How Can a Law Firm Assist Franchisees Facing Health, Safety, or ADA Compliance Issues?

One of the great advantages of purchasing a franchise is the power of a national brand behind your business. Yet this can become a potential negative if a customer believes you have violated the Americans with Disabilities Act (ADA) or health and safety regulations in some manner. Plaintiffs and their attorneys may feel confident they can win a large settlement since you have a large franchisor to rely on for compensation.

There has been a recent increase in ADA lawsuits against retailers, particularly for non-compliance on websites. It is essential that you protect yourself and your employees against frivolous claims, and the franchise law firm of Luther Lanard can help. Below, we discuss how a law firm can assist franchisees facing health, safety, or ADA compliance issues in Dallas, TX. If you have any additional questions about ADA compliance matters, contact our franchise law firm online.

Understanding Potential Violations in the Franchise Industry

Compliance issues can stall or stop your business operations, resulting in fines or other penalties, as well as civil actions from customers or other plaintiffs. Food service franchises often face the most difficult combination of issues, since they must comply with complex state and federal requirements to ensure individuals do not get sick or injured in an inherently dangerous environment.

Health and Safety Code Violations

According to the Occupational Health and Safety Administration (OSHA), employers must provide a safe working environment for workers, free of hazards. The most common violations include a lack of protection from falls, eye injuries, and respiratory harm. Without adequate training and enforcement, violations can hurt your customers and your employees, leading to lawsuits. 

Food service establishments must also follow laws enforced by the U.S. Department of Agriculture (USDA) and the Texas Department of State Health Services. Both groups perform inspections and respond to complaints, issuing citations with penalties. Further, the TxDHS may pursue public health sanitation concerns if your establishment improperly disposes of kitchen grease or other waste products. Anyone harmed by these violations could consider a lawsuit.

To help you maintain a safe establishment, the Texas Department of Insurance (TDI) offers the Occupational Safety and Health Consultation Program (OSHCON). It provides confidential assistance in identifying and rectifying health and safety issues in your franchise.

ADA Violations

Passed in 1990, the Americans with Disabilities Act (ADA) mandates accessibility features to accommodate all people. Typically, your franchise documentation will instruct you on how to make your location ADA-compliant, but you can’t simply build your store and consider the job done. You must stay informed and educate your employees to minimize the potential for legal action against your business.

The ADA’s primary purpose is to remove any obstacles that would limit a disabled person’s ability to access, use, or enjoy your franchise’s services and facilities in the same manner as a non-disabled individual. This might include meeting ADA standards for accessible design and even ensuring your website follows regulations. Plaintiffs may be disabled people themselves, or they could be organizations focused on holding violators accountable.

When you establish your relationship with a franchise lawyer to purchase your franchise, you can benefit from maintaining the connection in the event of legal concerns. Your attorney can help you interpret your options regarding your franchise. They can also connect you with other professionals who have backgrounds in defending businesses against health, safety, and ADA claims.

Common Grounds for Lawsuits Against Your Individual Location or the Entire Franchise System

Lawsuits over website ADA violations have skyrocketed in recent years. Franchisors that use Artificial Intelligence (AI) to generate website design and content could leave themselves and all their franchisee participants open to lawsuits.  One such case (Acheson Hotels, LLC v. Laufer) before the U.S. Supreme Court involved a person who claimed that a hotel chain did not meet ADA accessibility requirements on its website. 

Other common ADA cases involve:

• Physical Barriers: Your location must provide ramps at entrances for wheelchair users, along with ADA-compliant restrooms and sufficiently wide hallways. You must also have sufficient parking spaces to accommodate those using vans or other vehicles to assist with their mobility devices. 
• Communication Barriers: You must provide menus or other service information in Braille and offer aids for those with hearing or vision impairments.
• Employment Barriers: You must comply with the Equal Employment Opportunity Commission (EEOC) rulings on ADA compliance in hiring, disciplinary, and all other employment matters regarding those with disabilities. 

Often, it is not just your specific franchise that gets caught up in compliance lawsuits. There has been a rise in so-called “tester” cases in which a person tests a facility’s compliance with the intent to uncover violations but no intent to patronize the business. If your franchisor has multiple locations around the country, testers could bring their case in jurisdictions such as California, New York, or Florida, where laws often favor plaintiffs.

Texas Has Its Own Accessibility Standards

While following the ADA rules, your Dallas franchise location must also adhere to the Texas Accessibility Standards (TAS) regarding the elimination of architectural barriers. This extremely detailed documentation can help you verify that you are in compliance while reviewing new building plans, existing facility renovations, and commercial lease agreements. 

The TAS penalties and sanctions against building owners range between $500 and $5,000. This could become important if a lawsuit names you as a defendant alongside your commercial landlord. You may be able to present evidence showing certain circumstances were out of your control or responsibility. 

Potential Consequences of Non-Compliance

Aside from any civil costs, you and your franchisor could face substantial penalties if a government investigation finds validity to ADA or other complaints. First-time offenses can result in upwards of $75,000 in ADA civil monetary penalties per complaint, while subsequent violations cost a maximum of $150,000 per instance. Remedies for EEOC violations vary, but compensation is capped at between $50,000 and $300,000, depending on the employer’s size. 

