Prepare a case study that requires critical thinking. 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?.
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specific findings have been summarized. Even though McDonald’s should prevail in this case, the company also imposed several ethical issues (DeTienne, Ellertson, Ingerson, & Dudley, 2021). First, McDonald’s is aware of the worsening economic condition affecting businesses, hence interfering with many franchise agreements. Noting that the cost of producing fast foods and operating such businesses has increased in the past few years, and businesses are not making as much money as they used to make years before. That indicates that McDonald’s is selling a false vision to J.C that does not reflect the realities of the independent operators. Therefore, McDonald’s is supposed to adhere to the economic conditions considering J.C pays his gross sales percentages even if it is late.