Neff v. American Dairy Queen Corp.

United States Court of Appeals,

Fifth Circuit.

No. 94-50552.

Margo NEFF, for herself and those similarly situated, Plaintiff-
Appellant,

v.

AMERICAN DAIRY QUEEN CORPORATION, Defendant-Appellee.

July 20, 1995.

Appeal from the United States District Court for the Western
District of Texas.

Before REAVLEY, GARWOOD and EMILIO M. GARZA, Circuit Judges.

EMILIO M. GARZA, Circuit Judge:

Margo Neff appeals from the district court's entry of summary

judgment on her claims against American Dairy Queen Corporation

("ADQ") under the Americans with Disabilities Act, 42 U.S.C. §§

12101-12213 (West Supp.1995) ("ADA"). We affirm.

I

ADQ owns the federally registered "Dairy Queen" trade name and

various trademarks and service marks used in connection with the

operation of licensed Dairy Queen stores. ADQ, through franchise

agreements with franchisees throughout the United States, licenses

franchisees to establish and operate Dairy Queen retail stores.

Among those franchisees is R & S Dairy Queens, Inc., a Texas

corporation that owns two Dairy Queen stores in San Antonio, one

located at 13122 Nacogdoches (the "Nacogdoches Store"), and the

other located at 9726 Perrin Beitel (the "Perrin Beitel Store")

(collectively, the "San Antonio Stores").

1
 Margo Neff is disabled and requires a wheelchair to gain

mobility. Neff filed suit under section 308 of the ADA, 42 U.S.C.

§ 12188(a) (1988), alleging that ADQ had violated section 302 of

the ADA, 42 U.S.C. § 12182, by failing to make the San Antonio

Stores accessible to her.1 In her complaint, Neff pointed to

numerous barriers that she alleged made the San Antonio Stores

inaccessible to the disabled. Neff sought an injunction requiring

ADQ to modify "its"2 San Antonio Stores to eliminate the alleged

barriers, a declaratory judgment concerning ADQ's violation of the

ADA, and attorneys' fees.3

ADQ moved for summary judgment on the grounds that it did not

own, lease, or operate the San Antonio Stores and therefore was not

responsible for removing the alleged barriers. Its summary

judgment pleadings included an affidavit by ADQ's Vice President

for Franchise Operations stating that ADQ neither owned nor

1
Section 302(a) provides that "[n]o individual shall be
discriminated against on the basis of disability in the full and
equal enjoyment of the goods, services, facilities, privileges,
advantages, or accommodations of any place of public
accommodation by any person who owns, leases (or leases to), or
operates a place of public accommodation." 42 U.S.C. § 12182(a).
Section 302(b)(2)(A)(iv) further provides that such
discrimination includes the "failure to remove architectural
barriers, and communication barriers that are structural in
nature, in existing facilities, ... where such removal is readily
achievable." 42 U.S.C. § 12182(b)(2)(A)(iv).
2
In her complaint, Neff alleged that ADQ "owns" the San
Antonio Stores.
3
Neff also sought certification of a class of disabled
consumers who were unable to access the San Antonio Stores. Neff
later filed a motion for class certification, which the district
court denied as moot when it granted ADQ's motion for summary
judgment. Neff makes no argument regarding class certification
on appeal.

2
operated the San Antonio Stores. ADQ also offered copies of the

franchise agreements between ADQ and R & S Dairy Queens relating to

the San Antonio Stores. According to ADQ, the agreements

established as a matter of law that it did not "operate" the stores

within the meaning of section 302.

In response, Neff contended that the terms of the franchise

agreement between ADQ and R & S Dairy Queens regarding the

Nacogdoches Store supported her claim that ADQ retained sufficient

control over the operation of the San Antonio Stores to make it an

"operator" of the stores for the purposes of section 302.

The district court granted summary judgment, see Neff v.

American Dairy Queen, Inc., 879 F.Supp. 57 (W.D.Tex.1994),

concluding that the Nacogdoches Store franchise agreement

established no more than that ADQ held the power to veto

modifications to the store's facilities, and that this amount of

control was insufficient to bring ADQ within the scope of section

302. Neff appeals from the district court's entry of summary

judgment, contending that the existence of genuine issues of

material fact regarding whether ADQ "operates" the San Antonio

Stores should have precluded summary judgment on her ADA claims.4

II

We review a district court's grant of summary judgment de

novo, applying the same standard as did the district court.

4
The United States has filed an amicus curiae brief
supporting Neff's position, and the International Franchise
Association has filed an amicus curiae brief supporting ADQ's
position.

