The issue at hand is that of BLT entering into a franchise agreement with Jolimont and Rivervale. Jolimont and Rivervale as per agreement have to clear their payable invoices to BLT but are disputing over charging of products and want to have a meeting with BLT in order to negotiate their conflict and issue. BLT directors believed there was no issue and did not arrange for the franchisees to argue their case in the monthly meeting and decided to stop delivering products to them until they paid for the supplies. Furthermore, they BLT wanted to open fitness centers at Jolimont and Rivervale which would clearly serve as completion to their franchisees.
A franchising code of conduct, that relies on the duty of good faith both implied and not implied exists according to the NSW Supreme Court of AMC Commercial Cleaning (NSW) Pty Ltd v Coade  NSWSC 832. Australian courts take up different approaches here. Two distinct duties are regarded in contractual duties of good faith which are that: the parties involved must negotiate in good faith (this is considered as the pre contractual duty) and they should act in good faith when it comes to fulfilling the clauses of the contract (which is considered as the post contractual duty).
Good faith itself is defined as comprising of three distinct notions. Primarily, the parties must understand that they are in an obligation to cooperate in order to achieve the purpose of the contractual objects. Secondly, the contracting people should ensure that they are compliant with honest standards of conduct and finally the compliance with standards are what could be reasonably expected given the interests and consideration of the two parties. Coal Cliff Colleries Pty Ltd v Sijehama Pty Ltd (1991) 24 NSWLR 1 highlights this obligation to act in good faith, consult and formulate for more comprehensive detailed agreements on venture when needed, even if the terms themselves might appear too illusory to enforce.
As per section 51AC of the Trade Practices Act 1974 (Cth), the court will also determine if the corporation in delivering its duties with another contractors has engaged in unconscionable conduct