Fern contracts to buy a franchise from Gooseberry Grocers, Inc. The contract is silent on the issue of territorial rights. Gooseberry allows a competing franchise to be established near Fern's store, which suffers a significant loss in profits. This is most likely a violation of

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The best choice is D, as the situation described falls under the implied covenant of good faith and fair dealing, which is implied in all contracts, including franchise agreements. This covenant requires both parties to act in good faith and deal fairly with each other. The franchisor's allowing a competing franchise to be established near Fern's store, resulting in significant loss in profits, violates this implied covenant. This is not a violation of the ban on certain types of anticompetitive agreements, as the contract is silent on territorial rights, nor is it a violation of the Federal Trade Commission's Franchise Rule, which mainly regulates franchisor disclosure requirements.

Fern Contracts to Buy a Franchise from Gooseberry Grocers, Inc