3
McDaniel v. Anheuser-Busch, Inc., 987 F.2d 298, 301 (5th Cir.1993).

We "review the facts drawing all inferences most favorable to the

party opposing the motion." Reid v. State Farm Mut. Auto. Ins.

Co., 784 F.2d 577, 578 (5th Cir.1986). Summary judgment is

appropriate when the summary judgment record demonstrates "that

there is no genuine issue as to any material fact and that the

moving party is entitled to a judgment as a matter of law."

Fed.R.Civ.P. 56(c); accord Anderson v. Liberty Lobby, Inc., 477

U.S. 242, 247-48, 106 S.Ct. 2505, 2509-10, 91 L.Ed.2d 202 (1986);

Fraire v. City of Arlington, 957 F.2d 1268, 1273 (5th Cir.1992),

cert. denied, --- U.S. ----, 113 S.Ct. 462, 121 L.Ed.2d 371 (1992).

"If the moving party meets the initial burden of showing that there

is no genuine issue of material fact, the burden shifts to the

non-moving party to produce evidence or designate specific facts

showing the existence of a genuine issue for trial." Engstrom v.

First Nat'l Bank, 47 F.3d 1459, 1462 (5th Cir.1995), petition for

cert. filed, 63 U.S.L.W. 3892 (U.S. June 12, 1995) (No. 94-2025).

A

Neff argues that summary judgment was inappropriate in this

case because genuine issues of material fact exist regarding ADQ's

control over the restaurants in question. This argument raises the

question of whether the issue that Neff and ADQ dispute is one of

fact or one of law.5 The only issue in dispute between the parties

is whether ADQ's contractual rights under the Nacogdoches Store

5
The United States specifically argues that the question is
one of fact.

4
franchise agreement demonstrate that ADQ "operates" the San Antonio

Stores. Neff's only summary judgment evidence, and the only basis

for her claim that ADQ "operates" the San Antonio Stores, is the

Nacogdoches Store franchise agreement, and "[t]he interpretation of

an unambiguous contract is a question of law" which we review de

novo. Exxon Corp. v. Crosby-Mississippi Resources, Ltd., 40 F.3d

1474, 1481 (5th Cir.1995). Neff has not alleged that the

Nacogdoches Store franchise agreement is ambiguous. Indeed, the

parties do not dispute the meaning of the terms of the agreement at

all; rather, they dispute whether the control provided for in the

agreement makes ADQ an "operator" of the store for the purposes of

section 302, again a question of law which we review de novo. See

Matagorda County v. Russell Law, 19 F.3d 215, 217 (5th Cir.1994)

("We review the district court's legal decisions, including the

proper interpretation of a statute, de novo."). Consequently, we

hold that because the disputed issue in this case is purely legal,

it was appropriately resolved through summary judgment.6

6
In support of her argument that the existence of genuine
issues of material fact should have precluded the district court
from rendering summary judgment, Neff cites Drexel v. Union
Prescription Centers, Inc., 582 F.2d 781 (3d Cir.1978). In
Drexel, the Third Circuit applied the Rule 56(c) summary judgment
standard to an issue of state agency law that involved an
interpretation of a franchise agreement. A wrongful death
plaintiff contended that the franchisor exercised sufficient
control over the franchisee retail store such that it "operated"
the store, thus rendering the franchisor potentially liable for
the torts of its franchisee. The court treated the question of
whether the franchise agreement created an agency relationship as
one of fact and interpreted the agreement in the light most
favorable to the nonmovant. See id. at 788-89. Although the
court's reasoning is not entirely clear, the court did hold that
the franchise agreement was ambiguous, id. at 788, raising the
factual issue of what the parties intended it to mean, id. In

5
 B

Neff's appeal thus presents a narrowly defined issue of first

impression: whether a franchisor with limited control over a

franchisee's store "operates a place of public accommodation"

within the meaning of section 302(a).7 Section 302(a) provides in

pertinent part that "[n]o individual shall be discriminated against

on the basis of disability in the full and equal enjoyment of ...

[the] facilities ... or accommodations of any place of public

accommodation by any person who owns, leases (or leases to),[8] or

operates a place of public accommodation." (emphasis added).

Because the ADA does not define the term "operates," we "construe

it in accord with its ordinary and natural meaning." Smith v.

