## Facts

- A work-release inmate employed by an Arby’s franchisee left work without permission and shot Robin Kerl and her fiancé, David Jones, in a Wal‑Mart parking lot; Kerl was seriously injured and Jones was killed before the shooter died by suicide.
- The shooter worked at an Arby’s restaurant operated by Dennis Rasmussen, Inc. (DRI), an Arby’s franchisee.
- Plaintiffs sought to hold the franchisor, Arby’s Inc., liable for the franchisee’s alleged negligent supervision of the employee.
- The franchise relationship included detailed standards associated with brand quality and uniformity, while the franchisee operated an independent business using the franchisor’s marks.
- DRI retained responsibility for hiring, firing, and supervising its employees, including the shooter.

## Issues

1. Whether a franchisor may be vicariously liable under respondeat superior for a franchisee’s alleged negligent supervision of an employee when the franchisor’s contract reserves extensive brand and system controls but not day-to-day control over employment and employee conduct.
2. Whether the franchisor may be liable under apparent agency based primarily on the franchisee’s use of the franchisor’s trade name, logos, and related branding.

## Decision

- The Wisconsin Supreme Court affirmed summary judgment for Arby’s Inc.
- Respondeat superior did not apply because the undisputed facts did not establish a master–servant relationship between Arby’s and DRI with the requisite control over daily operations or the employee’s conduct.
- Apparent agency was not shown because branding and trademark use, without proof of franchisor manifestations creating apparent authority and actual detrimental reliance by plaintiffs, was insufficient.

## Legal Principles

- Vicarious liability under respondeat superior requires a master–servant agency relationship, including control or a right to control the agent’s physical conduct in performing work.
- In franchising, contractual provisions aimed at protecting trademarks and ensuring uniform quality (e.g., product, service, cleanliness, and marketing standards) do not, by themselves, establish the control necessary to create a master–servant relationship.
- Franchisor vicarious liability requires evidence of control (or a reserved right of control) over the franchisee’s day-to-day operations and the relevant instrumentality of the harm, including employment supervision tied to the tort.
- Apparent agency requires (1) principal conduct that would lead a reasonable person to believe the actor is authorized to act for the principal and (2) the plaintiff’s actual reliance on that appearance to the plaintiff’s detriment.
- A franchisee’s use of the franchisor’s name, logos, signage, uniforms, or trade dress, standing alone, does not establish apparent agency.

## Conclusion

The court held that a franchisor is not vicariously liable for a franchisee’s alleged negligent supervision of an employee absent evidence that the franchisor controlled (or had a right to control) day-to-day employment-related conduct connected to the harm, and that apparent agency cannot rest solely on trademarked branding without proof of actual, detrimental reliance.


Kerl v. Dennis Rasmussen, Inc., 682 N.W.2d 328 (Wis. 2004)