Hobin v. Coldwell Banker Residential Affiliates, Inc.

744 A.2d 1134 (N.H. 2000)

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Nature of the Case

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Facts

P contacted D about becoming one of its franchisees. The nearest D office (Marple) was 5.5 miles away in Portsmouth. That office maintained a Rye telephone number, but no office in Rye. P thought he could make a franchise successful if Marple did not expand into Rye. P raised the issue of Marple's potential expansion in his discussions with a D recruiter, who told him that D treated Rye as a 'small market' area for which it charged a reduced franchise fee, implying that it could not support a second franchise and that the probability of a second franchise in Rye would be unthinkable. The recruiter suggested that D's internal policies and procedures for awarding franchises would not permit the placement of a second franchise in such proximity to an existing franchise as to jeopardize that franchisee's business. As a result of these representations, P executed a franchise agreement effective July 25, 1994, and entered D's Small Market Program. P competed with the Joycelyn Caulfield Agency (Caulfield), which maintained two locations -- the first in Rye, within 300 feet of Hobin's office, and the second in North Hampton, 3.2 miles away. Sometime around January 1997, Hunneman, which had purchased Marple in late 1995, also purchased Caulfield, resulting in its ownership of three offices within 5.5 miles of Hobin. P was upset. P learned that, as D's largest franchisee, Hunneman is given special preference and does not have to follow normal franchise-placement procedures. P did not follow its procedures in permitting Hunneman to locate in Rye and North Hampton but rather granted approval on a single telephone call from Hunneman's owner to D's Franchise Development department. P brought a petition for injunctive relief against D. The court dismissed the claim because the action of which P complains, the grant of another franchise in P's marketing area, is expressly permitted in the franchise agreement. P appeals the dismissal of his claims against Coldwell Banker for breach of implied covenant of good faith and fair dealing, breach of contract, misrepresentation, and violation of RSA chapter 358-A.