United States, --- U.S. ----, 113 S.Ct. 2050, 2054, 124 L.Ed.2d 138

(1993); see also Perrin v. United States, 444 U.S. 37, 42, 100

S.Ct. 311, 314, 62 L.Ed.2d 199 (1979) ("A fundamental canon of

statutory construction is that, unless otherwise defined, words

will be interpreted as taking their ordinary, contemporary, common

any event, to the extent that Drexel is inconsistent with our
holding in this case, we decline to follow its reasoning.

Neff also cites two state cases in support of her
argument that material facts precluded summary judgment:
Singleton v. International Dairy Queen, Inc., 332 A.2d 160
(Del.Super.Ct.1975), and American Dairy Queen Corp. v.
Taxation & Revenue Department, 93 N.M. 743, 605 P.2d 251
(Ct.App.1979). Neither case relates to ADA liability or
applies the federal standard for summary judgment, however,
and we decline to follow them.
7
The parties do not dispute that the San Antonio Stores are
places of public accommodation.
8
The parties agree that ADQ does not own the premises in
question or lease them to R & S Dairy Queens.

6
meaning."). To "operate," in the context of a business operation,

means "to put or keep in operation," The Random House College

Dictionary 931 (Rev. ed. 1980), "[t]o control or direct the

functioning of," Webster's II: New Riverside University Dictionary

823 (1988), "[t]o conduct the affairs of; manage," The American

Heritage Dictionary 1268 (3d ed. 1992).

Neff argues that the terms of the Nacogdoches Store Franchise

Agreement demonstrate that ADQ exercises sufficient control over

the San Antonio Stores to bring ADQ within the scope of section

302. We hold that the relevant inquiry in a case such as this one

is whether ADQ specifically controls the modification of the

franchises to improve their accessibility to the disabled. Cf.

Carparts Distribution Center, Inc. v. Automotive Wholesalers'

Ass'n, 37 F.3d 12, 16-18 (1st Cir.1994) (interpreting "employer" as

used in Title I of ADA by looking to defendant's control over

allegedly discriminatory denial of employee benefits). Although we

have found no circuit court of appeals case law interpreting the

scope of "operates" as used in § 302 of the ADA, the existing

district court authority is consistent with our approach. All

three district courts that have addressed the question of ADQ's

liability for allegedly discriminatory conditions at franchisee

stores have concluded that ADQ does not "operate" the stores for

the purposes of § 302, and all three looked to ADQ's authority over

structural modifications to the franchisee stores in reaching their

conclusions. See Young v. American Dairy Queen, Inc., 1994 WL

761233, *2 (N.D.Tex.1994); Neff v. American Dairy Queen, Inc., 879

7
F.Supp. 57, 60 (W.D.Tex.1994); Alonzo v. Bayside Restaurant Co.,

C.A. No. C-94-103, slip op. at 4 (S.D.Tex.1994).9

Neff and the United States point to numerous non-structural

aspects of the San Antonio Stores' operations that they contend ADQ

controls, such as accounting, personnel uniforms, use of

trademarks, etc. While ADQ's control over these aspects may be

relevant in other contexts, we hold that because it does not relate

to the allegedly discriminatory conditions at the San Antonio

Stores, it does not bear on the question of whether ADQ "operates"

the franchises for the purposes of the ADA's prohibition on

discrimination in public accommodations. Instead, the relevant

question in this case is whether ADQ, according to the terms of its

franchise agreements with R & S Dairy Queens, controls modification

of the San Antonio Stores to cause them to comply with the ADA.

Neff points to the following language in the Nacogdoches Store

franchise agreement to support her position that ADQ controls the

9
In addition, two district courts have interpreted
"operates" in the context of hospital operations consistently
with our approach to the question in the context of franchise
store operations. In Howe v. Hull, 873 F.Supp. 72 (N.D.Ohio
1994), the court held that a physician "operated" a hospital
because he exercised sole discretion over the allegedly
discriminatory decision not to admit a patient with AIDS. The
court specifically focused on the physician's authority over the
allegedly discriminatory act. Id. at 77-78. In Aikins v. St.
Helena Hosp., 843 F.Supp. 1329 (N.D.Cal.1994), the court held
that a physician who worked at a hospital as an independent
contractor did not "operate" the hospital in question. The
plaintiff in Aikins, the deaf wife of an emergency room patient,
complained that the hospital had discriminated against her by
failing to provide her with an interpreter. The court held that
the physician defendant did not "operate" the hospital because,
as an independent contractor, he exercised no authority over the
hospital's policy on the use of interpreters. Id. at 1335.

