Full opinion text
TABLE OF CONTENTS INTRODUCTION.......................................................... 798 PARTIES................................................................. 799 A. The Defendants................................................ 800 B. The Plaintiffs.................................................. 800 FACTUAL BACKGROUND................................................ 802 A. The Haagen-Dazs Franchise.................................... 802 B. Plaintiffs’ Allegations........................................... 804 DISCUSSION............................................................. 806 I.BREACH OF CONTRACT AND THE IMPLIED COVENANTS OF GOOD FAITH AND FAIR DEALING © O 00 A. Choice of Law................................................. © 00 B. Governing Law................................................. t-H 00 C. Plaintiffs’ Specific Allegations of Breach........................ © 00 D. Summary of Disposition of the Contract and Implied Covenant © 00 Claims II.FRAUD OR MISREPRESENTATION................................ © OQ 00 A. Claims of Fraudulent Inducement............................... C-03 00 B. Claims Concerning Distribution.................................. CM CO 00 C. Claims of Fraud in the Operation of the Franchise System....... ^ CO 00 D. Summary of Disposition of Plaintiffs’ Claims for Fraud or Misrepresentation ^ 00 III. MONOPOLIZATION................................................ 00 IV. PRICE DISCRIMINATION.......................................... 00 A. Robinson-Patman Act........................................... 00 B. Oregon Price Discrimination Act................................ 00 C. Colorado Unfair Practices Act................................... 00 D. Idaho Unfair Practices Law..................................... 00 00 E. California Unfair Practices Act.................................. 00 V. STATE CONSUMER FRAUD STATUTES ........................... 00 A. Minnesota Consumer Fraud Act................................. 00 B. Idaho Consumer Protection Act................................. 00 C. Washington Franchise Investment Protection Act................ 00 VI.STANDING OF PLAINTIFF CORPORATIONS...................... 00 VII.STANDING OF DAVID FULTON AND FRANCES FULTON........ 00 VIII.STANDING OF JOHN FULTON AND SHARON FULTON.......... 00 IX.VALIDITY OF RELEASES......................................... 00 A. Adequacy of Consideration...................................... 00 B. Fraud.......................................................... 00 C. Coercion....................................................... 00 00 D. Scope of the Releases.......................................... 00 CONCLUSION............................................................ 00 MEMORANDUM AND ORDER MacLAUGHLIN, District Judge. INTRODUCTION These two actions have been brought by sixteen groups of Haagen-Dazs franchisees against the franchisors, manufacturers and distributors of that well-known ice cream. The plaintiffs in the Carlock case are franchisees whose Haagen-Dazs “shoppes” are located in California, Colorado, Idaho, Oregon and Washington. The plaintiffs in the Dwyer case are franchisees with shoppes located in Minnesota. One plaintiff in the Dwyer case, Thomas Dwyer, was the local distributor for Haagen-Dazs in the Twin Cities area, as well as a franchisee. In both cases, plaintiffs allege fraud, misrepresentation, breach of contract, breach of the implied covenants of good faith and fair dealing, antitrust violations, and various state statutory claims. Two motions are now before the Court. Defendants have moved for summary judgment on all but one of plaintiffs’ claims. Plaintiffs have moved for summary judgment on their claim that the royalty and advertising contributions collected by defendants exceeded the amounts provided by the franchise agreement. PARTIES A. The Defendants There are seven defendants in each case. Three of the defendants are the corporations which originally developed and marketed Haagen-Dazs ice cream, now titled the WSC Liquidating Corporation, the HDF Liquidating Corporation, and the HDI Liquidating Corporation. The operations of those corporations were sold to the Pillsbury Company on July 11, 1983. The Pillsbury Company and the two subsidiaries responsible for its Haagen-Dazs operations are also defendants in these cases. In addition, there is one individual defendant, Doris Mattus-Hurley. 1.Doris Mattus-Hurley (Mattus-Hurley) Mattus-Hurley is the daughter of Reuben Mattus and Rose Mattus, the founders of the Haagen-Dazs ice cream business. Mattus-Hurley opened the first Haagen-Dazs Shoppe in 1976, founded the franchise system in 1978, and served as president of the franchisor corporations from 1978 to 1985. 2.WSC Liquidating Corporation (WSC) Originally named the Woodbridge Sweets Company, WSC was founded by Reuben Mattus and Rose Mattus. WSC manufactured Haagen-Dazs ice cream at its plant in Woodbridge, New Jersey and sold the ice cream to approximately 150 distributors who in turn sold the ice cream to retailers. WSC also sold ice cream to Mattus-Hurley’s franchise company, which in turn sold the ice cream to its franchisees. The business and affairs of WSC have been wound up and liquidated. 3.HDF Liquidating (HDF) HDF was founded in 1978 by MattusHurley under the name Haagen-Dazs Franchise, Inc. HDF franchised about 300 Haagen-Dazs Shoppes around the country. HDF purchased ice cream from WSC and resold it to franchisees. HDF is now an inactive corporation. 