The most detrimental risk comes from lawsuits, which can cause varying levels of financial injury and reputational damage. You can likely count on your franchisor to assist you with legal action against your location, but we definitely advise hiring your own franchise attorney to aid you with a customized solution. 

You may also need assistance if your business is in a strip mall or other shopping center when the property owner commits violations. The United States Attorney’s Office for the Southern District of Texas recently announced settlement agreements with Houston-based shopping centers regarding ADA non-compliance. 

How Your Franchise Attorneys Can Help You Limit Your Exposure to ADA and Other Non-Compliance Lawsuits

By working with an experienced law firm focused on franchise law matters, you can implement practices to prevent non-compliance issues before they start. An ounce of prevention really is worth a pound of cure, and your first step is conducting an accessibility audit. This can even be part of your due diligence when buying an existing franchise or when you are reviewing remodeling requirements from your franchisor.

In addition, regularly conducting inspections and walk-arounds on your premises and digital spaces allows you to spot issues and repair them before they become a problem. You can also establish clear policies regarding those with disabilities, whether employees or customers. Train your staff members thoroughly and regularly to maintain their commitment to this vital part of your business. 

Health, safety, and ADA compliance policies are just some of the employment policies all businesses should have. Your franchise lawyers can recommend professionals who will review your training and policy goals, and then recommend improvements. By accessing your franchise attorney’s collaborative network, you can have assistance for a wide range of compliance and legal matters. 

Your Franchise Attorneys Will Also Guide You If You Are Already Facing a Lawsuit or Dispute

After someone files an ADA complaint, it can take as long as three months for the Department of Justice (DOJ) to respond. Not every complaint turns into an investigation, but if you receive notice that your franchise is a target, you must take it very seriously. If the DOJ finds grounds for pursuing a lawsuit on behalf of the complainant, you will need extensive legal representation.

You should receive a formal notice from the investigating agency that someone has filed a complaint, or you may get a demand letter describing the lawsuit and the plaintiff’s demands. At this point, contact your attorney immediately for further advice. They can help you determine whether you should settle or if the claim is valid.

ADA claims usually begin with mediation to settle the issue out of court, a form of alternative dispute resolution (ADR) recommended by the City of Dallas. Even this process requires skilled assistance to reach a satisfactory outcome. In the event ADR doesn’t work, your legal team will prepare your defense for trial.

Building Your Defense Against an Investigation or Lawsuit

The franchisor may come after you for issues related to ADA compliance and health and safety violations.  Further, franchise agreements typically require that you indemnify franchisors for such claims.  Your franchise attorneys and their collaborating legal team will help you gather evidence demonstrating your actions to comply with ADA and other regulations. This may include records of your accessibility audits, regular inspections, corrective procedures, and training programs. Your lawyers will meet with investigators and make every effort to rebut the claim. 

If you are facing a lawsuit, your lawyers assess the other side’s information during the discovery phase. Once they have seen what is available and how your evidence stacks up against it, they can further advise you on whether trying to reach a settlement is the best option. Settling a dispute is not always the right choice, but it does have significant advantages. 

By entering settlement discussions, you may be able to reduce your penalties by repairing the non-compliant situation quickly, leading to dismissal of the complaint. If you settle with the plaintiff in a lawsuit, you often end up paying less than if the case goes to trial. Finally, because a settlement is private and not a matter of public record, as a lawsuit is, you can minimize the impact on both your personal reputation and your franchise brand.

Staying Compliant Allows Your Business to Run Smoothly and Successfully

Ultimately, maintaining ADA, health, and safety compliance is critical to your franchise’s success, both morally and financially. By investing in the effort to avoid barriers, keep the premises safe, and train your employees, you support your long-term growth goals. You also develop your reputation among your customer base as an inclusive business that welcomes everyone. 

ADA compliance comes with additional benefits from the Internal Revenue Service. The Architectural Barrier Removal Tax Deduction allows deductions up to $15,000 each year when you improve access for disabled and elderly patrons. You can also take advantage of the Disabled Access Credit for small businesses earning under $1 million a year and the Work Opportunity Tax Credit for hiring workers with disabilities.

You have enough to consider as you manage your franchise to the success you envisioned when you started on this path. Build compliance protocols into your business plan with help from a franchise lawyer and establish your defense against potential lawsuits and disputes. By consulting regularly with your legal team, you can stay aware of changes that may affect your compliance programs and remain ahead of potential issues.

Partner With Luther Lanard for Dedicated Support Throughout Your Franchise Experience

At Luther Lanard, our mission is to provide knowledgeable and skillful support for franchise owners, from the moment you begin researching your industry, through operations, and when you’re ready to sell. We believe our results demonstrate how we treat every client with integrity, honesty, and professionalism, carefully tailoring our work to their unique needs.

Contact Our Dallas Franchise Attorneys Today

We understand the franchising relationship and can help you solve the issues you will face along the way to success. Our attorneys can aid you with buying an existing franchise, reviewing franchise agreements, negotiating commercial lease contracts, and handling disputes. Learn more when you reach out to us today. Contact our franchise lawyers online for a consultation at our Dallas location.