8
San Antonio stores:10

B. Company makes available to its licensees a system to
establish, equip and operate a retail store facility as part
of the "Dairy Queen" system using distinctive, uniform and
approved designs, equipment, supplies ... which Licensee
desires to adopt and use to operate a "Dairy Queen" retail
store ... in accordance with this Agreement and the system
standards and requirements established and periodically
revised by the Company....

5.1 The retail Store shall be constructed and equipped in
accordance with Company's approved specifications and
standards in effect at the time pertaining to design and
layout of the building, and as to equipment, inventory,
signage, fixtures, location and design and accessory features.
Licensee shall not commence construction of the Store until he
has received the written consent of Company to his building
plans.

5.2 Any replacement, reconstruction, addition or modification
in building, interior or exterior decor or image, equipment or
signage, to be made after Company's consent is granted for
initial plans, whether at the request of Licensee or of
Company, shall be made in accordance with written
specifications which have received the prior written consent
of Company, which shall not be unreasonably withheld.

5.3 The building, equipment and signage employed in the
conduct of Licensee's business shall be maintained in
accordance with requirements established periodically by
Company, or reasonable, specific lists prepared by Company
based upon periodic inspections of the premises by Company's
representatives. Within a period of ninety (90) days after
the receipt of any particular maintenance list, Licensee shall
effect the items of maintenance designated therein including
the repair of defective items and/or the replacement of
unrepairable or obsolete items of equipment and signage.
Routine maintenance shall be conducted in accordance with
general schedules published by Company.

6.7 Licensee shall adopt and use as his continuing operational
routine the standard "Dairy Queen" management system, as

10
Neff has not identified, either below or on appeal, any
language in the Perrin Beitel Store franchise agreement to
support her claim that ADQ "operates" the Perrin Beitel Store.
The Perrin Beitel Store franchise agreement is more limited in
scope than the Nacogdoches Store agreement, and it contains none
of the provisions to which Neff points in support of her argument
regarding ADQ's control over the Nacogdoches Store.

9
 prescribed in the Store Management Operations Manual,
including Company's standards with respect to product
preparation, merchandising, employee training, equipment and
facility maintenance and sanitation. Company will revise the
Manual and these programs periodically to meet changing
conditions of retail operation in the best interest of "Dairy
Queen" retail stores.....

Record on Appeal, vol. 1, at 183-86. However, we agree with the

district court that this language does not establish sufficient

control on ADQ's part such that ADQ can be said to "operate" the

San Antonio stores. Paragraph B is simply a general statement

regarding the purpose of the agreement, and even it makes clear

that R & S Dairy Queen, not ADQ, will "operate" the store.

Paragraph 5.1 provides for the greatest level of control over the

accessibility of the Nacogdoches Store to the disabled, but it

relates to the construction of the store, and it is undisputed that

the Nacogdoches store was constructed and equipped before the ADA

was enacted. Consequently, even if ADQ "operated" the store with

respect to its construction, such operation is irrelevant because

the issue in Neff's case is whether ADQ "operates" the San Antonio

Stores with respect to the removal of existing architectural

barriers. In addition, ADQ's pre-ADA control over the San Antonio

Stores cannot form the basis of Neff's discrimination claim because

the ADA is not to be given retroactive effect. See Burfield v.

Brown, Moore & Flint, Inc., 51 F.3d 583, 588 (5th Cir.1995)

(holding that employment discrimination claim was barred because

"[t]he ADA is not retroactive and it does not apply to actions

allegedly taken prior to the effective date of the Act").

Paragraph 5.2, the only paragraph that relates to

10
modifications to the structure of the Nacogdoches Store, simply

provides that ADQ may disapprove any proposed modifications to the

Nacogdoches Store building and equipment. While this does amount

to a limited form of control over structural modifications, we

agree with the district court that this right, which is essentially

negative in character, cannot support a holding that ADQ "operates"

the Nacogdoches Store with respect to its removal of architectural

barriers to the disabled. We note that Neff has not alleged or

offered any summary judgment evidence to show that ADQ has withheld

its consent to proposed modifications to the Nacogdoches Store

designed to bring it into compliance with the ADA.

In its brief, Neff specifically emphasizes paragraphs 5.3 and

6.7. Paragraph 5.3 refers to building and equipment maintenance

and not the modification of the store structure or removal of

architectural barriers. ADQ's control in this regard, while more

relevant than its control over employee uniforms, accounting

standards, etc., is not directly relevant to the Neff's suit.

