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From Lawletter No. 176 Operating hours requirements raise crime issue An increasing number of dealers and industry observers are wondering whether the major oil companies might face liability as a result of their insistence on 24-hour operation. The crime rate in some areas has become so high that it is virtually a certainty that there will be a late night robbery sooner or later. We suspect that sooner or later, injured franchisees, clerks or attendants or their families might sue franchisors for requiring dealers to stay open during high-risk hours or for failing to provide adequate security. Juries tend to make large awards against multi-billion dollar corporations when given the chance. The key question is whether the courts will allow such suits as a matter of law. The issue has yet to be decided. A recent ruling by a Pennsylvania federal court involving the fast food industry may break some new legal ground in this area. In the recent case of Wright v. McDonald's Corp. (E.D. Penn., Civ. Action No. 91-2061, 1993) CCH Bus. Fran Guide para. 10,338, the court ruled that a franchisor may be liable for injury to a franchisee caused by a defective water heater. The court further held that the franchisor could not claim immunity from such a suit because of provisions in the franchise agreement. Some courts might very well apply the same logic to an oil industry franchisor that knows that late night operation will probably result in the wounding or death of the franchisee or his employees. The extremely high risk involved in some areas could be a decisive factor. Recommended procedures: We suggest the following in this area: (1) Don't ignore defaults: As we have repeatedly warned in these pages, never ignore default notices from your franchisor. For guidelines on saving, filing and responding to such notices, see Lawletter Nos. 125 and 155. (2) Do not violate franchise without legal advice: Do not violate your franchise agreement without first obtaining legal advice. Courts tend to go both ways on the question of whether a franchisor may terminate a dealer under the federal Petroleum Marketing Practices Act, e.g., see Lawletter Nos. 153, 157, 164 and 175. (3) Requesting a waiver: Although the franchisor may be able to enforce an hours clause, it still may be liable for injuries caused as a result of such enforcement. However, the record should show that the franchisor knew of the danger in a particular case, but refused to allow the dealer to close earlier or to take appropriate security precautions. You may want to send a certified letter to your franchisor, warning of the danger in your particular case, and asking for assistance. In some cases, franchisors have been known to discretely permit closure. |
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