This is further strengthened in light of the nature of the relationship between the parties, which relies on close cooperation that promotes their common and separate interests. In such a situation, it is only necessary that the party to this relationship should know why and why it is suddenly coming to an end.
Of course, the approach in this matter cannot be precise, and if the franchisees knew what the background was, then the cancellation notice would not be cancelled only because of its lack of reasoning. Thus, for example, if Mr. Max had raised his grievance with Mr. Shimshon, and claimed before him that he was competing with the Max Stock chain for the investment in the Super-Stock chain, and shared the matter with the other franchisees, the cancellation notice would not have fallen like thunder on a clear day, and it would not have seemed appropriate to cancel it except for lack of reasoning.
On the other hand, in the present case, the reasoning was also required, when there was no preliminary dialogue between Mr. Max and Mr. Shimshon or the other franchisees, and in light of their need to understand why the business relationship between them, which was supposed to be interpreted over many years, was led to its sharp, sudden and unexpected end. The duty to give reasons in these circumstances serves a vital purpose, which is to enable the other party to understand whether it was lawfully given.
- The obligation to establish a proper infrastructure for cancellation how?
The cancellation of a franchise agreement of the type at hand is not a trivial matter. This is in light of the extent of the franchisees' reliance, and in light of the expectations of all parties that the relationship between them will be long-term. Against this background, it is not enough to cancel what is done due to speculation and fragments of information.
Indeed, the partiesto the agreement are private entities and are not an administrative authority. They are not bound by the rules of public law. They are not subject to the granting of the rightto plead guilty, and they are notsubject tothe collection of an evidentiary basis in accordance with the rule of administrative evidence. Still, they are not strangers to each other. This is certainly the case in the case of increased good faith in franchise contracts of the type before us.