Franchising & Distribution Law Blog

This month, Delaware passed a law to clarify that the franchisor/franchisee relationship is not an employment relationship. The law applies to relationships that are defined as a franchise under the Federal Trade Commission franchise rule.

As we previously discussed, some states - including Delaware now - are adopting legislation to clarify that franchises are independent contractors. These laws come in the wake of cases that find franchisees to have an employment relationship.

A former McDonald’s employee has brought a class action lawsuit against the franchisees of 16 McDonald’s locations in Pennsylvania (the franchisor is not named in the suit), claiming their practice of paying employees via mandatory payroll debit cards is unfair and illegal.