Brett and Elena Zalman $($Zalmans$)$ entered into a franchise agreement with Dairy Market, Inc. $($Dairy Market$).$ The agreement described the responsibilities of both Dairy Market and the Zalmans to the franchise. The agreement also contained a franchise termination provision. The termination provision allowed either party, after twelve months, to terminate the agreement without cause on ninety days written notice. The Zalmans understood the contract terms and declined the opportunity to have a lawyer review it before signing.

A few years later, Dairy Market presented a new contract to the Zalmans for execution. Some of the terms were less favorable to the Zalmans when compared with the earlier agreement. The Zalmans declined to sign the new agreement. Dairy Market then gave written notice to the Zalmans that their contract would be terminated in ninety days pursuant to the agreement both parties signed. The Zalmans sued Dairy Mary to prevent termination of the franchise agreement, alleging that Dairy Market acted in bad faith and the termination contract provision should not be enforced.