Is a Franchisor Liable for Its Franchisees’ Calls and Texts?

A franchisor isn’t liable under the Telephone Consumer Protection Act just because a franchisee’s texts carry its brand. Courts ask ordinary agency questions: did the franchisor control the campaign, lead consumers to believe the sender spoke for it, or knowingly accept the benefits? Taco Bell won a texting case on that basis, and after the Supreme Court’s June 2025 McLaughlin decision, courts needn’t follow the FCC’s reading of the statute. Clean records and clear lines of control give a franchisor its best arguments.

When can a franchisor be liable for a franchisee’s texts?

Only if it sent the messages itself or if agency law makes it answer for whoever did. The statute’s autodialer and recorded-voice provision makes it unlawful “to make any call” to a cell phone without consent using an autodialer (equipment that dials numbers it generates randomly or sequentially) or a prerecorded voice (a recorded or artificial voice instead of a live person), under 47 U.S.C. § 227(b)(1). The Do Not Call provision, which protects numbers on the National Do Not Call Registry (the federal list of people who don’t want sales calls) and people who ask a company to stop, gives a claim to anyone who receives more than one violating call “by or on behalf of the same entity” within 12 months, under § 227(c)(5).

Under § 227(b)(3), exposure is actual loss or $500 per violation, whichever is greater, and a court may raise it to up to $1,500 if it finds the violation willful or knowing. Under § 227(c)(5) it’s up to $500, with the same discretionary increase, but the statute gives the business an affirmative defense if it “has established and implemented, with due care, reasonable practices and procedures to effectively prevent telephone solicitations in violation of the regulations.”

The FCC’s 2013 declaratory ruling in the Dish Network proceeding concluded that a seller “may be liable for violations by its representatives under a broad range of agency principles,” reaching apparent authority and ratification as well as formal agency. The Supreme Court noted that ruling in Campbell-Ewald Co. v. Gomez, writing that “the Federal Communications Commission has ruled that, under federal common-law principles of agency, there is vicarious liability for TCPA violations.”

Plaintiffs run three theories: actual authority (including the right to control how the work is done), apparent authority (the franchisor’s own conduct led the consumer to believe the sender acted for it), and ratification (the franchisor accepted the benefit of conduct it knew about).

What happened when consumers sued Taco Bell and Papa John’s?

Taco Bell won on summary judgment, and Papa John’s faced a certified class.

In Thomas v. Taco Bell Corp., according to the court, a Chicago-area association of Taco Bell operators hired an ad agency, which hired a texting vendor to send a promotional blast. Taco Bell’s marketing fund policy required its approval before it would pay for local campaigns, a Taco Bell manager sat on the association’s board and voted for the promotion, and Taco Bell’s fund paid the vendor’s invoice. The district court still granted summary judgment for Taco Bell, holding that “knowledge, approval, and fund administration do not amount to controlling the manner and means of the text message campaign.”

The Ninth Circuit affirmed in an unpublished memorandum, assuming apparent authority and ratification could apply and rejecting both: “Thomas has not shown that she reasonably relied” on any authority Taco Bell gave the senders, and ratification failed because none of them were Taco Bell’s agents.

Agne v. Papa John’s International, Inc. went differently at class certification. According to the court’s order, some franchisees gave a texting vendor customer numbers generated from Papa John’s point-of-sale system, and one franchisee testified that when his test campaign flopped, his Papa John’s business director told him to “try it again.” The court also cited evidence that the vendor had presented at a Papa John’s operators summit, noting that Papa John’s actual role had yet to be established. The court rejected Papa John’s argument that the plaintiff lacked standing to sue it, writing in Agne that it “will not resolve a disputed issue of fact at this preliminary point in the litigation under the guise of deciding whether Plaintiff has standing,” and it certified a national class.

A Florida federal court saw the same tension in a Pandora jewelry case. According to the magistrate judge’s report, the franchise agreement in Ramos v. Hopele of Fort Lauderdale called the franchisee an independent contractor, but it also required pre-approval of advertising. The franchisee never sought Pandora’s approval for its texts. In a footnote of the report, the magistrate judge said “there are genuine issues of material fact as to whether Hopele acted as Pandora’s agent,” but recommended judgment for the defendants on autodialer grounds without deciding that question, and the district judge adopted the report.

Does the FCC’s Dish ruling still control after McLaughlin?

Probably not. Part of it never bound courts, and McLaughlin changed the rest.

Paragraph 46 of the Dish ruling lists evidence that may show apparent authority, and much of it reads like a description of a franchise system. It points to giving the outside marketer “access to information and systems that normally would be within the seller’s exclusive control,” and it adds that “the authority to use the seller’s trade name, trademark and service mark may also be relevant.” Footnote 102 says that contract terms forbidding unlawful telemarketing “would not, by themselves, absolve the seller of vicarious liability.”

But when Dish petitioned for review, the D.C. Circuit dismissed the petition in Dish Network, LLC v. FCC because the FCC conceded that the guidance “has no binding effect on courts.”

