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Termination by act of the parties lapse of time

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Termination by Act of the Parties Lapse of Time Purpose Achieved Occurrence of a Specific Event Mutual Agreement Termination by One Party Notice of Termination  Termination by Operation of Law Death or Insanity of either Principal or Agent; automatic Impossibility (subject matter lost or destroyed Changed Circumstances Bankruptcy War Sole Proprietorships and Franchises What are the advantages and disadvantages of sole proprietorships? Major Disadvantage-  the owner is personally liable for all losses or liabilities incurred  by the business enterprise Garden City Boxing Club, Inc v. Dominguez (2006) Ex. Snacks Fifth Avenue- lost everything when they went to court for copyright  infringement  Advantages: The owner is in complete control and receives all profits Flexibility
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Ease of creation; maintenance What is a franchise? Franchise-  Agreement that allows Franchisor  (owner of trademark, trade name or  copyright) to license to Franchisee  the trade mark, trade name or copyright in the sale of  goods or services What are the different types of franchises? Distributorship Chain Style Business Operation Manufacturing or Processing Arrangement What are the laws governing franchises? Primarily governed by contract law UCC Article 2 governs franchises for sales of goods Federal Regulation of Franchises Industry-Specific Standards:  protect franchisee from unreasonable demands and bad  faith termination The FTC Franchise Rule:  disclosures State Protection for Franchisees. Protection from unfair trade practices and bad faith terminations. Disclosure documentation (Franchise Disclosure Document), including costs of  operation, recurring expenses, profits earned, and substantiating of these figures. State law may prohibit termination without “good cause.” What are the various issues that are covered in a franchise contract? The Franchise Contract includes: Payment for the Franchise:  lump sum, initial fee Business Premises:  leased of purchased
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Location of the Franchise Quality Control by Franchisor good will, reputation and trademark value.  Courts will not question Franchisor’s strict  supervision but Franchisor may be liable for torts of agents. Pricing Arrangements:   franchisor cannot set prices of goods sold How is a franchise terminated? - Generally franchise agreements are more favorable towards the franchisor.  - In the event of breach, franchisee may have the opportunity to “cure” an ordinary  breach within a period of time to prevent termination Wrongful Termination. Importance of Good Faith
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Termination by Act of the Parties Lapse of Time Purpose...

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