Neff's complaint is not based on R & S's failure to perform

maintenance on the Nacogdoches Store building or equipment;

rather, she complains of the equipment itself. Further, while

Paragraph 5.3 does provide that such maintenance must be conducted

in accordance with ADQ-established maintenance lists, Neff has not

alleged, or offered any summary judgment evidence to show, that

these lists prevent R & S from modifying the Nacogdoches Store to

bring it into compliance with the ADA.

Paragraph 6.7 states that R & S must adhere to the routine

11
prescribed by ADQ's "Store Management Operations Manual," through

which ADQ sets standards for "product preparation, merchandising,

employee training, equipment and facility maintenance and

sanitation." The effect of this provision is similar in kind to

the effect of Paragraph 5.3. It does not relate to the

modification of the physical structure or accessibility of the

Nacogdoches Store, and Neff has not alleged or offered summary

judgment to show that the Store Management Operations Manual

prevents R & S Dairy Queens from making such modifications.11

In sum, while the terms of the Nacogdoches Store franchise

agreement demonstrate that ADQ retains the right to set standards

for building and equipment maintenance and to "veto" proposed

structural changes, we hold that this supervisory authority,

without more, is insufficient to support a holding that ADQ

"operates," in the ordinary and natural meaning of that term, the

Nacogdoches Store.12

11
At oral argument, Neff also pointed to paragraphs 11.1 and
11.2 of the agreement, which allow ADQ to terminate the agreement
in case of breach. The right to terminate, however, does not
grant ADQ additional control over the modification of the
Nacogdoches Store to increase its accessibility to the disabled
beyond ADQ's underlying contractual rights with respect to such
modifications.
12
We note that a recent Second Circuit case may suggest a
disagreement with our reasoning. In Staron v. McDonald's Corp.,
51 F.3d 353 (2d Cir.1995), the court addressed the question of
whether a ban on smoking was a "reasonable accommodation"
required by the ADA. See 42 U.S.C. § 12182(b)(2)(A)(ii). In
that case, the plaintiffs sued McDonald's Corporation and Burger
King Corporation alleging that the two corporations' policies of
permitting smoking in "their" restaurants violated the ADA. The
plaintiffs sought an injunction requiring the defendants to
"establish a policy of prohibiting smoking in all of the
facilities they own, lease or operate." Staron, 51 F.3d at 355.

12
 Because Neff rested her claim that ADQ "operates" the San

Antonio stores exclusively on the terms of the Nacogdoches Store

franchise agreement, and did not allege that ADQ has prevented R &

S Dairy Queens from complying with the ADA, either as a practical

matter or by exercising its rights under its franchise agreements,13

we hold that ADQ met its burden under Rule 56(c) in its motion for

summary judgment. ADQ established the absence of a genuine issue

of material fact and further that it was entitled to judgment as a

matter of law based on the terms of its franchise agreements with

R & S Dairy Queens. Because Neff offered no summary judgment

evidence other than the Nacogdoches Store franchise agreement in

response to ADQ's motion, we further hold that Neff's summary

judgment evidence was insufficient to raise a genuine issue for

In its opinion, the Second Circuit alludes to an earlier
disposition of a motion by McDonald's Corporation:

On the same day that the district court granted the
motions to dismiss, McDonald's announced a new policy
prohibiting smoking in all of its corporate
owned-and-operated restaurants. The smoking ban did
not extend to its franchised restaurants. McDonald's
then submitted a motion to this court to dismiss
plaintiffs' appeal as moot. This court denied the
motion on June 21, 1994.

Id. However, the court did not state on what grounds
McDonald's policy change did not render the case moot, and
the court's opinion contains no further discussion regarding
the propriety of holding McDonald's responsible for the
smoking policy at the franchisee restaurants.
13
As we noted above, Neff does not contend that ADQ has
prevented R & S Dairy Queens from removing architectural barriers
by refusing to approve modifications to the restaurants or
promulgating a policy preventing such modifications. Indeed, ADQ
offered numerous exhibits documenting its efforts to encourage
franchisees to comply with the ADA.

13
trial.

Neff and the United States argue that to exclude ADQ from the

scope of section 302(a) would be inconsistent with the canon of

construction requiring courts to interpret civil rights statutes

liberally to effectuate their remedial purposes. See, e.g., Gates

v. Collier, 616 F.2d 1268, 1275 (5th Cir.1980) (liberally

interpreting Civil Rights Attorneys' Fee Awards Act), rehearing

granted in part on other grounds, 636 F.2d 942 (5th Cir.1981);

United States v. DeRosier, 473 F.2d 749, 751 (5th Cir.1973)

(liberally interpreting Civil Rights Act of 1964). Even assuming

the canon applies in this context, we hold that Neff's

interpretation of the term "operates" would require more than just

a liberal construction of that term. Neff's argument in this case

would require us to bend "operates" too far beyond its natural

meaning for us to rely on the canon of statutory interpretation

requiring that we interpret civil rights legislation liberally.14

Furthermore, we fail to see how our interpretation of

"operates" to exclude ADQ under the circumstances involved in this

case will interfere with the remedial purposes of the ADA.

