McDonald's Corporation grants to Bob a franchise in which he will be the only one who has the right to sell McDonald's products in his small hometown.Under the Sherman Act:
A) this is per se illegal.
B) this will be tested under the rule of reason.
C) there is a tying arrangement.
D) there is no violation.

Question

Quizplus · Accepted Answer

This will be tested under the rule of reason because the Sherman Act applies a rule of reason analysis to most business arrangements to determine if they unreasonably restrain trade. Exclusive territories, like the one granted to Bob, are not per se illegal but are evaluated based on their effects on competition.

McDonald's Corporation Grants to Bob a Franchise in Which He