Most likely, the court will find NF vicariously liable for the actions of their manager, because their manager has an agent relationship with his employer, NF. An agency relationship can be extrapolated from the facts regarding those involved and the amount of control exercised by NF over their franchisees. Here, NF had substantial control over everything from new hires to policies to termination.
Generally, it is the franchisor which determines the territory or location to be served by the franchisee. However, the franchisor can't grant the same location to other franchisee as it would result in loss of profits. The principle which is applied in this case is breaching of implied covenant of good faith and fair dealing. This principle is applicable in this case because according to the contract the franchisor should give exclusive territorial rights to the franchisee. This means that in this case Kejzar should have exclusive territorial rights to serve the particular location. Further, Kubota doesn't have any right to grant a dealership to Michael hammer in the same location of Kejzar Motors.
Usually the franchise agreement specifies that termination must be for " for cause " and then defines grounds for termination. Cause might include, for instance, the death or disability of the franchisee, insolvency of the franchisee, breach of the franchisee agreement or failure to meet specified sales quotas.
The cause was a towel 'about two feet 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.
Here the safety procedures are the centre of the issue which can constitute as breach of the franchisee agreement but the same are in sync with the laid down procedure of the LGE. Thus LGE cannot claim that to be the cause.