His rationale is that, if it is not unfair for you to put your other franchisee next to me, it cannot be unfair for me to be able to compete as an independent. I strenuously suggest that in the isolated mistake, by an otherwise quite decent franchisor, owning up to the mistake and letting the franchisee out if he insists, would be the smartest strategy. Here are the reasons. If a mistake was made as to one or a few franchisees, but not as to the whole chain, the whole chain will not walk out because the franchisor honestly made amends to the few who were offended. In today's world people do acquire competitors, and the difficulties in such adjustments are being worked out every day.
Life goes on.
On the other hand, where an opportunistic franchisee decides to reject the contract, and the franchisor has not made a substantial mistake as to him, the contract must be enforced. As much injury can be caused by not standing up for the contract when that is what is called for. In sum, my argument here is for reality based dispute resolution decisions. Good folks don't have to run from reality, even when they may be wrong. They're still good folks.