A federal court found Jani-King of Oklahoma controlled accounts, pay, and schedules so tightly that its cleaning franchisees count as employees under federal wage law.
A federal judge in Oklahoma has ruled that franchisees of Jani-King of Oklahoma, a regional franchisor of commercial cleaning businesses, are employees under the Fair Labor Standards Act. The September 21 decision granted summary judgment to the U.S. Department of Labor, which accused the franchisor of misclassifying owners as independent contractors and skipping employer recordkeeping.
The court applied the Tenth Circuit's six-factor economic reality test and found the factors pointed toward employment. Jani-King of Oklahoma controlled who entered and left the system, which customer accounts each owner received or lost, cleaning schedules, service standards, and how and what owners were paid. Franchisees were also barred from serving customers outside the Jani-King network.
Franchisees had no direct contracts with the customers they cleaned for, so the court said they could not meaningfully influence their own profit or loss. The judge called their ability to invest in the business illusory, cited exclusive 10 to 20 year terms as evidence of permanence, and noted that commercial cleaning requires no specialized skill. Cleaning was also the franchisor's core business, not a side function.
The ruling targets a specific structure: the franchisor sells the contract, assigns the account, bills the customer, and pays the franchisee. Janitorial, staffing, and other account-distribution models share that design and carry the same exposure. Franchisors should map where they control customer relationships and payment flow, because those two levers carried the most weight here.
Federal policy has been moving toward narrower joint employer standards, but this case shows the Labor Department will still litigate misclassification when franchisor control runs deep. For multi-unit operators evaluating service franchises, the first diligence question is simple: who owns the customer?
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