Utah Cloudberry, Inc. (UCI) is an area developer of Cloudberry franchises in the state of Utah. UCI has opened several Cloudberry outlets, including one in Salt Lake City near the University of Utah. Kevin Macaulay is the general manager of this outlet.

According to his employment contract, Macaulay is responsible for running a "clean, orderly, lawful and respectable place of business following the standards established in the Franchise Agreement and Operations Manual." In furtherance of his responsibilities as general manager, Macaulay took the following actions:

• Purchased various cleaning supplies, including an automatic toilet bowl cleaner. The Franchise Agreement and Operations Manual did not specify the supplies to be used in cleaning.
• Purchased the point of sale system (a.k.a., a "cash register") specified by the Franchisor in the Operations Manual.
• Hired an interior decorator to redesign the store. The Franchise Agreement provides, "No furnishings, interior, and exterior decor items, fixtures, or equipment shall be used in or upon any Shop unless expressly approved by Franchisor."
• Closed the shop on Sundays to conform to local business norms, even though the Franchise Agreement provides that the shop "shall be open and operational a minimum of 7 days per week, 12 hours per day, every day of the year."
• Terminated a male employee who showed up at work unshaven, even though being clean-shaven was not an employment requirement imposed by the Franchise Agreement or Operations Manual.

Questions Presented:

(1) How would you analyze whether Macaulay had actual authority to take each of the foregoing actions?

(2) Given what we know about the franchise agreement, what creative liberties could Macaulay take in the running of the organization and still be within the constraints of the agreement (Be Creative)?

(3) What potential liabilities would you advise for someone in Macaulay's position?

(4) What preventative measures should they put in place from the start to not create friction and maintain within the scope of his employment?