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Contracts Keyed to Marshall
Hutton v. Monograms Plus, Inc.
Citation:
604 N.E.2d 200 (1992)Facts
On August 4, 1989, Hutton and MPI executed a franchise agreement wherein MPI sold a monogramming franchise to Hutton. Hutton purchased the MPI franchise for $25,000. The terms of the agreement specified that MPI granted a nonexclusive ten-year license to Hutton to operate an MPI store. The addendum supplemented the franchise agreement, providing in part that if Hutton were unable to obtain financing suitable to him” within ninety days of signing the franchise agreement, he would then be entitled to a refund of the $25,000 franchise fee. fter executing the franchise agreement and addendum, Hutton obtained a $26,000 loan from Star Bank to cover the start-up costs of the business operation. The loan was secured by a mortgage executed by Hutton and his wife Pamela against their residence. To facilitate the lease or purchase of the monogramming machine, MPI issued a franchise offering circular to Hutton. After receiving the circular, Hutton spoke with MPI representative Pam Totty, who functioned as a liaison between Dennis Hanley, MPI’s financial director, and MPI franchisees. Since Hutton considered these terms to be substantially less advantageous than the terms offered in the MPI circular, he rejected the financing. This application was rejected because of insufficient collateral. On January 1, 1990, Hutton wrote to Larry Meyer, MPI’s president, requesting a refund of the $25,000 franchise fee due to the difficulty he had experienced in securing financing. This request was denied.
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