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Hard working employees get hurt all the time.  Sometimes, those injuries happen when an employee of one company is on the premises of another company.  What if those two companies appear to be the same?  What if you work for a national corporation like KFC and you get hurt at a local KFC location, a franchise?  If you sustain a workplace injury at a franchise, it could be difficult to figure out your rights.

Workers’ compensation law in Texas is clear that people who get hurt at work are entitled to workers’ compensation benefits.  This is true as long as the employer has workers’ compensation insurance, which is optional in Texas.  The downside of workman’s comp in Texas is that an injured employee can only get workman’s comp benefits – that’s all.  You can’t sue your employer if they have a workers’ comp insurance policy.  But, you CAN sue your employer for a work injury if the employer does not have workers’ compensation insurance

What Is A Franchisor and Franchisee

It’s hard to figure out what your rights are after a workplace injury at a franchise.  A Franchisor is a company that has established a business and has sold a copy of its business to a Franchisee.  An example is McDonald’s.  It is a national chain of burger restaurants.  The national corporation owns many of the locations.  However, quite a few of these restaurants are owned by local business people.  They bought a franchise. 

When you buy a franchise, you usually have to use the big corporation for support.  The Franchisee might have to buy all of its product from the national corporation.  There is constant interaction between the Franchisor and the Franchisee.  What happens when that interaction results in an injury? 

Example Of A Workplace Injury At A Franchise

Suppose you work for the national McDonald’s corporation.  Your job is to drive a truck and deliver hamburger buns to local McDonald’s restaurants.  At one stop owned by a Franchisee, an employee arriving to work drives a little too fast and runs you over in the parking lot.  What are your rights?

This example highlights the different recoveries you might have after a workplace injury at a franchise.  If the McDonald’s location is owned by the national corporation, then you might only be able to collect workers’ compensation benefits against your employer.  If the McDonald’s location is owned by a Franchisee, then you also want to consider a lawsuit against the Franchisee.  You have that option after a workplace injury at a franchise.

Multiple Recoveries

In the above example, you would qualify for workers’ compensation benefits from the Franchisor.  You would also have a third party claim against the Franchisee.  There is no recovery for pain and suffering in a workers’ compensation claim.  There IS a recovery for pain and suffering in a third party claim.  Your recovery can be a LOT bigger when you add the third party claim for the workplace injury at a Franchise.

How Do Franchisees Get Out Of Paying These Third Party Claims?

Remember that people who get hurt at work are generally only able to get workers’ compensation benefits.  When you sue, they get out of it because workers’ compensation is your “exclusive remedy.”  Most people think that if they got hurt at a local work location then it’s all covered under workers’ compensation.  They don’t know that they have a separate claim.  And Franchisees argue that you can only get workers’ comp benefits.  They might even get a court to believe that, unless you know otherwise.

Here’s the key.  The Texas Workers’ Compensation Act says that a Franchisor is not an employee of a Franchisee (Texas Labor Code Section 401.014).  This means that the companies are two different companies and one can’t claim to be a part of the other.  So, the employee of the Franchisor cannot be an employee of the Franchisee.  That frees you up to sue the Franchisee!

This Works In Reverse Too

If you are the employee of the Franchisee and you get injured by an employee of the Franchisor, then you can sue the Franchisor.  They don’t get to claim that you only get workers’ compensation benefits because of the statute we talked about above.  So, if you are the employee coming into work and the delivery driver from the Franchisor runs you over in the parking lot, you can get both workers’ comp from the Franchisee and a third party lawsuit against the Franchisor.  A workplace injury at a franchise works like a double recovery sometimes.

Final Thoughts

This is a very complex work injury situation.  As with all work injuries, you need to consult with an attorney to see if there are multiple recoveries that you might be owed in your situation.  A consultation is usually free, at least it is at our office.  We also offer phone consults or zoom consults too.  Whatever you prefer.