Donkin Donut can require all franchisees using brand items to preserve the quality of their goods. It hasn’t violated business rules. The franchise agreement allows franchisors and their trademarks, logos, knowledge, technology, brand, and rights to distribute all the branded products to franchisees. Donkin Donut is able to require David Ungar not to use its trademarked items when providing services. David Ungar committed to Donkin Donut’s terms when he signed the franchise contract. Franchisees can do business as franchisees under franchisors’ name. David Ungar uses the Donkin brand’s prestige to boost his sales volume. Donkin Donut needs to enhance its business operations and strengthen its brand, in line with the franchise agreement. This agreement is not designed to encourage unfair commercial practices or deceit or conspiracies that create monopolies, as these are prohibited by Sharman’s Act and FTC Act (Sawyer 2019, 2019).
Hines was allowed to continue its unlawful pricing discrimination, which is meant to discourage competition and support unfair business practices. Hines’ pricing discrimination policies were designed to boost its brand equity in relation to other companies. Hines’ pricing discrimination policies were intended to promote its brand and not deceive, create monopolies, inhibit competition. Antitrust laws, such as the Sharman’s Act, FRC Act, and Clayton Anti-Trust Act, prohibit price discrimination if it is intended to damage competition (Rao & Wang, 2017). In the United States, price discrimination is permitted for promotional purposes as long as it doesn’t decrease competition. Hines’ actions weren’t illegal since they provided promotional materials to selected retailers and displayed product demos in an effort to build corporate brand equity. But, this did not reduce competition from companies that did not offer the same products. Hines’ actions might have been illegal if the company had sold their goods for longer periods of time at a lower price than market, eliminating competitors. But, Hines’ activities are not long-term plans but short-term advertisements.
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