4. HDI Liquidating Corporation (HDI) HDI, originally known as Haagen-Dazs, Inc., distributed ice cream in metropolitan New York. It purchased ice cream from WSC and resold it to retailers in the New York area. HDI has been liquidated. 5. The Pillsbury Company (Pillsbury) Pillsbury, a diversified international food and restaurant company, purchased the assets of WSC, HDF, and HDI and related entities on July 11, 1983. 6.The Haagen-Dazs Company, Inc. (HDC) HDC is a wholly-owned subsidiary of Pillsbury which was created to manufacture Haagen-Dazs ice cream. HDC operates the original Woodbridge, New Jersey plant as well as a newer plant in Tulare, California. Like WSC before it, HDC sells ice cream to distributors for resale to retailers and to the franchise company (the Haagen-Dazs Shoppe Company, Inc., discussed below) for resale to franchisees. 7.The Haagen-Dazs Shoppe Company, Inc. (HDSC) HDSC, a wholly-owned subsidiary of Pillsbury, operates the franchise shoppe business. It is the assignee of the franchise agreements to which HDF was a party. HDSC purchases ice cream from HDC and resells it to franchisees. B. The Plaintiffs The claims in the Carlock case involve eighteen shoppes; the Dwyer claims involve five shoppes. The chart below summarizes, for each plaintiff, the date each franchise agreement was signed, the location of each franchise, and whether the franchise remains open. SUMMARY OF PLAINTIFFS Plaintiffs Date of Franchise Agreement City in Which Franchise Located_ Status of Franchise Thomas Dwyer 6/9/80 a Minneapolis, Minnesota Closed 12/31/88 6/9/80b Minneapolis, Minnesota Closed 11/88 5/17/82 Minneapolis, Minnesota Closed 11/84 10/4/84° Minnetonka, Minnesota Closed 11/30/87 Robert Goodman, Abby Goodman, Foothills 6/1/79 Denver, Colorado Open Ice Cream Works Ltd. 6/18/82 Littleton, Colorado Closed 7/19/87 Janet Drago, Noel Drago (the Dragos only assert claims based on the Broadway and Tukwila stores) 9/22/80 Seattle, Washington (Broadway Closed 12/88 3/1/82 Seattle, Washington (Pike Street Market) Open 5/18/81 Bellevue, Washington Open 12/2/82 Tukwila, Washington Closed 5/87 Christine Curtis, Timothy Curtis, Inside 2/26/81 Seattle, Washington Open Plaintiffs Date of Franchise Agreement City in Which Franchise Located Status of Franchise Scoop, Inc. 4/2/82 Seattle, Washington Open Jerry Carloek, Gerald Sullivan, Sullock Corporation 10/12/81 San Francisco, California Closed (Destroyed by Fire 12/88) Fulton,d Frances Fulton, David Fulton Oregon Open Mark Reiffe 4/19/82 San Francisco, California Open Marjorie Goldfine, Sander Goldfine, Henry Goldfine, Mighty Good Ice Cream, Inc. 6/24/82 Sacramento, California Closed 7/87 Jennifer Wein, Green Mountain Ice Cream Co., Inc.f 11/19/82 Lakewood, Colorado Closed 2/7/88 Aaron Pinkus, Marcia Pinkus 12/8/82 Edina, Minnesota Open Barry Dumont, Connie Dumont, Jeffrey Dilson, Jaqueline Dilson, Caledonia Ice Cream Co. 12/20/82 Vail, Colorado Open 8/5/83 Arvada, Colorado Closed 9/1/86 Frances T. Ellsworth, Roy Ellsworth, Howard Belodoff, Idaho Ices, Inc. 12/28/82 Boise, Idaho Open Jerry Crawford, Mary Crawford 10/4/83 Stockton, California Open Dorothy Kranhold, Steven Kranhold, Lester Kranhold 12/7/83 San Diego, California Open John EmryB 3/12/84 San Francisco, California Open Edwin Hines8 4/29/85 Englewood, Colorado Closed 10/88 Most of this chart is taken from Defendants’ Memorandum at 8-9. FACTUAL BACKGROUND In the late 1950’s, Reuben Mattus identified an untapped market for a high-quality ice cream. Mattus developed a “super premium” ice cream and named it “Haagen-Dazs” to give the product a Scandinavian flair. Affidavit of William Z. Pentelovich Exh. C. In 1961, Mattus began selling Haagen-Dazs ice cream in prepackaged pints to small stores and delicatessens in the New York metropolitan area. Id. During the 1970’s, sales of the product expanded into grocery store chains, convenience stores and other retail outlets. In 1980, 27,140,960 prepackaged pints of Haagen-Dazs ice cream were distributed to convenience store chains, supermarkets, grocery stores, and other retailers throughout the United States, including the 7-Elev-en convenience store chain of Southland Corporation. Pentelovich Aff. Exh. D. In 1981 sales increased to more than 40 million prepackaged pints. Id. By 1983, it had grown to 72,531,962 prepackaged pints. Id. A. The Haagen-Dazs Franchise Doris Mattus-Hurley, the daughter of Reuben Mattus, opened the first Haagen-Dazs shoppe in Brooklyn Heights, New York in 1976. Affidavit of Doris MattusHurley at 37. At the shoppe, customers bought Haagen-Dazs ice cream scooped out of bulk containers and served in a variety of forms such as cones, cups, sundaes, shakes and sodas. Related products such as brownies, cookies and soft drinks were also sold. The first shoppe prospered, and over the next several years, Mattus-Hurley opened additional shoppes herself. Mattus-Hurley also authorized various business associates, including plaintiff Dwyer, to open shoppes. In July 1978, Mattus-Hurley formed HDF as a first step towards creating a national franchise system. The franchise system would be a second avenue for the distribution of Haagen-Dazs ice cream. The relationship between HDF and its franchisees is based upon a written contract, the franchise agreement. See Pentelovich Aff. Exh. F. In addition, offering circulars provided to persons considering the purchase of a franchise contained disclosures and disclaimers regarding the franchises. See Pentelovich Aff. Exh. J. The same franchise agreement was used from 1978 to the present. Representatives of HDF