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The Franchise Memorandum

Summary Judgment Granted on Nearly All Claims by Three Cleaning Franchisees

A Minnesota federal district court has dismissed nearly all claims in Moua v. Jani-King of Minnesota, Inc., 2011 U.S. Dist. LEXIS 98455 (D. Minn. Aug. 30, 2011). This case originally was brought as a class action by a group of individuals who provide cleaning services or janitorial work at client accounts. After class certification was denied (see Issue 130 of The GPMemorandum), the parties apparently agreed that the defendant franchisor would move for summary judgment as to three of the individual plaintiffs before further summary judgment motions were filed. The plaintiffs alleged that they had been induced to enter into contracts in violation of the Minnesota Franchise Act.

After a careful review of the evidence, the court found no violation. First, statements by the franchisor that the franchise would be a “good business” and would continue for “a long time” were deemed mere puffery and not actionable. In addition, the court held that “[i]mmigrants, even those with limited English skills and no business experience, are not a group so gullible that they cannot recognize obvious puffery.” Disclaimers and other provisions in the written documents signed by the plaintiffs also were enforced by the court. After this summary judgment ruling, only contract-based claims by one plaintiff as to one specific cleaning account survived for further proceedings, along with one plaintiff’s claim related to an alleged “fraud by omission,” which was held in abeyance until the court received a copy of the correct UFOC at issue. All other fraud, good faith and fair dealing, and franchise claims were dismissed with prejudice.

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The Franchise Memorandum is a collection of postings on summaries of recent legal developments of interest to franchisors brought to you by Lathrop GPM LLP. 

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