LAWG 100D2 Lecture Notes - Lecture 23: Provigo, Franchising, Savings Account
23 Jan 2018
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Facts: provigo signed an agreement with arg to bring arg under the provigo brand, although they remained independently owned and operated. As part of this agreement arg had to buy 90% of its stock from provigo at fixed prices. Provigo opened a new discount supermarket in arg"s neighbourhood and aggressively promoted it. This new store sold at lower prices than other provigo stores, but arg was forced to buy at higher, standard provigo pricing. The general franchising agreement allowed for the opening of new stores to compete with existing stores. Reasoning: the franchising agreement is an ongoing relationship characterized by dependence of the franchisee on the franchisor, which imposes a high expectation of good faith. In this case, arg depended on provigo for most of its supplies. Provigo had the contractual right to control prices, to change their strategy (discount stores), to compete with itself, and so they are not at fault for these things.
