What liability does Extreme Art Studio have for employment-related actions at the franchise?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
remuneration, compliance with wage and hour requirements, personnel policies, benefits, recordkeeping, supervision, and discipline of employees, and you agree to indemnify us for any such liabilities we incur. You expressly agree, and will never contend otherwise, that our authority under this Franchise Agreement to certify certain of your employees or independent contractors for qualification to perform certain functions for the Extreme Art Studio Business does not directly or indirectly vest in us the power to hire, fire, or control any such employee or independent contractor. You agree that any direction you receive from us regarding employment policies should be considered as examples, that you alone are responsible for establishing and implementing your own policies, and that you understand that you should do so in consultation with local legal counsel well-versed in employment law.
5. MARKS.
5.1 OWNERSHIP AND GOODWILL OF MARKS. Our affiliate ("Trademark Owner") has licensed the Marks to us to use in connection with the franchising of Extreme Art Studio Businesses. Your non-exclusive right to use the Marks is derived only from this Franchise Agreement and limited to your operating the Franchised Business according to this Franchise Agreement and all System Standards we prescribe during its term.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, Extreme Art Studio does not have direct liability for employment-related actions at the franchise level. The FDD states that the franchisee is solely responsible for employment policies and decisions. Extreme Art Studio's authority to certify franchisee employees does not give them the power to hire or fire.
Extreme Art Studio provides guidance on employment policies as examples, but the franchisee is responsible for establishing and implementing their own policies in consultation with local legal counsel. This means that franchisees must seek their own legal advice to ensure compliance with employment laws and regulations.
However, franchisees are required to maintain liability insurance that covers claims for bodily and personal injury, death, and property damage caused by the operation of the franchised business or the activities of their personnel. While this insurance requirement does not directly transfer liability to Extreme Art Studio, it ensures that the franchisee has coverage for potential employment-related claims. Franchisees must ensure they obtain adequate employment liability insurance, as Extreme Art Studio requires franchisees to maintain certain insurance policies, and may periodically increase the required coverage amounts.