Kawasaki Motors Corporation (Kawasaki), a Japanese corporation, manufactures motorcycles that it distributes in the United States through its subsidiary, Kawasaki Motors Corporation, U. S. A. (Kawasaki USA). Kawasaki USA is a franchisor that grants franchises to dealerships to sell Kawasaki motorcycles. Kawasaki USA granted the Kawasaki Shop of Aurora, Inc. (Dealer), a franchise to sell Kawasaki motorcycles in Aurora, Illinois. The franchise changed locations twice. Both moves were within the five- mile exclusive territory granted Dealer in the franchise agreement.
Dealer did not obtain Kawasaki USA’s written approval for either move, as required by the franchise agreement. Kawasaki USA acquiesced to the first move but not the second. At the second new location, Dealer also operated Honda and Suzuki motorcycle franchises and was negotiating to operate a Yamaha franchise. The Kawasaki franchise agreement expressly permitted multiline dealerships. Kawasaki USA objected to the second move, asserting that Dealer had not received written approval for the move, as required by the franchise agreement. Evidence showed, however, that the real reason Kawasaki objected to the move was because it did not want its motorcycles to be sold at the same location as other manufacturers’ motorcycles. Kawasaki terminated Dealer’s franchise. Dealer sued Kawasaki USA for wrongful termination. Who wins? Kawasaki Shop of Aurora, Inc. v. Kawasaki Motors Corporation, U. S. A., 544 N. E. 2d 457, 1989 Ill. App. Lexis 1442 (Appellate Court of Illinois)

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