Last October, the U.S. District Court inHartford, Conn., upheld a jury verdict in which,for the first time in U.S. history, an insurancecompany was held to be a “franchisor”and its agents were held tobe “franchisees” under a statefranchise statute. Chart v.Nationwide Insurance Co.,(affirming a $2.3 million judgmentin favor of an agent forunlawful termination in violationof the ConnecticutFranchise Act (CFA),with $750,000 inattorney fees).
Insurance companiesusually do notqualify as franchisors,but Nationwide did sobecause the CFA containsonly two of thethree statutoryrequirements normally needed to find theexistence of a franchise. At least nine otherdecisions across the country held an insurancecompany/agent relationship was not afranchise — reasonably so under state franchisestatutes.
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