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3 1 . 6 Termination of a Franchise Kawasaki Motors Corporation ( Kawasaki ) , a Japanese corporation, manufactures motorcycles that it distributes in the

31.6 Termination of a Franchise Kawasaki Motors Corporation (Kawasaki), a Japanese
corporation, manufactures motorcycles that it distributes in the United States through its
subsidiary, Kawasaki Motors Corporation, U.S.A.(Kawasaki USA). Kawasaki USA is a
franchisor that grants franchises to dealerships to sell Kawasaki motorcycles. Kawasaki USA
granted the Kawasaki Shop of Aurora, Inc. (Dealer), a franchise to sell Kawasaki motorcycles
in Aurora, Illinois. The franchise changed locations twice. Both moves were within the five-mile
exclusive territory granted Dealer in the franchise agreement.
Dealer did not obtain Kawasaki USA's written approval for either move, as required by the
franchise agreement. Kawasaki USA acquiesced to the first move but not the second. At the
second new location, Dealer also operated Honda and Suzuki motorcycle franchises and was
negotiating to operate a Yamaha franchise. The Kawasaki franchise agreement expressly
permitted multiline dealerships. Kawasaki USA objected to the second move, asserting that
Dealer had not received written approval for the move, as required by the franchise agreement.
Evidence showed, however, that the real reason Kawasaki objected to the move was because
it did not want its motorcycles to be sold at the same location as other manufacturers'
motorcycles. Kawasaki terminated Dealer's franchise. Dealer sued Kawasaki USA for wrongful
termination. Who wins? Kawasaki Shop of Aurora, Inc. v. Kawasaki Motors Corporation,
U.S.A.,188 III.App.3d 664,544 N.E.2d 457, Web 1989 III.ApLexis 1442(Appellate Court of
Illinois)
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