Question
Francesca operates a successful fast-food franchise called 'Fran's Food'. Tasty Pty Ltd is keen to open a 'Fran's Food' outlet in the Melbourne suburb of
Francesca operates a successful fast-food franchise called 'Fran's Food'. Tasty Pty Ltd is keen to open a 'Fran's Food' outlet in the Melbourne suburb of Caulfield. The parties reach an agreement that Tasty Pty Ltd will operate a Fran's Food restaurant in Caulfield for a period of five (5) years. The agreement contains the following terms: 9. Francesca promises that she will not open another Fran's Food franchise within the Caulfield area during the franchise period (that is, five (5) years). ... 13. Tasty Pty Ltd promises that it will operate the restaurant strictly in accordance with the laws and regulations set out in the Health Act. One year after the restaurant opened, Tasty Pty Ltd was charged and found guilty of breaching the Health Act. Francesca immediately cancelled the remainder of the franchise agreement and opened another Fran's Food franchise in Caulfield. Francesca decided to operate this new franchise herself. Advise Tasty Pty Ltd whether it has an action for breach of contract against Francesca, and (if so) what the appropriate remedies might be. Give reasons for your answer. (Assume that the answer is not affected by the Franchising Code of Conduct.)
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