Final answer:
The franchisor may have good cause to terminate the franchise if the franchisee's failure to meet specified sales quotas is included as a condition in the franchise agreement. This would constitute a breach of contract.
Step-by-step explanation:
When a franchisor evaluates the performance of a franchisee, one important metric might be the meeting of specified sales quotas. If a franchisee fails to meet these quotas, the question is whether the franchisor has good cause to terminate the franchise agreement. The available options suggest different grounds for termination:
- Breach of contract: This occurs if the franchise agreement includes a clause that defines a sales quota that must be met, and the franchisee fails to meet it.
- Termination for convenience: This refers to the franchisor's right to terminate the franchise without cause, which would not apply if the termination is due to failure to meet sales quotas.
- Franchise agreement violation: Similar to breach of contract, this would occur if failing to meet sales quotas is explicitly mentioned as a violation in the agreement.
- Force majeure: This refers to unforeseen events preventing someone from fulfilling a contract, which does not relate to the failure of meeting sales quotas by the franchisee.
In this case, if the failure to meet specified sales quotas is stated in the franchise agreement as a requirement, then it would be considered a breach of contract and give the franchisor good cause to terminate.