signed the franchise agreements prior to July 11, 1983, and HDSC signed for the franchisor after that date. HDSC was also the assignee of all the franchise agreements signed by HDF. No other defendant entered into any franchise agreement with any of the plaintiffs. The franchise agreement begins with two paragraphs of “Recitals,” in which the franchisee acknowledges that the franchisor has invested considerable time, effort and money in developing the goodwill and reputation of Haagen-Dazs. In part the recital states, “Franchisee acknowledges that the Franchisor has created unique products of the highest quality, sold in the finest establishments.” The franchisee agrees to preserve the reputation and further the goodwill of Haagen-Dazs. In paragraph 1 of the franchise agreement, the franchisor grants a limited license to the franchisee to operate a single shoppe under the Haagen-Dazs trademark at a specified location for a specified term. The term “Haagen-Dazs Shoppe” is defined at paragraph 20 of the agreement as a retail outlet built to the franchisor’s specifications and where only approved products are sold. Paragraphs 2 and 3 establish the term of the license, which may range from five to twelve years, and the franchise fee. In paragraph 4, the franchisor agrees not to license another shoppe within a specified distance of the franchisee’s shoppe. Paragraph 4 also contains the following sentence. Franchisee acknowledges and agrees that the Franchisor and the Haagen-Dazs trademark owner has the right and may distribute products identified by the Haagen-Dazs trademarks through not only Haagen-Dazs shoppes but through any other distribution method which may from time to time be established. Paragraph 9 requires the franchisee to purchase all of the franchise’s ice cream and other frozen desserts from Haagen-Dazs at prices set by Haagen-Dazs. Haagen-Dazs agrees to sell the franchisee its requirements unless it is prevented from doing so by “Act of God, governmental restrictions, labor difficulties, inability to obtain supplies, or similar contingency.” Pentelovich Aff. Exh. F. par. 9. In paragraph 10, the franchisor promises to impart its “know-how” in operating a Haagen-Dazs shoppe and in preparing and selling Haagen-Dazs ice cream and other frozen desserts. The franchisor also promises to provide the franchisee with instruction in operating a Haagen-Dazs shoppe and in the preparation and sale of the products described in the “Shoppe Manual.” As compensation for the Haagen-Dazs know-how, the franchisee agrees to pay a royalty of forty cents per gallon of Haagen-Dazs products purchased for use at the shoppe. Each calendar year the royalty is to be adjusted, with one cent added or subtracted from the royalty for each “full 3.0 change during the previous calendar year in the U.S. Bureau of Labor Statistics Consumer Price Index, For All Urban Consumers, U.S. City Average (‘1967’ equals 100), from a base of 196.7,” provided that the royalty shall in no event be less than forty cents per gallon. Pentelovich Aff. Exh. F par. 10. At paragraph 10.1, a minimum annual royalty of $4,000 is established, adjusted according to the same formula and with a $4,000 floor. Paragraph 11 requires the franchisee to contribute towards the franchisor’s cost of advertising and promotions. The contribution amounts to $1,000 per year, with $25 added or subtracted to that amount for each “full 3.0 change” in the price index listed above. In paragraph 15.1, the franchisee warrants that he or she will exercise complete supervision and control over the day-to-day operation of the franchise, including a minimum of forty hours per week of the franchisee’s physical presence at the shoppe. The transfer of any legal, equitable or beneficial right, title or interest in the shoppe or its equipment, other than the grant of a purchase money security interest, is deemed “an irrebuttable presumption” that the agreement has been breached. Paragraph 15.2 grants the franchisee the right to set the retail price of the products authorized for sale under the terms of the franchise. Paragraphs 19.0-19.4 provide that the franchise may be cancelled and the business sold only on the following conditions: (1) that “the purchaser be a financially responsible person, of moral character and reputation satisfactory to the Franchisor;” (2) that the purchaser enter into a new Haagen-Dazs shoppe franchise, upon the terms and conditions as offered at the time of the purchase, and update the store to franchisor’s current specifications, and receive training in the operation of the shoppe as required by Haagen-Dazs; (3) that the franchisee has complied with the terms and conditions of the franchise and has paid all outstanding obligations in full; and (4) that $5,000 be paid to the franchisor. Paragraph 20.2 describes the Haagen-Dazs shoppe manual as containing valuable methods of procedure and specifications. The shoppe manual is deemed “an integral part” of the franchise agreement “with the same force and effects [sic] as if fully set forth herein.” The franchisor reserves the power to make changes in the shoppe manual. Changes mailed to the franchisees are considered to be effective unless the franchisee objects within five days of receiving the proposed change. Paragraph 24 defines “know-how” as, the techniques, methods, procedures, recipes, trade secrets, inventions, specifications and other information relating to the ice cream and frozen desserts business or the type of business contemplated under this Franchise, which