The Agreement Says You’re Independent. When Does the Franchisor Become Responsible Anyway?
A Florida jury found that a Papa John’s franchisee and its delivery driver were agents of the franchisor. The case exposes one of franchising’s most important legal tensions: how much control can a franchisor retain while still insisting the franchisee is an independent business?
Relevant FDD Topics: Item 1, Item 8, Item 11, Item 15, Franchise Agreement, Operations Manual
This report is for educational purposes only and is based on publicly available court filings, Franchise Disclosure Documents, corporate filings, and other records available at the time of publication. The statements and opinions expressed herein are those of the author.
The litigation discussed in this report remains ongoing. A jury has returned a verdict concerning agency and vicarious liability, but damages have not been awarded. Papa John’s Franchising, LLC denies liability and wrongdoing, has asked the court to overturn the verdict or grant a new trial, and has stated that it believes substantial grounds exist to challenge the verdict. Nothing in this report should be construed as legal advice or as a prediction regarding the ultimate outcome of the litigation.
On April 24, 2021, Alexis Vazquez Rivera was riding a motorcycle along State Road 52 near Little Road in Pasco County, Florida, when he was involved in a collision with a vehicle driven by Enrique Gutierrez. Gutierrez was working as a delivery driver for Jordan Nicholas Elliott, Inc., commonly referred to in the litigation as JNE. JNE operated a Papa John’s franchise restaurant in Hudson, Florida.
That part of the case was straightforward.
Gutierrez worked for the franchisee.
The much harder question was whether, for purposes of the accident, the franchisee was also acting as an agent of Papa John’s Franchising, LLC.
Rivera sued Gutierrez, JNE and Papa John’s. By the time the case reached its fourth amended complaint in March 2024, Rivera alleged that Papa John’s had the right to control, and did control, JNE and Gutierrez sufficiently to make the franchisor vicariously responsible for the delivery driver’s negligence.
Papa John’s said the opposite.
JNE was an independently owned franchise business. Gutierrez was JNE’s employee. JNE hired him, trained him, supervised him and paid him. The franchise agreement expressly identified JNE as an independent contractor.
For years, those competing positions moved through the Circuit Court of the Sixth Judicial Circuit in Pasco County.
Then, in May 2026, a jury was asked to decide the question.
It sided with Rivera.
The case is still far from over. But the verdict raises a question that reaches well beyond one automobile accident or one pizza franchise:
If a franchise agreement says the franchisee is independent, when can the franchisor still become legally responsible for what happens inside that supposedly independent business?
The Trial Was Not About How Much Rivera Was Owed
The May 2026 trial was unusual because the court did not ask the jury to determine damages. It did not even ask the jury to decide every remaining issue in the personal injury case. The proceeding was bifurcated. According to Papa John’s post-trial motion, the jury heard a three-day trial devoted specifically to whether Papa John’s could face vicarious liability under an agency theory. The evidence focused heavily on the franchise agreement, the Papa John’s Operations Manual, and testimony from representatives of both Papa John’s and JNE.
The final verdict form contained one question:
Whether Jordan Nicholas Elliott, Inc. and Enrique Gutierrez were agents of Papa John’s Franchising, LLC at the time of the April 24, 2021 crash.
On May 20, 2026, the jury checked “YES.”
That is the verdict Papa John’s later disclosed to its public-company investors.
In its August 6, 2026 quarterly SEC filing, Papa John’s described Rivera v. JNE, et al. as a Florida personal injury action involving a delivery driver employed by one of its franchisees. The company disclosed that its franchisor entity had received an adverse liability verdict in May, but that no damages had yet been awarded. A separate damages trial is currently expected in 2027. Papa John’s says it has substantial grounds to challenge the verdict, intends to continue vigorously defending the matter and denies liability or wrongdoing.
The company also told investors it could not reasonably estimate the potential loss because of the procedural posture, the absence of a damages award and uncertainty surrounding the application of franchisor-liability principles.
That uncertainty is precisely what makes the case worth examining.
On Paper, JNE Was Independent
Papa John’s did not enter the case without strong contractual language supporting its position.
In its 2025 motion for summary judgment, Papa John’s relied heavily on Section 21 of JNE’s franchise renewal agreement.
The agreement said JNE was to hold itself out to the public as an independent contractor, separate and apart from Papa John’s.