On June 20, 2025, in McLaughlin Chiropractic Associates v. McKesson Corp., the Supreme Court held: “District courts are not bound by the agency’s interpretation, but instead must determine the meaning of the law under ordinary principles of statutory interpretation, affording appropriate respect to the agency’s interpretation.” As I read it, district courts are no longer bound by the Dish ruling itself. Circuit precedent applying agency principles to the TCPA still binds district courts in that circuit, and McLaughlin noted that a district court “may be bound under principles of vertical stare decisis to adhere to the court of appeals holding” in a pre-enforcement challenge to the agency’s order. The FCC’s gloss on how agency works in telemarketing is now an argument, not a rule.

Franchisors can use parts of the same Dish ruling. Paragraph 45 says that when a store is selling on its own account, having bought goods from a manufacturer to resell, “the manufacturer would not be a seller at all.” In paragraph 47, the FCC said it did “not think that an action taken for the benefit of a seller by a third-party retailer, without more, is sufficient to trigger the liability of a seller.” The next sentence of the ruling cuts the other way: a seller can be liable “when it has authorized that telemarketer to market its goods or services.” I think a trademark license to run a local business is a different thing from authorizing someone to telemarket the licensor’s product, but a franchisor that requires or funds the franchisee’s texting makes that line harder to hold.

Can ratification reach a franchisor that didn’t approve the texts?

Yes, and in my view it’s the theory franchisors most often overlook. In the Ninth Circuit, ratification doesn’t always require an existing agency relationship. The court held in Henderson v. United Student Aid Funds that ratification “may create an agency relationship when none existed before” if the actor pretended to act as the principal’s agent, and that a principal can ratify by knowingly accepting benefits or through willful ignorance.

A franchisee texting under the brand name gives a plaintiff room to argue it purported to act for the franchisor. If complaints reach headquarters and royalties keep flowing from the campaign with no response, that’s the fact pattern a ratification claim needs. After complaints, Papa John’s sent a memo, and according to the court’s order in Agne, the memo told its franchisees that sending unsolicited texts was “most likely ILLEGAL” and directed those who had shared customer data with the vendor to reclaim it or have it deleted. The court didn’t decide what legal effect that memo had, and Papa John’s stayed in the case, but I’d want that kind of written response on file before a demand letter arrives.

What do franchise agreements and approved-vendor lists say about control?

They matter, but courts separate brand control from control over the calls. The Ninth Circuit said in Jones v. Royal Administration Services that the extent of the principal’s control is the “essential ingredient,” and it relied on a contract that expressly barred the marketer from robocalling to reject actual authority.

For any franchise system, I’d separate two kinds of standards. Standards about how the brand looks and what the offer says are trademark protection. Decisions about who gets texted, whether consent exists, when the message goes out, and how opt-outs are handled are the manner and means of the TCPA conduct itself. The more of the second category the franchisor takes over, the stronger the control argument gets.

What changes when the franchisor runs the texting program?

If the franchisor or its advertising fund sends brand-wide texts, it’s the sender, and the agency defenses disappear. The fight moves to the merits, mainly consent and opt-out handling.

The Second Circuit’s May 2024 decision in Soliman v. Subway Franchisee Advertising Fund Trust shows both sides. According to the opinion, the consumer had texted STOP and received a reply that she’d been “unsubscribed from all programs,” then got another offer four days later. Over a partial dissent on the autodialer question, the Second Circuit affirmed dismissal, concluding that “the text message did not violate the TCPA,” because the system didn’t generate numbers randomly or sequentially and a text isn’t a prerecorded voice. I covered the autodialer definition after Duguid in an earlier post on autodialer defenses.

Don’t read Soliman as a pass for texts after STOP. Her complaint relied only on § 227(b). A Do Not Call claim follows different rules, and a franchisor running a system-wide program should assume one opt-out reaches the whole program. The FCC’s rule says a do-not-call request doesn’t extend to affiliated entities “unless the consumer reasonably would expect them to be included given the identification of the caller and (for telemarketing calls) the product being advertised,” under 47 C.F.R. § 64.1200(d)(5).

The FCC’s rule limiting written consent to one seller at a time was vacated by the Eleventh Circuit in Insurance Marketing Coalition Ltd. v. FCC in January 2025, along with the requirement that calls be “logically and topically associated” with the interaction that prompted consent, though as of this writing the vacated wording still appears in the eCFR. Prior express written consent is the signed agreement the FCC requires for autodialed or prerecorded marketing. Without the one-seller rule, I’m comfortable with a single form that lists the brand and each participating franchisee by name.

How can a franchisor set TCPA standards without taking control?

Require compliance by outcome, not by operating the campaign. A franchise agreement can bar franchisees from violating the TCPA, the kind of term Jones credited. Jones didn’t address manual standards, so write the ones on consent and opt-out records as results, not instructions for running each campaign.

