May 30, 2025|Franchise Frontlines
May 30, 2025 | United States District Court for the Western District of Texas | Published Opinion
Executive Summary
In Martinez v. Freddy’s Frozen Custard, 2025 WL 2104596 (W.D. Tex. May 30, 2025), the United States District Court for the Western District of Texas granted summary judgment in favor of Freddy’s, LLC, the franchisor of a Freddy’s Frozen Custard & Steakburgers restaurant. The plaintiff alleged he fractured a tooth after biting into a foreign object in a hamburger purchased from a franchised location and sought to hold the franchisor liable for negligence, negligence per se, products liability, and gross negligence. The court concluded that Freddy’s owed no duty of care because it did not exercise actual or contractual control over the “means, methods, or details” of food preparation at the franchised restaurant. The court also held that Freddy’s was not in the “chain of distribution” of the allegedly defective food product and was therefore not liable under Texas products liability doctrine. After finding no evidence of duty, breach, causation, or statutory violation, the court granted summary judgment on all claims.
Relevant Background
According to the allegations, the plaintiff purchased a burger from a Freddy’s franchise location in San Antonio, returned to work, and after several bites encountered “something hard” that allegedly fractured his tooth. Martinez, 2025 WL 2104596, at *1. The plaintiff did not retain the object, could not identify what it was, and believed he may have swallowed it. He alleged that an unidentified foreign object had been present inside the hamburger meat supplied to the restaurant by K2d, Inc., a beef processor.
The restaurant where the incident occurred was owned and operated by South Texas Custard 3, Ltd., which had operated under a license agreement with Freddy’s since 2008. The agreement stated that South Texas “shall retain and exercise management and control over the Restaurant and its operations,” and that it must hold itself out as “independently owning the Restaurant.” Id. at *1–2 (quoting License Agreement §15.1). The agreement emphasized that the franchisee operated as an independent contractor and that “Licensor shall in no event assume liability for… any act or omission of Licensee.” Id. at *2.
Freddy’s did maintain a supplier-approval process for quality control and uniformity, and suppliers not already approved required written authorization. However, the agreement made clear that Freddy’s “is not responsible for supplying” products and that the franchisee was responsible for selecting suppliers from among those pre-approved. Id. at *2. Freddy’s Chief Development Officer explained that the franchisee could select from “two or three” approved beef suppliers, including K2d, and that Freddy’s did not own or control any of them. Id. at *2 (citing deposition testimony).
After originally filing suit in state court, the plaintiff later amended his petition to seek more than $1 million in damages. Freddy’s removed the action to federal court and moved for summary judgment, arguing it did not owe a duty because it neither controlled the supplier nor controlled day-to-day restaurant operations.
Decision
The court began its analysis by reiterating that negligence under Texas law requires proof of duty, breach, and proximate causation, and that “the threshold inquiry in a negligence case is duty.” Id. at *3 (citing Greater Hous. Transp. Co. v. Phillips, 801 S.W.2d 523, 525 (Tex. 1990)).
Addressing franchisor liability, the court articulated the Texas standard that vicarious liability applies only when the franchisor has the right to control “the details of that conduct” related to the injury-producing activity. Id. at *3 (citing State Farm Mut. Auto. Ins. Co. v. Traver, 980 S.W.2d 625, 627 (Tex. 1998)). The control must extend to the “specific activity from which the injury arose,” and to the “means, methods, or details of the franchisee’s work.” Id. (quoting JLB Builders, L.L.C. v. Hernandez, 622 S.W.3d 860, 865 (Tex. 2021)).
The court emphasized that Freddy’s did not contractually retain control over food preparation or beef selection. Instead, the license agreement expressly stated the franchisee “shall retain and exercise management and control over the Restaurant.” Martinez, 2025 WL 2104596, at *2 (emphasis added). The agreement further provided that Freddy’s “is not responsible for supplying” products and does not guarantee their availability. Id. The court explained this contractual independence weighed strongly against imposing a duty.
Turning to the evidence of actual control, the court emphasized that “Freddy’s did not control the day-to-day activities of the Restaurant,” citing deposition testimony. Id. The franchisee selected its own beef supplier, even when choosing from a franchisor-approved list, and Freddy’s “did not own or control any of the pre-approved suppliers.” Id. The court reasoned that such supplier lists serve the purpose of maintaining uniformity and quality control across the brand, not operational control over the “means, methods, or details” of the franchisee’s food handling. Id. at *4.
