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1. How Does The Duty To Support Arise? The Franchise Agreement • Franchises are a contractual relationship • Types and levels of support are generally determined by the language of the contract • Can include training, opening assistance, operations manual, communications, meetings and individual and local marketing. • Don’t t contractually promise what you don’t t intend on delivering.
1. How Does The Duty To Support Arise? The Duty of Good Faith and Fair Dealing • The duty arises both under statute and in common law. The statute simply codifies the common law and provides for a statutory cause of action. • The duty does not “create new, unbargained-for rights and obligations” or alter the express terms of the franchise agreement. • However, the franchisor must perform and enforce the agreement in good faith and with due regard to the interests of the franchisees and reasonable commercial standards.
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- Page 15 and 16: 2. The Case Law Khagen Investments
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1. How Does The Duty To Support Arise?<br />
The Duty of Good Faith and Fair Dealing<br />
• The duty arises both under statute and in common<br />
law. The statute simply codifies the common law and<br />
provides for a statutory cause of action.<br />
• The duty does not “create new, unbargained-for<br />
rights and obligations” or alter the express terms of<br />
the franchise agreement.<br />
• However, the franchisor must perform and enforce<br />
the agreement in good faith and with due regard to<br />
the interests of the franchisees and reasonable<br />
commercial standards.
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