Miller v. McDonald’s Corp.
945 P.2d 1107 (1997)


PROCEDURE:Plaintiff customer sought damages for injuries she suffered while eating a sandwich purchased at a restaurant. The Circuit Court of Multnomah County (Oregon) granted summary judgment to defendant corporation on the ground that it did not own or operate the restaurant; rather, the owner and operator held a franchise from the corporation.

FACTS: Miller (P), a customer, was injured when she bit into a sapphire found in her Big Mac sandwich at the 3K restaurant. She testified that she went to the restaurant because she believed that McDonald's (D) owned, operated, and controlled it, relying on McDonald's (D) reputation for quality service and a good standard of care. Miller (P) sued McDonald's (D) for negligence. McDonald's (D) moved for summary
judgment because it did not own or control the restaurant. The court granted the motion.

ISSUE:(Under the right to control test) Whether the franchise agreement goes beyond the stage of setting standards, and allocates to the franchisor the right to exercise control over the daily operations of the franchise, does an actual agency relationship exist?

RULE: One who represents that another is his servant or other agent and thereby causes a third person justifiably to rely upon care or skill of such apparent agent is subject to liability to third person for harm caused by lack of care or skill of one appearing to be servant or other agent, as if he were such


HOLDING: The court reversed the grant of summary judgment because there was enough evidence to permit a jury to find that the corporation was vicariously liable for the franchisee's alleged negligence. There was sufficient evidence to raise an issue of actual agency because the corporation had the right to exercise control over the franchisee's daily operations. There was sufficient evidence to raise an issue of apparent agency because the corporation's requirements were imposed to maintain an image of uniformity. The level of the customer's reliance on the corporation's reputation was also not unreasonable as a matter of law. The order was reversed and the case was remanded.


ANALYSIS: Courts throughout the country vary on the degree of control required to hold a franchisor vicariously liable for its franchisees' negligence. While some acknowledge the bare right of control over the general business operations as the determinative factor, others require evidence of actual control or a right of control over the specific business practice creating the liability. Regardless of the legal standard, cases such as this crucially depend upon the specific facts at issue.