The court drew on a line of Texas precedent affirming that franchisors are not liable when they merely impose brand standards, reporting requirements, or uniformity obligations. It quoted Shell Oil Co. v. Khan, 138 S.W.3d 288 (Tex. 2004), for the proposition that the right to inspect or require compliance with certain policies “does not rise to a degree of control high enough to impute liability.” Martinez, 2025 WL 2104596, at *4. It cited Doe v. YUM! Brands, Inc., 639 S.W.3d 214 (Tex. App.—Houston 2021), for the principle that requirements regarding compliance with franchise rules “have been found insufficient to establish complete control.” Id. The court similarly invoked McNeel v. Kiddie Acad. Domestic Franchising, LLC, 2021 WL 920108 (S.D. Tex. Mar. 10, 2021), observing that “merely retaining… supervisory rights [does] not rise to a degree of control” sufficient for vicarious liability. Martinez, 2025 WL 2104596, at *4.
The plaintiff argued that Freddy’s retained “extensive control” over meat suppliers. The court rejected that framing, explaining that supplier approval processes are common within franchises and do not amount to control over the specific procurement or preparation activity that allegedly caused the injury. Id. The court distinguished Read v. Scott Fetzer Co., 990 S.W.2d 732 (Tex. 1998), which imposed a duty where a manufacturer required in-home demonstrations—the very act that created the risk. The court explained: “Read is inapposite here… Freddy’s did not retain or exercise sufficient control over the operative details of South Texas’s selection of beef suppliers or preparation.” Martinez, 2025 WL 2104596, at *4.
On breach and causation, the court noted the plaintiff had not identified “what Freddy’s should have done to satisfy its purported duty of care.” Id. at *5. The plaintiff admitted he could not identify the object, and the record lacked evidence suggesting any “red flags” regarding K2d or Freddy’s supplier approvals. Id. As the court explained, this left no basis to conclude that the franchisor’s conduct caused the injury, noting “it is impossible for Plaintiff to describe what Freddy’s could have done” because “he does not know how the hard object ended up in his lunch in the first place.” Id.
The court also rejected the negligence per se claim because plaintiff did not identify any statute that Freddy’s allegedly violated. Id. at *6.
Turning to products liability, the court held Freddy’s was not in the “chain of distribution.” In its key passage, the court quoted the Texas Supreme Court’s decision in Aluminum Co. of America v. Alm, 785 S.W.2d 137 (Tex. 1990): “Seven-Up was never in the chain of distribution and merely licensed [another entity] to bottle its product. At no time did Seven-Up exercise control over the instrumentality which caused the injury.” Martinez, 2025 WL 2104596, at *6 (quoting Alm, 785 S.W.2d at 140). The court concluded the same principle applied to Freddy’s: it “was never in the chain of distribution” of the beef product and could not be held liable under Texas product liability doctrines. Id. at *6.
Having found no duty, breach, or causation, and finding the plaintiff unable to establish an essential element of any claim, the court granted summary judgment in full.
Looking Forward
This opinion reinforces several important themes for franchisors and multi-unit brands. Courts continue to distinguish between brand standardization and operational control, recognizing that oversight related to quality, consistency, trademarks, and supplier approvals serves legitimate brand-management functions and does not constitute control over the day-to-day “means, methods, or details” of franchisee operations. When franchise agreements clearly articulate the independence of the franchisee and disclaim control over daily activities, courts evaluate claims of vicarious liability through a narrower lens, as they did here.
The court’s treatment of supplier approval underscores the importance of well-drafted provisions. Many franchisors maintain approved supplier lists or require franchisees to purchase certain branded items. This case demonstrates that those provisions, standing alone, typically do not create liability, particularly when franchisees remain responsible for implementing their own procurement processes. Maintaining clear documentation of the franchisor’s role—ensuring quality uniformity rather than dictating how suppliers operate—may help franchisors avoid similar claims.
The case also highlights the practical challenges plaintiffs face when attempting to attribute alleged injuries to franchisors. Without evidence establishing what caused the alleged harm and how the franchisor could have prevented it, courts are unlikely to impose a duty. For franchisors, this reinforces the value of clear communication of roles, robust independent contractor language, and consistent implementation of systems that leave operational details in the hands of franchisees.
Finally, the court’s rejection of product liability claims illustrates the importance of delineating the franchisor’s role in procurement and distribution. When franchisors do not participate in the chain of distribution and do not exercise control over the products at issue, courts generally decline to impose strict liability. By structuring relationships with suppliers and franchisees in ways that maintain this distinction, franchisors may reduce the risk of being drawn into product defect or contamination claims.
This article is based solely on the opinion of the Court in this matter. The author has not conducted any independent investigation into the facts. For the avoidance of doubt, each statement related to the law and facts in this article is drawn from the Court’s opinion in this case.
Thomas O’Connell is a Shareholder at Buchalter APC and Chair of the firm’s Franchise Practice Group. For questions about this article or media inquiries, you can contact Tom at toconnell@buchalter.com.
This communication is not intended to create, and does not create, an attorney-client relationship or any other legal relationship. No statement herein constitutes legal advice, nor should it be relied upon or interpreted as such. This communication is for general informational purposes only and is not a substitute for legal counsel. Readers should not act or refrain from acting based on any information provided without seeking appropriate legal advice specific to their situation. For more information, visit www.buchalter.com.
