ESM4231 - Particular occupations: milk roundsmen - franchise agreements

Roundsmen can be regarded as self-employed where they enter into agreements which allow for a genuine transfer of business from the dairy to themselves. Such agreements are likely to make the roundsmen

• responsible for meeting the costs of purchases
• entitled to the proceeds of resale
• give a security deposit to the dairy
• purchase goodwill from the dairy. (If the agreement is terminated they might well have to sell the goodwill back to the dairy at a price which takes into account any increase or decrease of business on the round.)
• purchase the right to the outstanding debts on the round
• provide the means of delivery. (This can be either with a vehicle he owns or has leased under a commercial leasing agreement from the dairy.)
• meet expenses of storage, maintenance, fuel etc
• provide cover for holiday periods.

Not all of these factors need to be present in any one case but the overall balance should show the roundsman is clearly in a position to profit from the sound management of his task and lose from its unsound management.

The agreement may well show that the dairy retains a right of control over what the roundsmen do, where they do it and to some extent how they do it. For example, they may have to buy milk and other dairy products from the one dairy, or they may have to keep records in a form prescribed by the dairy. However, a right of control is not sufficient on its own to create a contract of employment and is unlikely to carry much weight where other factors such as those shown above are present.