Franchisees Allege Franchisor Fraud in Colorado Coffee Chain

In an interesting case, ten franchisees of the Peaberry's coffee chain based in Denver, Colorado filed suit against Peaberry's claiming that the franchisor concealed material facts and provided false information through public statements.  The franchisees claimed that because of this fraud they invested in Peaberry's franchises and lost millions of dollars on franchises that had little chance to succeed.  The judge agreed that Peaberry's had concealed material facts and had made misleading public statements, but then ruled in Peaberry's favor.  The judge noted that the written franchise agreements contained acknowledgements by the franchisees that they were not relying on any representations outside of those included in the agreements.  The judge therefore concluded that the franchisees could not claim damages due to reliance on outside representations such as public statements.  The franchisees have appealed the ruling.

http://www.9news.com/money/article.aspx?storyid=111250&catid=344

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