Franchise Termination. Heating and Air Specialists, Inc, doing business as A/C Service Co, marketed heating and air-conditioning products. A/C contracted with Lennox Industries, Inc, to be a franchised dealer of Lennox products. The parties signed a standard franchise contract drafted by Lennox. The contract provided that either party could terminate the agreement with or without cause on thirty days' notice and that the agreement would terminate immediately if A/C opened another facility at a different location. At the time, A/C operated only one location in Arkansas. A few months later, A/C opened a second location in Tulsa, Oklahoma. Lennox's district sales manager gave A/C oral authorization to sell Lennox products in Tulsa, at least on a temporary basis, but nothing was put in writing. Several of Lennox's other dealers in Tulsa complained to Lennox about A/C's presence. Lennox gave A/C notice that it was terminating A/C's Tulsa franchise. Meanwhile, A/C had failed to keep its Lennox account current and owed the franchisor more than 200,000. Citing this delinquency, Lennox notified A/C that unless it paid its account within ten days, Lennox would terminate both franchises. A/C did not pay, and Lennox terminated the franchises. A/C filed a suit in a federal district court against Lennox, alleging in part breach of the franchise agreement for terminating the Tulsa franchise. Should A/C prevail? Explain.
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