Prepare a case study that requires critical

thinking.

PLEASE USE FIRAC method to analyze this case.

The case study should include related questions

and guiding answers.

J.C., Inc., had a franchise agreement with

McDonald's Corporation to operate McDonald's

restaurants in Lancaster, Ohio. The agreement

required J.C. to make monthly payments to

McDonald's of certain percentages of the gross

sales. If any payment was more than 30 days

late, McDonald's had the right to terminate the

franchise. The agreement also stated that even if

McDonald's accepted a late payment, that would

not "constitute a waiver of any subsequent

breach." McDonald's sometimes accepted J.C's

late payments, but when J.C. defaulted on the

payments in July 2010, McDonald's gave notice

of 30 days to comply or surrender possession of

the restaurants. J.C. missed the deadline.

McDonald's demanded that J.C. vacate the

restaurants, but J.C. refused. McDonald's files a

lawsuit alleging that J.C. had violated the

franchise agreement. J.C claimed that

McDonald's had breached the implied covenant

of good faith and fair dealing. Which party should prevail and why?