It also said Papa John’s had no responsibility for the day-to-day operation of the restaurant, no responsibility for managing JNE’s business, and no responsibility for or control over JNE’s employment practices. According to the language quoted by Papa John’s in its motion, JNE independently controlled its business and Papa John’s was not responsible for ensuring the safety and security of JNE’s customers or employees.
The same basic architecture appears in the 2021 form Franchise Agreement contained in Papa John’s FDD.
Section 21 says the franchisee remains an independent contractor and expressly rejects an agency, employment, partnership, joint venture or similar relationship. It says the franchisee controls the business and that Papa John’s has no responsibility for the restaurant’s day-to-day operations or the franchisee’s employment practices.
That language should look familiar to anyone who has read franchise agreements. Franchisors routinely emphasize that franchisees are independent business owners.
The franchisee hires the employees.
The franchisee pays them.
The franchisee handles payroll taxes, workers’ compensation and employment laws.
The franchisee signs the lease.
The franchisee assumes restaurant-level liabilities.
And when something goes wrong inside the business, the franchise agreement frequently says the franchisee is responsible.
But Rivera demonstrates why the analysis may not always end there.
JNE Appears to Have Exercised Considerable Independence
The evidence Papa John’s presented is important because this was not a case where the franchisee appeared to be nothing more than a corporate puppet.
According to Papa John’s summary judgment motion, JNE recruited, screened, hired and managed its own employees. It established employee compensation, benefits and incentive programs. It conducted employee orientations and created its own orientation video. JNE maintained its own employee handbook. It determined store hours, delivery charges and delivery areas. It handled customer complaints and local marketing.
It also appears to have exercised substantial independent control over driver safety. According to testimony cited by Papa John’s, JNE independently invested in Drivosity GPS technology to track delivery drivers and established its own driver safety-score requirements. JNE conducted quarterly vehicle inspections, independently obtained motor vehicle reports on driver candidates and held monthly safety meetings.
Papa John’s also cited testimony that it did not hire, train, supervise or terminate JNE employees.
Its franchise business representative testified that franchisees were not required to assign PIZZAcademy training to delivery drivers such as Gutierrez and that JNE was responsible for training its own employees. Papa John’s also maintained that it did not establish specifications for vehicles driven by franchisee delivery drivers.
Those are meaningful facts.
They are also part of why Papa John’s continues to argue that no reasonable jury should have found the agency relationship necessary to impose vicarious liability.
Then There Is the Franchise System Itself
The plaintiffs focused on a different side of the relationship.
A franchise does not operate under the franchisor’s trademarks while inventing its own concept from scratch. Uniformity is the product.
Papa John’s 2021 FDD described a system encompassing recipes and menu items, restaurant design and furnishings, software and programs, operating standards, specifications and procedures, quality control, training assistance, and advertising and promotional programs. The franchisor expressly reserved the ability to improve, amend and further develop that system over time.
The FDD also required substantial operational training.
Principal operators and restaurant managers were trained and certified to Papa John’s standards. The FDD said all team members had to complete new-team-member orientation and become certified in at least three operating stations within specified periods after beginning work. Papa John’s also reserved additional training requirements for key operators and managers.
Then there was the Operations Manual. The table of contents attached to the 2021 FDD had an entire section devoted to delivery.
It included subjects such as The Delivery Driver, Vehicle Preparation, Routing Guidelines, Preparing for Delivery, Delivery Procedures, Responsibilities upon Returning from a Delivery and Delivery Driver Safety. A separate restaurant safety section included Delivery Driver Security, Delivery Driver Eligibility Guidelines and Auto Accidents.
The significance of those materials was disputed at trial.
Papa John’s took the position that the Operations Manual did not give it day-to-day control over JNE. Its summary judgment motion cited testimony that a franchise store was not required to keep the manual in the restaurant, that franchise employees were not required to read it and that it functioned as a “resource.”
Rivera’s attorneys argued that the broader franchise relationship told a different story.
In their August 2026 opposition to Papa John’s post-trial motion, they argued that Papa John’s retained contractual authority to enforce operational standards, require approved products and procedures, control use of its marks, reject deviations from system standards and discipline or terminate franchisees for noncompliance.
That disagreement became the central issue placed before the jury.
What Does “Control” Mean in a Franchise?
