CARLOS DEL REY AND LA GRANDE ENCHILADA FRANCHISE

LAW CASE STUDY Name: Institution: Date CARLOS DEL REY AND LA GRANDE ENCHILADA FRANCHISE Introduction Carlos Del Rey decided to open a Mexican fast-food restaurant and signed a franchise contract with a national chain called La Grande Enchilada. The contract required the franchisee to strictly follow the franchisor`s operating manual and stated that failure to do so would be grounds for terminating the franchise contract. The manual set forth detailed operating procedures and safety standards, and provided that a La Grande Enchilada representative would inspect the restaurant monthly to ensure compliance. Nine months after Del Rey began operating his restaurant, a spark from the grill ignited an oily towel in the kitchen. No one was injured, but by the time firefighters were able to put out the fire, the kitchen had sustained extensive damage. The cook told the fire department that the towel was "about a foot and a half from the grill" when it caught fire. This was in compliance with the franchisor`s manual that required towels be placed at least one foot from the grills. The next day, La Grande Enchilada gave Del Rey notice that the franchise would be terminated in thirty days for failure to follow the prescribed safety procedures. 1. What type of franchise was Del Rey`s La Grande Enchilada restaurant? A franchise is an arrangement where the owner of a copyright, trademark or a trade name allows a group, a company or an individual to use their copyright licenses, trade name or trademark in the selling of goods and services ( Kurtz, 2011 pp.102). The person who buys the copyright or the trademark is a franchisee while the seller is a franchisor. In this case, Carlos Del Rey is the franchisee while La Grande Enchilada is the franchisor. There are three types of franchise namely, distributorship, chain-style business operation and manufacturing arrangement. The franchise type here is ch...