What I’d tell a franchisor not to do is hand franchisees call lists or export tools without consent controls, pressure them into campaigns, or let field staff pick vendors for them. If the brand wants a system-wide texting program, it should own it fully, with its own consent capture, a single suppression list, and quiet-hours controls. The worst position is the one in between, where the franchisor shapes the campaign and the franchisee holds the records.

When a franchisee’s texts draw a demand letter

1. Put a litigation hold on the franchisor’s own systems that touch customer numbers, including point-of-sale exports, the brand texting platform, and any data the franchisee or its vendor pulled from them, along with the consent records for the numbers involved.
2. Pull the opt-out and internal do-not-call records for the number, from the franchisee, the vendor, and any brand-wide program, with dates.
3. Get the national Do Not Call Registry scrub records and the dates of the registry versions used for the campaign.
4. Collect the franchise agreement, the operations manual’s marketing sections, the approved-vendor list, field-staff emails about the campaign, and the vendor’s contract and message files.
5. Talk to a lawyer before responding to the letter, contacting the claimant, or telling the franchisee how to handle it.

The firm’s California TCPA defense lawyers page explains how it approaches claims involving franchisee marketing texts.

Questions franchisors ask about franchisee marketing texts

Does an independent-contractor clause protect a franchisor?

It helps, but it doesn’t decide the case. The Ninth Circuit said in Henderson that whether an agency relationship exists “is for a court to decide based on an assessment of the facts of the relationship and not based on how the parties define their relationship.” In the Pandora case, the franchise agreement had exactly that clause, and the magistrate judge still noted in a footnote that agency presented fact issues. The clause works best when the franchisor’s conduct matches it.

Does approving a franchisee’s ad copy make the franchisor liable?

Not by itself. In Thomas, Taco Bell’s approval of a local promotion that included a text component wasn’t enough, because approval isn’t control over who gets the message and how it’s sent. The Dish ruling says approving scripts “may also be persuasive” evidence of apparent authority, but that guidance doesn’t bind courts. Keep approvals focused on brand and offer content, and document that the franchisee chooses recipients and timing.

Can one customer’s opt-out bind every franchisee?

Sometimes. Under the FCC’s do-not-call rules, unless the subscriber says otherwise, a request applies to the business that called and reaches affiliates only if the consumer would reasonably expect it to. A STOP reply to a text revokes consent per se under the FCC’s rules. For a brand-wide program, assume one STOP covers the whole program. For a single franchisee’s local texts, the answer depends on how the message identified the sender, so clear franchisee identification helps.

Is the brand’s advertising fund a separate target?

Yes, if it sends the messages. In Soliman, the plaintiff sued the Subway Franchisee Advertising Fund Trust directly, not a franchisee. A fund that runs texting is the sender, so it needs the same consent and opt-out discipline as any company that texts its own customers.

Defending a franchise system against TCPA claims

If your company has been named in a TCPA suit over texts a franchisee sent, the case often depends on what your field staff and systems actually did for that campaign. Rosenberger + Kawabata represents businesses defending TCPA lawsuits and class actions through its business litigation practice, including claims involving franchisee marketing texts. Contact Rosenberger + Kawabata online for a free and confidential consultation, or call (310) 894-6921.

Sources

The statute is the Telephone Consumer Protection Act at 47 U.S.C. § 227. The FCC’s rules are at 47 C.F.R. § 64.1200, as published in the eCFR on July 1, 2025. The FCC’s vicarious-liability ruling is In re Joint Petition Filed by Dish Network, LLC, FCC 13-54, 28 FCC Rcd 6574 (2013).

The court decisions are McLaughlin Chiropractic Associates v. McKesson Corp., No. 23-1226 (U.S. June 20, 2025); Campbell-Ewald Co. v. Gomez, 577 U.S. 153 (2016); Dish Network, LLC v. FCC, 552 F. App’x 1 (D.C. Cir. 2014); Thomas v. Taco Bell Corp., 879 F. Supp. 2d 1079 (C.D. Cal. 2012), aff’d, 582 F. App’x 678 (9th Cir. 2014); Agne v. Papa John’s International, Inc., 286 F.R.D. 559 (W.D. Wash. 2012); Ramos v. Hopele of Fort Lauderdale, LLC, No. 0:17-cv-62100 (S.D. Fla. Aug. 16, 2018) (report and recommendation), adopted, 334 F. Supp. 3d 1262 (S.D. Fla. 2018); Jones v. Royal Administration Services, Inc., 887 F.3d 443 (9th Cir. 2018); Henderson v. United Student Aid Funds, Inc., 918 F.3d 1068 (9th Cir. 2019); Soliman v. Subway Franchisee Advertising Fund Trust, Ltd., 101 F.4th 176 (2d Cir. 2024); and Insurance Marketing Coalition Ltd. v. FCC, No. 24-10277 (11th Cir. Jan. 24, 2025).

This post is general information about the Telephone Consumer Protection Act and related laws as of July 1, 2025. It is not legal advice, and reading it does not create an attorney-client relationship. Courts and the FCC change the rules in this area often, and the outcome of any claim depends on its facts. Past results do not guarantee future outcomes.