## Facts

- Ross T. Hobin sought to operate a Coldwell Banker real estate franchise in Rye, New Hampshire.
- During recruitment discussions, Hobin expressed concern about territorial encroachment by other Coldwell Banker franchisees.
- Hobin alleged a recruiter described Rye as a “small market” with a reduced franchise fee and suggested a second franchise there would be “unthinkable.”
- Hobin executed a written franchise agreement that expressly reserved to Coldwell Banker the right to establish additional franchises at any location.
- After Hobin began operating, Coldwell Banker approved an additional franchise in the area Hobin considered his market.
- Hobin sued alleging breach of contract, breach of the implied covenant of good faith and fair dealing, misrepresentation, and violation of New Hampshire’s Consumer Protection Act (RSA ch. 358-A).
- The superior court dismissed all claims for failure to state a claim, and Hobin appealed.

## Issues

1. Whether approving an additional franchise within Hobin’s asserted market could constitute breach of the implied covenant of good faith and fair dealing when the written agreement reserved Coldwell Banker’s right to establish franchises anywhere.
2. Whether pre-contract recruitment statements could support a breach of contract claim despite unambiguous contract language permitting additional franchises.
3. Whether the recruiter’s “small market” and “unthinkable” statements stated actionable claims for misrepresentation or for unfair or deceptive acts under RSA ch. 358-A.

## Decision

- The New Hampshire Supreme Court affirmed dismissal of the complaint in its entirety.
- The implied covenant claim failed because the challenged conduct fell within an express contractual right; the covenant could not be used to negate unambiguous contract terms.
- The breach of contract claim failed because the agreement clearly permitted Coldwell Banker to grant additional franchises, and alleged prior statements could not override that provision.
- The misrepresentation claim failed because the alleged statements were opinions or predictions about future events rather than specific false statements of existing fact.
- The RSA ch. 358-A claim failed because exercising an expressly reserved contractual right, based on the pleaded facts, did not amount to an unfair or deceptive practice.

## Legal Principles

- On a motion to dismiss, courts accept well-pleaded factual allegations as true but still require facts that, if proved, satisfy each element of a recognized cause of action.
- The implied covenant of good faith and fair dealing cannot be used to rewrite a contract or restrict rights unambiguously granted by the agreement.
- Where a contract expressly grants discretionary authority (including discretion to compete or expand), exercising that authority is not bad faith absent additional facts showing abuse that is independent of the granted right.
- General sales talk, opinions, and predictions about future business conditions or decisions are ordinarily not actionable misrepresentations.
- Pre-contract statements that conflict with clear written terms generally do not create enforceable contractual limitations or support statutory deception claims without specific, actionable misstatements and other required elements.

## Conclusion

The court held that a franchisee cannot convert recruitment assurances about market conditions into territorial protection when the written franchise agreement expressly allows the franchisor to place additional franchises anywhere; the pleaded statements were not actionable misrepresentations and did not support a Consumer Protection Act claim.


Hobin v. Coldwell Banker Residential Affiliates, Inc., 744 A.2d 1134 (N.H. 2000)