Question
Franchisor is in the commercial trucking business. Franchisor grants Franchisee the exclusive franchise in the state of Texas for such commercial trucking services. The franchise
Franchisor is in the commercial trucking business. Franchisor grants Franchisee the exclusive franchise in the state of Texas for such commercial trucking services. The franchise agreement required Franchisee to do business exclusively with Franchisor in Texas. The agreement further provided that Franchisor will allow Franchisee the opportunity to cure a default within 120 days of receipt of written notice. Without Franchisor's knowledge, Franchisee then incorporated another commercial trucking business called ABC, Inc. in Texas. Franchisee then diverted commercial trucking business in Texas away from the franchise to ABC, Inc. Franchisee did this to avoid paying royalties to Franchisor. Franchisor discovered this and immediately terminated the franchise agreement without giving Franchisee 120 days to cure the defect. Franchisee complains in court that the Franchisor did not give Franchisee the right to cure the default in 120 days as specifically provided in the franchise agreement. According to the case in the textbook, what was the outcome of this court case?
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