After reading (1) Chapter 30’s discussion of “Franchises” and (2) this newspaper article about a lawsuit between Steak ‘n Shake franchisees and the franchisor, answer the following questions:
1. From the viewpoint of the franchisee, what are two advantages of franchising? What are two disadvantages of franchising?
2. Do you believe that state laws which require that a franchisor have “good cause” to terminate a Franchise Agreement – even when the Franchise Agreement itself contains no such requirement – is a good idea or a bad idea? Why? Please explain your logic.