Parlour Enterprises, Inc. v. Kirin Group, Inc.

A jury awarded plaintiffs Parlour Enterprises, Inc. (Parlour), Fun Foods 1, LP (Fun Foods 1), and Fun Foods Block, LP (Fun Foods Block), approximately $6.6 million in damages. The award consisted of lost profits, lost franchise fees, and consequential expenses sustained by plaintiffs when defendants unilaterally terminated a franchise agreement to develop subfranchises. Defendants Herman Chan and his corporation, The Kirin Group, Inc. (Kirin), appeal, contending the damages awarded were improper because the evidence was unreliable. We agree, with the exception of $62,907 awardable to Parlour as lost franchise fees and $67,348 in extra expenses incurred by Parlour to develop the subfranchises. We also reverse the judgment in favor of Fun Foods 1 and Fun Foods Block on the cause of action for intentional interference with, prospective economic advantage. The matter is remanded to the trial court with directions to reduce the award of damages to Parlour to $130,255. In all other respects, the judgment is affirmed.

FACTS AND PROCEDURAL BACKGROUND

From 1963 to 1972, Bob Farrell opened 55 Farrell’s Ice Cream Parlours (Farrell’s) around the United States. In 1972, he sold all…