Book Title
10th Edition
ISBN: 9781337605656
Author: CROSS
Publisher: CENGAGE L
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Question
Chapter 16, Problem 1RE
Summary Introduction
Case summary:The person C signed a franchise agreement with company L, a fast food chain. The agreement binds C to follow the rules given in L’s operating manual. In case of non- compliance with L’s operating manual, the contract will stand terminated. After nine months, fire broke out in the restaurant of C due to which the kitchen was severely damaged. There was no mistake on the part of C but L notified that the franchise would terminate within 30 days due to the non-compliance of safety procedures.
To find: The form of Franchise agreement undersigned in the above case.
Expert Solution & Answer
Explanation of Solution
In the given case, the company L was a chain styled business franchise. In a chain-styled business franchise, the parent company operates and manages all the business while the franchisee who undersigns to become a member of franchisor’s business had to follow certain standardized set of rules instructed by the franchisor. Also, material and supplies to be used should be acquired solely from franchisor.
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