisee and their employees to sign an acknowledgment form confirming that the franchisee is the employee's sole employer, not Desi District Franchise Group. The franchisee is also required to use their legal name on all employment-related documents and cannot use Desi District's trademarks on these documents. This is a common practice in franchising to ensure a clear distinction between the franchisor and franchisee as employers.
This arrangement protects Desi District from potential liabilities related to the franchisee's employees. However, it also means that the franchisee bears the full responsibility for managing their workforce and complying with all applicable labor laws. While Desi District may set minimum qualifications for certain employee categories and require training programs, these actions do not establish a joint employer relationship. The franchisee retains autonomy in managing their staff, which is a typical characteristic of the franchise business model.