Hoffman v. Red Owl Stores, Inc.

Red Owl's agent Lukowitz (defendant) repeatedly assured Hoffman (plaintiff) that a relatively modest investment would secure him a Red Owl franchise, advising him at each step to sell his bakery, buy and run a smaller independent grocery store for experience, relocate his family, and pay for an option on a franchise lot - all of which Hoffman did, incurring substantial costs and upheaval - only for the final financing proposal to nearly double the required investment to about $34,000, at which point negotiations collapsed. Hoffman sued for damages based on his reliance on Red Owl's representations, and a jury awarded damages, though the trial court ordered a new trial on damages specifically related to the sale of Hoffman's independent grocery store.