Scheck owns a Burger Queen fast food restaurant franchise in the middle of

Smallville (pop. 5,943). The franchise is held under a highly detailed 45 page called

the "Franchise Agreement." One term of the Agreement gives Scheck the right to

operate a BQ franchise restaurant at the corner of Main and Elm in Smallville. The

Agreement specifically goes on to provide, however, that "nothing contained herein

shall be read to grant or imply that [Scheck] shall have any area, market, or

territorial rights in such geographic area."

Scheck has learned that BQ has just negotiated an agreement with Marryat

Corp., a major national food-services company, to build a brand-new Burger Queen

franchise right at the point where Main Street meets the Interstate, only a few blocks

from Scheck's store. Some Burger Queen employees tell Scheck that the company is

hoping that Marryat ultimately acquire a substantial number of its outlets and that

it will help the company get rid of older stores owned by small-town business people

and increase the professionalism of the ultimate product.

When the sparkling new building opens in its prime location, it quickly picks

up a huge share of the market. Scheck's business plummets. The relatively few

customers he gets, in fact, tell him that they came to his store because the lines at

the one on the Interstate were too long. He sues, arguing that Burger Queen opened

the new store knowing that it would drive him out of business, and thus violated its

obligation of good faith. BQ points to the explicit language of the Agreement. What

should each side argue, and who has the better argument?