This is where the case stops being a simple automobile-negligence lawsuit and becomes a franchise story.
Franchising requires control.
A franchisor cannot sell consumers the expectation that a Papa John’s restaurant in Florida will operate as part of the same system as a Papa John’s restaurant elsewhere while giving each franchisee complete freedom to decide how the brand will function.
The franchisor protects the trademarks.
It establishes product specifications.
It establishes systems.
It may establish customer-service expectations.
It inspects restaurants.
It can require corrections.
It can enforce contractual standards.
And ultimately, serious noncompliance can result in default or termination.
But franchising also depends heavily on the proposition that the franchisee is an independent business.
That leaves a difficult line to draw.
How much control is necessary to protect the brand?
And at what point does that control become enough to create an agency relationship?
Papa John’s says the control present in this case fell squarely on the franchise side of that line.
Rivera says it crossed it.
The jury agreed with Rivera.
The Jury Was Told the Contractual Label Was Not Controlling
The instructions given to the jury may become one of the most important parts of the eventual appeal.
The court told jurors that the question was whether JNE, and by extension Gutierrez, were agents of Papa John’s Franchising.
The special agency instruction then identified several forms of control that could suggest an agency relationship. They included control over trademarks, restrictions on working for competitors, employee training requirements, equipment specifications, requirements involving logo-bearing vehicles, customer-service procedures and inspections conducted at the principal’s discretion.
Then came the language Papa John’s is now challenging.
The jury was instructed that the characterization used by the parties in their written contract was not controlling.
In other words, the fact that the agreement called JNE an independent contractor did not automatically make JNE one for purposes of the agency question.
The jury was instructed to determine the relationship based on the totality of the relevant facts.
That instruction strikes directly at one of the assumptions prospective franchisees may make when reading their agreements.
A contract can state how the parties intend to characterize their relationship.
That does not necessarily prevent a court or jury from being asked to examine how the relationship actually operates.
Papa John’s Says the Jury Was Given the Wrong Framework
Papa John’s immediately challenged that result.
At the close of evidence, the company moved for a directed verdict, arguing that Rivera had failed to prove the kind of operational control necessary to establish agency. According to the post-trial filing, the judge took that motion under advisement even after the jury returned its verdict.
On June 4, Papa John’s filed a renewed motion for directed verdict and, alternatively, requested a new trial.
The company argues that the special jury instruction improperly blurred the distinction between ordinary agency relationships and franchise relationships.
Its position is that franchisors necessarily maintain some control over trademarks, standardized products and services, brand standards and contractual support without thereby becoming the principal of the franchisee.
Papa John’s argues that much of the evidence Rivera relied upon involved exactly those ordinary features of franchising.
The company also contends that training available to JNE employees was optional, that JNE controlled its employees and drivers, and that the jury instruction improperly minimized the significance of the parties’ independent-contractor agreement.
Rivera responded on August 2.
His attorneys argue that Florida precedent requires a fact-intensive examination of actual control and that the franchise label does not create special immunity from ordinary agency principles.
The opposition relies heavily on Parker v. Domino’s Pizza, a Florida appellate case that also involved a pizza franchisor, a franchisee, a delivery driver and an automobile accident. Rivera argues that Parker demonstrates why a franchisor’s control over operating procedures can create a factual agency question for the jury even when the underlying contract identifies the franchisee as independent.
Those competing arguments remain unresolved.
The Insurance Requirements Tell Another Part of the Story
By the time of the April 2021 accident, Papa John’s franchise documents already expressly addressed automobile liability as part of the risk associated with restaurant delivery.
The 2021 FDD required franchisees offering delivery to maintain automobile liability coverage, including non-owned automobile coverage, with limits of at least $1 million per accident for bodily injury and property damage. Franchisees were also required to maintain at least $1 million in umbrella coverage, and Papa John’s was required to be named as an additional insured on the applicable policies. Those insurance requirements remained in place even when a franchisee used third-party delivery services.
That structure remains materially unchanged in Papa John’s 2026 Franchise Agreement contained within its Franchise Disclosure Document. The current agreement continues to require at least $1 million in automobile liability coverage, including non-owned automobiles, at least $1 million in umbrella coverage, and additional-insured protection for Papa John’s. It also expressly requires franchisees to maintain those coverages even when using a third-party delivery service.