were either imparted by Franchisor to Franchisee in the Shoppe Manual or as part of Franchisee’s training or otherwise, and receipt of which Franchisee hereby specifically acknowledges, or which Franchisee originated or acquired during the term of the Franchise, or in connection with it. Paragraph 28 provides that the franchise is deemed to have been made in the State of New York, County of Bronx. It also provides that the contract is to be governed and interpreted under New York law. Paragraph 30 declares that rights and remedies provided in the franchise agreement shall be in addition to all other rights and remedies to which the parties are entitled in law or equity. The final paragraph of the agreement, paragraph 33, states that no claims of success or failure have been made to the franchisee. The paragraph also contains an integration clause which provides that the franchise agreement contains all oral and written agreements, representations and arrangements between the parties hereto ... and no representations or warranties are made or implied, except as specifically set forth herein. This Franchise cannot be changed or terminated orally. B. Plaintiffs’ Allegations Plaintiffs’ factual allegations can be broken down into three categories: misrepresentations about the profitability of the franchises, failure to provide the promised support for franchise operations, and misrepresentations about the franchisor’s commitment to the franchises. These allegations will be described generally in the section below. The matching of the plaintiffs, their claims and the evidence provided in support of the claim will be reserved until the discussion of the defendants’ motion. 1. Misrepresentations About the Profitability of the Franchises Plaintiffs claim that defendants induced them to enter franchise agreements by overstating the projected revenues and understating the projected costs of operating the shoppes. Generally, plaintiffs claim that they were given figures for the average annual gross sales ranging from $250,000 to $450,000. Plaintiffs claim that defendants informed them that the operating profit of a shoppe was between twenty-five and thirty percent of gross income. Start-up costs were estimated by defendants to be between $80,000 and $125,000. Defendants allegedly stated that the average cost of goods sold was thirty-seven percent. According to the plaintiffs, each of these statements was made either with the knowledge that it was false or in reckless disregard of the truth. 2. Failure to Provide Operational Support Plaintiffs also claim that defendants did not provide the franchisees with the expertise, the quality of goods, exclusive rights to certain flavors, and other type of operational support necessary to make the shoppes profitable. First, plaintiffs claim defendants promised to provide expertise in site selection and lease negotiations. Plaintiffs claim that the assistance which defendants provided was so inadequate as to be a breach of that promise. Plaintiffs also claim that defendants did not impart know-how “capable of helping them improve the profitability of their operations.” Oarlock Amended Complaint par. 28A; Dwyer Amended Complaint par. 23A. Haagen-Dazs ice cream is sold to the franchisees in 2Vz gallon containers. Franchisees are trained to monitor their sales and inventory by weight, not volume. Each scoop of ice cream is supposed to weigh between 4 and ounces, March 22, 1989 Affidavit of Jeff Ross (Ross Aff. II), Exh. 1 at 2.25, and inventory is calculated based on the weight of the ice cream used in each product sold. April 4, 1989 Affidavit of Christine Curtis par. 4, 5 and Exh. A-C. Plaintiffs claim that the ice cream sold to them weighed less than promised, and consequently yielded fewer scoops than defendants claimed it would. Plaintiffs also claim that the defendants’ mass distribution of prepackaged pints of Haagen-Dazs ice cream hurt the profitability of the franchises. Plaintiffs argue that defendants were obligated to take steps to insulate franchisees from the competition provided by the retail sales of prepackaged pints. Plaintiffs assert several claims regarding an exclusive right to certain ice cream flavors. One plaintiff claims to have been told that only eight flavors would be available for sale in retail outlets. Other plaintiffs claim that defendants told them that special flavors with nuts, chips or cherries would be sold exclusively in shoppes. Another allegation made is that defendants promised that new flavors would be sold exclusively in shoppes for at least six months. None of these alleged promises were kept. Plaintiffs also allege that defendants fraudulently promised them that the opening of a new plant in Tulare, California would result in a lower wholesale price for shoppes on the West Coast. Plaintiffs further claim that defendants charged them royalties in excess of the amounts provided in the franchise agreement. In addition, plaintiffs claim that defendants have sold “poor quality ice cream” to certain plaintiffs and that defendants have sold bulk ice cream to nonfranchised dip store operations. Carlock Amended Complaint par. 28(G); Dwyer Amended Complaint par. 23(G). Finally, plaintiffs claim that they were promised assistance with marketing and advertising which they never received. Plaintiffs also claim that defendants promised to hire regional representatives to advise the franchisees. Plaintiffs claim that each of these promises was fraudulently made. Plaintiffs also claim that from time to time the defendants would require them to purchase “expensive advertising, equipment and other goods” which increased the shoppes’ operating costs without generating additional revenues. Carlock Amended Complaint par. 28(J); Dwyer Amended Complaint par. 23(J). 