Mike Karimi has been in the hotel management business since …

Mike Karimi has been in the hotel management business since the 1980s. The name of Karimi’s company is MAK LLC, which manages and operates several hotels in the United States. In 2004, two brothers, the Khatris, who were friends of Karimi’s, wanted him to take over the operation of one of their hotels. The problem with the hotel was that only 40 out of the 186 hotel rooms were suitable for guests to inhabit. This concerned Karimi, who nevertheless agreed to take over the hotel. Karimi received the rights to the hotel from the previous leasers. The hotel, Red Lion, wrote up a franchise agreement with Karimi. In the agreement, it states: “An ‘Event of Default’ will occur if you fail to satisfy or comply with any of the obligations, requirements, conditions, or terms set forth in this Agreement, the Manual, or any attachment to this Agreement. An ‘Event of Default’ will also occur if you make any misrepresentations to us, whether in entering into this Agreement, or in the performance of your obligations to us.” After the renovations were underway, a representative of Red Lion Hotels decided to tour the hotel to check on the renovations. This representative decided that the hotel looked “old and tired.” In early 2008, Red Lion sent Karimi a “notice of default and termination.” Did Red Lion have the right to send this notice to Karimi? [Red Lion Hotels Franchising Inc. v. MAK, LLC, 663 F.3d 1080 (2011).]

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