Business Law and the Regulation of Business 11th Edition by Richard Mann, Barry Roberts

Exercise 25

McDonald's has an undeviating policy of retaining absolute control over who receives new franchises. McDonald's granted to Copeland a franchise in Omaha, Nebraska. In a separate letter, it also granted him a right of first refusal for future franchises to be developed in the Omaha-Council Bluffs area. Copeland then sold all rights in his six Mc Donald's franchises to Schupack. When McDonald's offered a new franchise in the Omaha area to someone other than Schupack, he attempted to exercise the right of first refusal. McDonald's would not recognize the right in Schupack, claiming that it was personal to Copeland and, therefore, nonassignable without its consent. Schupack brought an action for specific performance, requiring McDonald's to accord him the right of first refusal. Is Schupack correct in his contention?