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0538452803_269410 - factors should the court consider How...

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BLTC-9e Sample Answer for End-of-Chapter Hypothetical Question with Sample Answer Chapter 31: Sole Proprietorships and Private Franchises 31–2 Hypothetical Question with Sample Answer Omega Computers, Inc., is a franchisor that grants exclusive physical territories to its franchisees with retail locations, including Pete’s Digital Products. Omega sells more than two hundred of the franchises before establishing an interactive Web site. On the site, a customer can order Omega’s products directly from the franchisor. When Pete’s sets up a Web site through which a customer can also order Omega’s products, Omega and Pete’s file suits against each other, alleging that each is in violation of the franchise relationship. To decide this issue, what
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Unformatted text preview: factors should the court consider? How might these parties have avoided this conflict? Discuss. Sample Answer: The court would likely consider the terms of any contracts between the parties and whether or not the parties were acting in good faith. One way to avoid con-flicts such as those described in this problem is to institute a Web site in con-junction with a franchisor’s franchisees. When a Web site directs interested parties to a franchisee, for example, all parties would seem to benefit. Because territorial conflicts can occur not only between a franchisor and its franchisees but also between competing franchisees, some companies have instituted spe-cific “no compete” pledges....
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