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18-3. Control of a Franchise- National Foods, Inc., sells franchises to its fast
18-3. Control of a Franchise- National Foods, Inc., sells franchises to its fast-food restaurants, known as Chicky-D’s. Under the franchise agreement, franchisees agree to hire and train employees strictly according to Chicky-D’s standards. In addition, Chicky-D’s regional supervisors must approve all new hires and policies, which they generally do. Chicky-D’s reserves the right to terminate a franchise for violating the franchisor’s rules. After several incidents of racist comments and conduct by Tim, a recently hired assistant manager at a Chicky-D’s, Sharon, a counterperson at the restaurant, resigns. Sharon files a suit against National. National files a motion for summary judgement, arguing that it is not liable for harassment by franchise employees. Will the court grant National’s motion? Why or Why not?
19-2. Conflict of Interest- Oxy Corp is negotiating with the Wick Construction Co for the renovation of the Oxy corporate headquarters. Wick, the owner of the Wick Construction Co., is also one of the five members of Oxy’s board of directors. The contract terms are standard for this type of contract. Wick has previously informed two of the other directors of his interest in the construction company. Oxy’s board approves the contract by a three-to-two vote, with Wick voting with the majority. Discuss whether this contract is binding on the corporation.
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