3. Misrepresentations about the Defendants’ Commitment to the Franchise System Plaintiffs assert that, as a result of the competition from prepackaged pints, the lack of operational support, and bad locations, many franchises had financial difficulty. Plaintiffs claim that while defendants were assuring them that their problems would be addressed, defendants had decided instead to concentrate on marketing the prepackaged pints. The franchise system was allegedly regarded by defendants only as a means of boosting the retail sales of the prepackaged pints. Plaintiffs accuse defendants of competing against their own franchises through the distribution of prepackaged pints in nonfranchised retail outlets. Plaintiffs claim that defendants sold products to nonfranchised retail outlets “at substantially lower prices and on substantially more favorable economic terms” than to franchises. Carlock Amended Complaint par. 28(F); Dwyer Amended Complaint par. 23(F). Plaintiffs claim that defendants’ lack of commitment to the franchise system manifested itself in a number of ways. First, defendants were unwilling to disclose relevant information to the franchisees. Plaintiffs claim that defendants concealed the fact that franchise revenues were on the decline nationally in 1985. Plaintiffs also claim that defendants were unwilling to disclose the amount of ice cream sold in bulk to non-franchisees or the price at which distributors sold the prepackaged pints to other retail outlets. Second, plaintiffs allege that, by increasing the retail sales of prepackaged pints and discontinuing the practice of reserving certain flavors exclusively for the shoppes, the defendants took steps to terminate or scale down the franchise system. Plaintiffs claim that defendants concealed these plans and instead made representations to the contrary. Plaintiffs claim that defendants assured them Haagen-Dazs was a “family” and that the franchisees’ interest and concerns would be given high priority. Plaintiffs claim that defendants promised to expand the franchise system to include hundreds of new stores. Plaintiffs also allege that defendants promised to renew their franchises if they “paid their bills and ran clean shoppes.” Plaintiffs also claim defendants promised to buy back the franchise of any unhappy franchisee. Carlock Amended Complaint Exh. S. Third, plaintiffs claim to have been told that Haagen-Dazs would never be sold. After it was sold, plaintiffs claim that Pillsbury promised that it would “turn things around” by focusing on building shoppe revenues. Carlock Amended Complaint Exh. X. Plaintiffs also claim that Pillsbury assured them that Doris Mattus-Hurley, the founder of the franchise system, would remain with the new franchisor at least through 1988. Fourth, defendants are alleged to have attempted to reduce the size of the franchise system by offering to convert some franchisees into licensees. Defendants are also alleged to have implemented policies which prevent franchisees from renewing their franchises or from expanding their operations. Furthermore, defendants are claimed to have reduced the size of the HDSC staff. Fifth, defendants are alleged to have “condoned” the publication of magazine and newspaper articles during 1986 which created the impression that Pillsbury was in the process of ending the Haagen-Dazs franchise system. These articles are alleged to have destroyed the plaintiffs’ ability to sell their franchises. On the strength of the allegations listed above, the plaintiffs in both cases assert claims for breach of contract, breach of an implied covenant of good faith and fair dealing, fraud and misrepresentation, price discrimination and monopolization. The Dwyer plaintiffs also assert claims under Minnesota’s Prevention of Consumer Fraud Act and its Franchise Act. The Carlock plaintiffs have brought claims under the California Unfair Practices Law, the Idaho Unfair Practices Law, the Idaho Consumer Protection Act, the Colorado Unfair Practices Act, the Oregon Price Discrimination Act, and the Washington Franchise Relations Act. Defendants move for summary judgment on each of these claims. Plaintiffs have moved for summary judgment on their claim that defendants breached the franchise agreement by overcharging plaintiffs for royalties and advertising. DISCUSSION A movant is not entitled to summary judgment unless the movant can show that no genuine issue exists as to any material fact. Fed.R.Civ.P. 56(c). In considering a summary judgment motion, a court must determine whether “there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). The role of a court is not to weigh the evidence but instead to determine whether, as a matter of law, a genuine factual conflict exists. AgriStor Leasing v. Farrow, 826 F.2d 732, 734 (8th Cir.1987). “In making this determination, the court is required to view the evidence in the light most favorable to the nonmoving party and to give that party the benefit of all reasonable inferences to be drawn from the facts.” AgriStor Leasing, 826 F.2d at 734. When a motion for summary judgment is properly made and supported with affidavits or other evidence as provided in Fed.R.Civ.P. 56(c), then the nonmoving party may not merely rest upon the allegations or denials of the party’s