Naugles gave a ten-year restaurant franchise to Vylene. During the franchise term. Naugles built a new and competing restaurant nearby. The new restaurant featured lower prices and discount coupons. damaging Vylene's business and causing Vylene to file for bankruptcy protection. During the bankruptcy proceedings, Vylene argued that Naugles had no right to franchise another restaurant so close to Vylene's, even though the franchise agreement was silent regarding exclusive territories. Was Vylene's argument sound? (Vylene Enterprises, Inc. v. Naugles, Inc., 90 F.3d 1472)

Answer rating: 100% (QA)

Issue The issue is whether a franchisor that refuses to negotiate an option in good faith violates t... View the full answer