Joe 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 Manitoba City, in the state of New Manitoba.
After several months of negotiations, Joe 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 Joe’s store with kitchen equipment, tables and seating, lighting and signage for inside and outside the store. Joe 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 Manitoba 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. Joe also gave BRU a deposit of $17,000 to secure his rights.
In consultation with his accountant, Joe 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 Joe 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 Joe that new market research has shown that the franchise is not likely to be successful in Manitoba City and the franchise contract is hereby cancelled. Outraged, Joe sues Burgers-R-Us in New Manitoba state court for breach of contract.
Discuss what types of damages Joe 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.
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