pleading, but must set forth specific facts, by affidavits or otherwise, showing that there is a genuine issue for trial. Lomar Wholesale Grocery, Inc. v. Dieter’s Gourmet Foods, Inc., 824 F.2d 582, 585 (8th Cir.1987), cert. denied, 484 U.S. 1010, 108 S.Ct. 707, 98 L.Ed.2d 658 (1988). Moreover, summary judgment must be entered against a party who fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). I. BREACH OF CONTRACT AND IMPLIED COVENANTS OF GOOD FAITH AND FAIR DEALING A. Choice of Law The conflict of law rules of the forum state control which substantive law will apply. Klaxon v. Stentor Electric Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021, 85 L.Ed. 1477 (1941). There are, however, constitutional concerns that bear on choice of law. The due process clause and the full faith and credit clause are satisfied only if the state whose law is selected has “a significant contact or significant aggregation of contacts, creating state interests, such that choice of its law is neither arbitrary nor fundamentally unfair.” Allstate Insurance Co. v. Hague, 449 U.S. 302, 312-13, 101 S.Ct. 633, 640, 66 L.Ed.2d 521 (1981). See also, Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 818-19, 105 S.Ct. 2965, 2977-78, 86 L.Ed.2d 628 (1985). Although not identical to the “minimum contacts” analysis relevant to personal jurisdiction, the constitutional test for choice of law is similar. See, Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105 S.Ct. 2174, 2187, 85 L.Ed.2d 528 (1985) and Allstate, 449 U.S. at 320-21 n. 3, 101 S.Ct. at 644 n. 3 (Stevens, J., concurring). Minnesota’s approach to choice of law is based on the five “choice-influencing considerations” described by Professor Robert Leflar: predictability of results, maintenance of interstate and international order, simplification of the judicial task, advancement of the forum’s governmental interests, and application of the better rule of law. Hime v. State Farm Fire & Casualty Co., 284 N.W.2d 829, 833-34 (Minn. 1979), cert. denied, 444 U.S. 1032, 100 S.Ct. 703, 62 L.Ed.2d 668 (1980); Milkovich v. Saari, 295 Minn. 155, 203 N.W.2d 408, 412 (1973). Generally, Minnesota enforces contractual choice of law provisions, so long as application of the chosen law is consistent with constitutional requirements. See, e.g., Milliken & Co. v. Eagle Packaging Co., 295 N.W.2d 377, 380 n. 1 (Minn.1980); Combined Insurance Co. v. Bode, 247 Minn. 458, 464, 77 N.W.2d 533, 536 (1956) (Minnesota is “committed to the rule that the parties, acting in good faith and without an intent to evade the law, may agree that the law of [another state] shall govern”), rev’d on other grounds by Milkovich v. Saari, 295 Minn. 155, 203 N.W.2d 408 (1973); Standal v. Armstrong Cork Co., 356 N.W.2d 380, 382 (Minn.Ct.App. 1984). Contractual choice of law provisions apply to claims for breach of the implied covenants of good faith and fair dealing. See Economu v. Borg-Warner Corp., 652 F.Supp. 1242, 1248 (D.Conn.), aff'd, 829 F.2d 311 (2d Cir.1987); C. Pappas Co. v. E & J Gallo Winery, 610 F.Supp. 662, 665 (E.D.Cal.1985), aff'd, 801 F.2d 399 (9th Cir.1986); Gilchrist Machinery Co., Inc. v. Komatsu Am. Corp., 601 F.Supp. 1192, 1200-01 (S.D.Miss.1984); Comerio v. Beatrice Foods Co., 595 F.Supp. 918, 921 (E.D.Mo.1984); Bryan v. Massachusetts Mutual Life Insurance Co., 364 S.E.2d 786 (W.Va. 1987). Paragraph 28 of the franchise agreements signed by the plaintiffs states that the franchise shall be deemed to have been made in the State of New York and that all questions of performance or breach shall be governed by New York law. It also states that the parties consent to suit in New York for any cause of action arising under the franchise agreement. In that paragraph, the franchisee appoints an agent in New York for the service of process. Plaintiffs argue that, despite paragraph 28’s choice of law provision, New York law should not apply in this action because there are insufficient contacts with New York to make application of its law constitutional. Plaintiffs also argue that New York law should not govern the contract because it would be contrary to a fundamental policy of Minnesota, namely the Minnesota Franchise Act. 1. Whether Application of New York Law is Constitutional Seventeen of the twenty-three franchise agreements at issue were signed by HDF. Those agreements were assigned to HDSC on July 11, 1983. The remaining six franchise agreements were signed by HDSC. While HDF was incorporated in New York, HDSC is incorporated and has its principal place of business in New Jersey. A party’s incorporation in a state is a contact sufficient to allow the parties to choose that state’s law to govern their contract. Hale v. Co-Mar Offshore Corp., 588 F.Supp. 1212, 1215 (W.D.La.1984); In re Falk, 2 B.R. 609, 614 n. 17 (Bankr.D.N.J. 1980); Restatement (Second) Conflicts of Laws, § 187 comment f (1971) (domicile of party satisfies “reasonable relation” test). But see, Staten Island Rustproofing Inc. v. Ziebart Rustproofing Co., 70 Bus. Franchise Guide (CCH) par. 8492 (E.D.N.Y.1985) (state of incorporation is not sufficient contact). Plaintiffs argue, however, that the contacts necessary to support application of New York law ceased in 1983 when HDF was purchased by Pillsbury and HDSC became party to the franchise agreement. In support of their argument, plaintiffs cite Northern States Power Co. v. International Telephone and Telegraph Corp., 550 F.Supp. 108 (D.Minn.1982). In Northern States Power, the plaintiff, a Minnesota corporation, contracted with