Zapatha v. Dairy Mart, Inc

Facts

Plaintiff’s action alleged that the contract provision, which authorized the termination of the franchise agreement between Plaintiff and Defendant without cause was unconscionable and that Defendant’s termination was unfair and deceptive. Plaintiff also sought to enjoin termination of the franchise agreement. Plaintiff had a high school diploma and attended one year of college. He was an operator’s manager for a company in the business of electroplating. After being discharged from that job, he met with a representative of the defendant who told him about the opportunity to run a Dairy Mart franchise. Defendant approved Plaintiff’s application and offered him a store. The franchise agreement had a termination provision which allowed either party, after twelve months, to terminate the agreement without cause on ninety days’ written notice. If termination without cause occurred, the Defendant agreed to repurchase the saleable merchandise at retail prices. Defendant’s representa tive read and explained the contract to the Plaintiff including the termination provision. Defendant suggested that Plaintiff take the agreement to an attorney, however the Plaintiff declined to do so. The terms of the contract were not negotiable. A few years later, the Plaintiff surrendered that store and acquired another. When Plaintiff sought to acquire the second store, Defendant presented Plaintiff with a more detailed and less favorable franchise agreement. Plaintiff refused to sigh the agreement and Defendant gave written notice to the Plaintiff that his contract was being terminated in ninety days. The judge found that Defendant terminated the agreement solely because the Plaintiff refused to sign the new agreement.