Dry cleaning is a $5 billion industry primarily because the natural fabrics popular today, such as wool and linen, require professional cleaning. For more than five decades, customers have known and trusted franchised dry cleaners for service and quality in cleaning their nonwashable clothing. Guy and Ardis recently purchased and opened their franchise dry cleaning business. To help select a suitable location, the franchisor used a computerized market evaluation system that included in-depth mapping and demographic studies as well as customer profile reports. This system provided information on the age, gender, family income, occupation, lifestyle, and education of the consumers in the target area. The franchisor also customized the store design and plant layout to ensure efficient workflow and provided a comprehensive training program. The advertising guidelines and programs provided by the franchisor have given Guy and Ardis a strong edge in opening their store and in developing their clientele. They are looking forward to additional promotional and advertising materials that have been designed to generate immediate traffic and build a strong image of the store in the community. They are interested in opening another store as soon as this one becomes successful and they are able to realize a profit.

The total capital required to start the franchise was approximately $300,000. This included the initial franchising fee of $25,000, the cleaning equipment cost of $175,000, and other necessities of opening the business, such as lease improvements, working capital, and miscellaneous expenditures. In addition, the franchisor's regional manager served as liaison between the franchisee and the home office, providing consultation on business plans and operations and updates on services and materials available from the franchisor. Guy and Ardis are excited about their franchise, but are uncertain about their legal obligations, especially with respect to the franchisor: Can they provide additional services besides those required by the franchisor? Will they have the opportunity to modify their franchising agreement? The term of their franchising agreement was a period of five years, but Guy and Ardis are concerned that the franchisor may be able to terminate the agreement after the franchise has become successful. They are also not sure what they will do with the franchise when they retire. Could they sell the franchise to their children? Additionally, they have leased the land and the building for a ten-year period. They want to find out if this would make a conflict with their five-year franchising agreement.