the defendant, also a Minnesota corporation, for the manufacture of screw anchors and extensions used to install and erect power line towers. The contract was negotiated and executed in Minnesota, and the screw anchors were to be assembled in Wisconsin. The screw anchors failed, resulting in the collapse of four towers. Plaintiff sued on tort and contract theories. The contract contained a clause specifying that New York law was to govern its interpretation. The only contact with New York was that the parent corporation of the defendant had its principal place of business there. Applying Minn.Stat. § 336.1-105, which declares contractual choice of law provisions effective if the transaction bears “a reasonable relation” to the state whose law is selected, the court held that Minnesota law should govern the contract because New York had no reasonable relation to the parties’ transaction. Northern States Power is distinguishable on two grounds. First, the Minnesota Uniform Commercial Code’s choice of law provision, applied in Northern States Power, is not applicable in the present case. Rather than the Code’s “reasonable relationship” test, the appropriate standard here is whether application of the chosen state’s law would be “arbitrary or fundamentally unfair.” Second, a party to this case, HDF, was incorporated in the chosen state. Furthermore, HDF’s assign- or, HDSC, has a substantial interest in the application of one state’s contract laws to all of its franchise agreements, as application of different bodies of law to various contracts would likely render the franchise system unmanageable. The need for uniform enforcement of franchise agreements has been a consideration in decisions to enforce a contractual choice of law provision. See, e.g., Capital National Bank v. McDonald’s Corp., 625 F.Supp. 874, 880 (S.D.N.Y.1986) (“Because McDonald’s enters into a substantial number of franchise agreements in various states, it has an interest in having those agreements governed by one body of law.”); Sullivan v. Savin Business Machines Corp., 560 F.Supp. 938, 940 (N.D.Ind.1983) (enforcing franchise agreement’s choice of New York law because “the desire for a uniform facilitation of the conduct of trade” was valid reason for use of form contract). Furthermore, the largest concentration of franchises was in New York. In 1983, 73 out of approximately 300 shoppes were in New York. October 19, 1987 Affidavit of Thomas Dwyer Exh. A. The Court will enforce the parties’ contractual choice of law provision and apply New York law in the Carlock case. By entering into contracts which expressly provide that New York laws govern franchise disputes, the franchisees purposefully availed themselves of the benefits and protections of New York’s laws. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105 S.Ct. 2174, 2187, 85 L.Ed.2d 528 (1985). Not only did franchisees agree that New York law should govern the contract, they also consented to suit in New York and appointed an agent there for service of process. Pentelovich Aff., Exh. F, par. 28. The contacts with New York go beyond those created by the agreement, however, since the franchise system was created by a New York corporation. The relevant test is whether New York has “a significant contact or significant aggregation of contacts,” giving rise to state interests, such that application of New York’s law is neither arbitrary nor fundamentally unfair. Allstate Insurance Co. v. Hague, 449 U.S. 302, 313, 101 S.Ct. 633, 640, 66 L.Ed.2d 521 (1980). Given that (1) the franchise system was developed by a New York corporation, (2) the parties agreed to have New York law govern the contract and (3) the franchisees have consented to personal jurisdiction in New York, the application of New York law cannot be considered either arbitrary or fundamentally unfair. 2. Whether Application of New York Law Would Violate a Fundamental Policy of Minnesota Plaintiffs argue that enforcement of the contractual choice of law provision would violate Minnesota’s public policy by circumventing application of the Minnesota Franchise Act. This argument can apply only to the Dwyer plaintiffs, and it involves a single factor in the Minnesota conflicts analysis, the advancement of the forum’s governmental interests. See Schwartz v. Consolidated Freightways Corp., 300 Minn. 487, 221 N.W.2d 665 (1974) (analysis of governmental interests determinative), cert. denied, 425 U.S. 959, 96 S.Ct. 1740, 48 L.Ed.2d 204 (1976). Under this factor, Minnesota courts consider whether the state has a strong interest, reflected in its public policy, which favors application of a particular law. SCM Corp. v. Deltak Corp., 702 F.Supp. 1428, 1431 (D.Minn. 1988); Milkovich v. Saari, 295 Minn. 155, 203 N.W.2d 408, 414 (1980). See also, R. Leflar, L. McDougal, R. Felix, American Conflicts Law (4th ed. 1986) § 106. Plaintiffs argue that the Minnesota Franchise Act constitutes a fundamental policy of the state. That Act, codified at Minn. Stat. § 80C.01 et seq., was adopted in 1973 to protect franchisees within Minnesota from unfair contracts and other previously unregulated abuses in the then-burgeoning franchise industry. Clapp v. Peterson, 327 N.W.2d 585, 586 (Minn.1982). The act covers all “franchises” within the state if (1) the franchisee has a right to use the franchisor’s trade name or commercial symbol, (2) the franchisee shares a “community of interest” with the franchisor in the marketing of goods or services, and (3) the franchisee has paid a franchise fee. Minn.Stat. § 