Caffeine Coffee Shops, Inc., sells franchises. Caffeine imposes on its fran­chi­sees standards of operation and personnel training methods. What is the potential pitfall to Caffeine if it exercises too much control over its fran­chisees? What type of control would be too much. What defenses would Caffeine Shops have against any claims? What type of business entity is Caffeine Shops and why does it matter? Can the control and liability be addressed in the franchise agreement? Why or why not?

Caffeine Coffee Shops, Inc., sells franchises. Caffeine imposes on its fran­chi­sees standards of operation and personnel training methods. What is the potential pitfall to Caffeine if it exercises too much control over its fran­chisees? What type of control would be too much. What defenses would Caffeine Shops have against any claims? What type of business entity is Caffeine Shops and why does it matter? Can the control and liability be addressed in the franchise agreement? Why or why not?

 

Solution

There