Alert - California Franchise Law - The Fine Line Between Franchisees and Independent Contractors May be Blurring
A “quasi-franchise” is a licensee whose relationship to its licensor is functionally similar, but legally different, from a franchisee-franchisor relationship. The purpose of such a relationship is generally to avoid the heightened scrutiny and protections imposed by California law on franchisors and franchisees. However, the perceived benefits of a “quasi-franchise” relationship may be coming to an end, based on a district court’s recent decision in Ambrose v. Avis Rent a Car System, 2014 U.S. Dist. LEXIS 170406 (C.D. Cal. Dec. 8, 2014). In Ambrose, Tammy Dotson (“Dotson”) owned and operated a rental car business. Dotson signed an “Operator Agreement” with Budget Rent a Car System, Inc. (“Budget”) which provided that Dotson was an “independent contractor” of Budget and “not a...