Terrific Tofu is a national franchisor issuing franchises to franchisees for its fast-food restaurants selling Tofu products. DFG Co. obtains a franchise for the Hartford, Connecticut area. As a part of its franchise agreement, Terrific requires that franchisees buy all their ingedients and other products from Terrific including products other than the Tofu. Terrific also requires that its franchisees sell its products at a designated price and that price varies by quite a bit across the country. DFG is concerned about these requirements because it would like to sell the Tofu product much cheaper and can obtain the ingredients other than Tofu much cheaper. DFG has written to Terrific claiming that Terrific never disclosed these requirements to DFG before it obtained the franchise, Terrific’s practices are illegal and DFG will stop buying products other than Tofu from Terrific and will charge lower prices. Terrific has told DFG that if it does so, Terrific will terminate DFG’s franchise. Please comment of the legal position of DGF and Terrific.
