Albert is a short-order chef and has always dreamed of owning
his own burger joint. After years of waiting, the opportunity
arrived when he heard that Burgers-R-Us, a national fast food
chain, was planning to open a franchise in his town of Freedonia
Heights, in the state of New Freedonia.
After several months of negotiations, Albert has signed a
contract with Burgers-R-Us, and is now the proud franchisee of a
store that is scheduled to open on the second Friday in
January.
In preparation for the opening, Burgers-R-Us has furnished
Albert’s store with kitchen equipment, tables and seating, lighting
and signage for inside and outside the store. Albert has purchased
aprons, hats and latex gloves ($3,347.68) for his staff and “Grand
Opening” banners for outside ($1,026.59). He placed advertisements
in the local Pennysaver magazine and in
the Heights Gazette to hire cooks, cashiers,
waiters and cleaning staff ($1,375); the ads are running for four
consecutive weeks. He hasn’t hired anyone yet, but has interviewed
several potential candidates. Albert also gave BRU a deposit of
$17,000 to secure his rights.
In consultation with his accountant, Albert has projected that
in his first six months, he will have an operating loss of $23,000,
but that by the end of his first year he will show operating
profits of $78,000 for the year and that he will be profitable each
year thereafter. These estimates are based on what Albert has been
able to find in newspaper articles for other types of franchises in
other cities. He has no specific numbers relating to his own
franchise.
Six weeks prior to the scheduled grand opening, Burgers-R-Us
notifies Albert that new market research has shown that the
franchise is not likely to be successful in Freedonia Heights and
the franchise contract is hereby cancelled. Outraged, Albert sues
Burgers-R-Us in New Freedonia state court for breach of
contract.
Discuss what types of damages Albert may claim, which types is
he likely to be awarded and what amounts he is likely to be
awarded. Be sure to thoroughly explain your answers.
An IRAC essay is not necessary.
Albert is a short-order chef and has always dreamed of owning his own burger joint. After years of waiting, the opportun
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