Assuming conditions at the San Antonio stores do not comply with

the ADA, it is Neff's decision not to sue the owner and operator of

those stores, R & S Dairy Queens, that will prevent her from

14
Cf. EEOC v. AIC Security Investigations, Ltd., 55 F.3d
1276, 1281-82 (7th Cir.1995) ("We do not doubt that the
employment discrimination statutes have broad remedial purposes
and should be interpreted liberally, but that cannot trump the
narrow, focused conclusion we draw from the structure and logic
of the statute. A liberal construction does not mean one that
flies in the face of the structure of the statute.").

14
obtaining the injunction she seeks.15

Neff also argues that because "a franchisor is held

responsible under the Civil Rights Act, a franchisor is held

responsible under the ADA." This argument fails on several levels.

First, it depends on Neff's premise that "the Title III [of the

ADA] rights and remedies are the same as those rights and remedies

available under the Civil Rights Act of 1964." However, the

statutory provision Neff cites for this proposition states only

that the remedies available under the ADA shall be the same as the

15
Because Neff seeks only injunctive relief, it is curious
why Neff elected to name ADQ rather than R & S Dairy Queens, the
more logical defendant to an ADA suit over the accessibility of
the San Antonio Stores. However, the answer may lie in §§
302(b)(2)(A)(iv) and 301(9)(C) of the ADA, 42 U.S.C. §§
12182(b)(2)(A)(iv), 12181(9)(C). Section 302(b)(2)(A)(iv)
defines discrimination in public accommodations to include "a
failure to remove architectural barriers, and communication
barriers that are structural in nature, in existing facilities,
... where such removal is readily achievable." 42 U.S.C. §
12182(b)(2)(A)(iv). Section 301(9)(C), in turn, defines "readily
achievable" as follows:

The term "readily achievable" means easily
accomplishable and able to be carried out without much
difficulty or expense. In determining whether an
action is readily achievable, factors to be considered
include—

(B) the overall financial resources of the covered
entity....

42 U.S.C. § 12181(9)(C). Consequently, the scope of the
injunctive relief available to Neff if she proves a
violation of the ADA will depend in part on the financial
strength of the defendant against which she proceeds.

Still, while our holding excluding ADQ from the scope
of § 302 with respect to the San Antonio Stores may limit
the actual relief available to Neff, it will not hurt her
ability to compel R & S Dairy Queens to make "readily
available" structural changes to the San Antonio stores.

15
remedies available under the Civil Rights Act. See 42 U.S.C. §

12188(a)(1). Second, because the Civil Rights Act does not define

the scope of defendants who may potentially be liable with

reference to who "operates" a public accommodation, Civil Rights

Act cases are unlikely to be informative on the meaning of that

term. Third, the two cases on which Neff relies to argue that

franchisors "are liable" under the Civil Rights Act, Wheeler v.

Hurdman, 825 F.2d 257 (10th Cir.1987), cert. denied, 484 U.S. 986,

108 S.Ct. 503, 98 L.Ed.2d 501 (1987), and Bradley v. Pizzaco, 7

F.3d 795 (8th Cir.1993), are factually distinguishable.16

III

For the foregoing reasons, we AFFIRM the district court's

order granting ADQ's motion for summary judgment.

16
In Wheeler, the Tenth Circuit held that a general partner
was not an "employee" within the meaning of Title VII, the ADEA,
and the Equal Pay Act. id. at 277 ("For the reasons stated
above, we hold that bona fide general partners are not employees
under the Anti-Discrimination Acts."). The only issue before the
court in Bradley was whether the defendants had established a
business justification defense for enforcing an allegedly
discriminatory "no beard" policy. One of the defendants was a
franchisor, Domino's Pizza, Inc., but the court did not address
the basis for Domino's liability under Title VII. However, the
court's recitation of the facts demonstrates that the allegedly
discriminatory "no beard" policy was "established nationwide by
[the] franchisor, Domino's Pizza, Inc.," id. at 796, and thus was
a direct result of an affirmative act by the franchisor.

16