The standard 2021 Franchise Agreement also contained broad indemnification language. It provided that the franchisee would defend, hold harmless, and indemnify Papa John’s and its affiliates against claims and losses arising directly or indirectly from construction or operation of the restaurant when Papa John’s became a named defendant, subject to an exception for claims finally determined to have resulted directly from Papa John’s own negligence.
The exact economic allocation of liability in Rivera cannot yet be determined from the public record reviewed for this report. Nor should the terms of the standard 2021 agreement automatically be assumed to resolve the specific insurance and indemnification rights applicable to JNE.
But the structure illustrates another important feature of the franchise model.
The question of who can be sued is not necessarily the same as the question of who ultimately bears the financial loss.
A plaintiff may establish liability against a franchisor. The franchisor may have applicable insurance coverage. The franchisee may have coverage naming the franchisor as an additional insured. And the franchise agreement may separately create indemnification rights.
Those relationships can become extremely complicated after an accident.
The Franchisor Wants Control Without Becoming the Employer
There is nothing unusual about a franchisor wanting both consistency and legal separation.
In fact, the entire franchise model depends on it.
Consumers expect uniformity.
Franchisees expect a proven system.
The franchisor needs enough authority to protect its intellectual property, products, systems and brand reputation.
At the same time, the franchisee is supposed to own and operate an independent business.
That franchisee employs the workforce, leases the property, pays the operating expenses and assumes most restaurant-level risks.
For prospective franchisees, the independent-contractor provision can therefore look like boilerplate.
Rivera demonstrates that it is not.
The language is part of a much larger allocation of risk and responsibility.
What makes this case particularly interesting is that JNE appears to have exercised significant actual control over its own workers and driver-safety practices, yet the jury still found an agency relationship with Papa John’s after hearing the broader evidence.
Whether that verdict survives Papa John’s post-trial challenge, a future appeal, or both remains to be seen.
But the jury’s decision is already important.
This Was Buried in a SEC Filing, Not a Franchise Headline
There is also a due diligence lesson in how this story became visible.
Papa John’s did not disclose the May verdict through a major franchise-industry announcement. It appeared in the contingencies section of the company’s August quarterly SEC filing because public-company investors needed to be told about a potentially material legal exposure.
The current 2026 Papa John’s FDD had been issued before the May verdict, so its absence from that document should not be treated as evidence of a disclosure failure.
But the case illustrates why sophisticated franchise due diligence should not end with the FDD. When the franchisor is publicly traded, SEC filings can reveal developments that occur between FDD updates. Court records can reveal facts that a standardized disclosure document was never designed to explain.
And sometimes the most revealing information about the franchise relationship appears not in the sales materials, but in litigation where the parties are forced to explain exactly who they believe controls what.
The Reality Check
Papa John’s franchise agreement says the franchisee is independent.
JNE hired its own employees.
JNE paid them.
According to the defense, JNE trained and supervised them, established its own driver-safety practices, selected its own driver-monitoring technology and conducted its own vehicle inspections.
Papa John’s says it did not employ Enrique Gutierrez and did not control his day-to-day work.
Yet a Florida jury was presented with the broader franchise relationship and concluded that JNE and Gutierrez were agents of Papa John’s Franchising at the time of the crash.
Papa John’s is now asking the court to undo that verdict, arguing that the jury improperly treated ordinary franchise controls as evidence of agency. Rivera argues that Florida law required the jury to examine the totality of the relationship rather than simply accept the independent-contractor language written into the franchise agreement.
The court has not yet resolved that post-trial fight.
For prospective franchisees, the lesson is not that every franchisor will be responsible for the conduct of every franchise employee. Nor does this case establish that operational standards automatically create an agency relationship.
The lesson is more fundamental.
A franchise agreement can say who the parties intend to be. The law may still ask how the relationship actually functions.
That question matters to both sides of the franchise relationship.
Franchisors need enough control to protect the system without assuming every liability arising inside independently owned businesses.
Franchisees need enough independence to actually operate the businesses they own while remaining subject to the standards they agreed to follow.
Rivera v. JNE, Inc, Papa John’s Franchising LLC, et al puts that tension in front of a jury.
For now, the jury’s answer is clear.
The franchise agreement called JNE independent.
The jury found agency anyway.
