A company whose main business is the sale of franchises to franchisees is not a statutory employer under the Act and is not responsible to pay workers’ compensation benefits.

The court’s analysis of the agreement between the Franchisor and the Franchisee (the employer) showed that the Franchisor’s main business was the sale of franchises to franchisees that desired to use their name, “system” and marketing expertise. While the Franchisor was connected to the Franchisee through the agreement, the court found that the Franchisor was not in the restaurant business or the business of selling salads. Additionally, the court distinguished this case from the Pennsylvania Supreme Court’s landmark decision in Six L’s Packing Company v. WCAB (Williamson), 44 A.3^rd 1148 (Pa. 2012), by pointing out that, in that case, a subcontractor hired the claimant to perform an essential part of the general contractor’s business. The court concluded that the Franchisee was the claimant’s employer at the time of the injury and liable for payment of benefits. Because they did not have workers’ compensation insurance, the Uninsured Employers Guaranty Fund was responsible for payment.

_{Case Law Alerts, 1st Quarter, January 2016}

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