80C.01, subd. 4. The statute provides three forms of protection. First, it requires that, before any franchise can lawfully be offered or sold within the state, the franchise be registered and have filed a public offering statement with certain disclosures about the franchisor and the proposed franchise relationship. Minn.Stat. §§ 80C.02, 80C.04 and 80C.06. Second, the statute requires that a franchise be terminated for “good cause” and, in most cases, only after franchisees are given advance written notice and an opportunity to correct any deficiencies. Minn.Stat. § 80C.14, subd. 3. Third, the statute makes injunctive relief available to remedy “unfair or inequitable practices.” Minn.Stat. § 80C.14, subd. 1. The statute also contains an anti-waiver provision which makes void any “condition, stipulation or provision” purporting to bind the franchisee to a waiver of the statute’s provisions. Minn.Stat. § 80C.21. Application of New York law would allow the defendants to avoid the provisions of Minnesota’s Franchise Act. Although New York has an analogous statute, the New York Franchise Sales Act, N.Y.Gen. Bus.L. § 680, that statute would not cover the plaintiffs. Like most of the state laws enacted to protect franchisees, the New York statute applies only where an offer to sell or buy the franchise is made in New York, the franchise is actually sold in New York, the franchise operates in New York, or the franchisee resides in New York. See Mon-Shore Management, Inc. v. Family Media, Inc., 584 F.Supp. 186, 191 (S.D.N.Y.1984). The issue that must be addressed is whether the Minnesota Franchise Act is, in this case, a sufficiently strong governmental interest to preclude enforcement of the parties’ contractual choice of law provision. The United States Court of Appeals for the Eighth Circuit considered a similar question in Modern Computer Systems, Inc. v. Modern Banking Systems, Inc., 871 F.2d 734 (8th Cir.1989). Modem Computer involved an appeal by a plaintiff franchisee from the denial of its motion for a preliminary injunction, based on the Minnesota Franchise Act, to prevent the defendant franchisor from terminating its franchise. One basis for the trial court’s denial of the motion was its determination that, as a result of the choice of law clause in the parties’ contract, Nebraska, not Minnesota, law governed the dispute. Nebraska also has a franchise act, but that act did not cover the plaintiff franchisee. The district court’s finding was reversed by the panel which originally heard the appeal, Modern Computer Systems v. Modern Banking Systems, 858 F.2d 1339 (8th Cir.1988), however on rehearing the court vacated the panel’s decision and affirmed the district court. 871 F.2d 734 (8th Cir.1989) (en banc). The question addressed in Modem Computer is whether the Minnesota Franchise Act constitutes a fundamental state policy which may not be overridden by the parties’ contractual choice of law. To answer that question, the Eighth Circuit borrowed the factors applied by the United States Court of Appeals for the Sixth Circuit in Tele-Save Merchandising v. Consumers Distributing, 814 F.2d 1120, 1123 (6th Cir.1987). These factors are (a) whether the parties had agreed in advance to the law to be applied in future disputes; (b) the relative strength of the contacts between the state selected and the plaintiff’s home state; (c) whether the parties were of unequal bargaining strength; and (d) whether application of the law chosen in the contract would be repugnant to the public policy of the plaintiff’s state. 871 F.2d at 738. Applying these factors, the court of appeals noted that the parties had agreed to have their contract governed by Nebraska law and that the contacts were “fairly evenly divided” between Minnesota and Nebraska. 871 F.2d at 739. The court found “ ‘no evidence of a great disparity in bargaining power between the parties.’ ” Id., quoting a memorandum opinion of the Dakota County District Court. More significantly, the court declared that: Some evidence of oppressive, unreasonable or unfair use of superior bargaining position, as in a contract of adhesion, is required before a court can justifiably disregard a mutually agreed upon choice of law clause. Id. Finally, the court found that application of the choice of law clause was not repugnant to the public policy of Minnesota. The franchisee protections embodied in the Franchise Act were offset by the “powerful countervailing policy” of enforcing the parties’ choice of law. 871 F.2d at 740. Thus, the court held that, despite its anti-waiver provision, the Minnesota Franchise Act would not override the contractual choice of law clause. Application of Modem Computer’s four-factor analysis yields the same result in this case. First, the parties have agreed to have their contract governed by New York law. Pentelovich Aff. Exh. F at par. 28. Second, this transaction has contacts with both New York and Minnesota. Third, the disparity between the parties’ bargaining strength is not sufficient to justify disregarding their choice of law. The standard agreements signed by the plaintiffs are customary in franchising given the need for system-wide uniformity and the requirements of various state statutes. This does not mean that plaintiffs had no choice. Plaintiffs could have invested in a Haagen-Dazs franchise under the terms of the franchise agreement, invested in one of the many other franchise systems, or chosen some other form of investment. Plaintiffs allege that HDF used its superior bargaining position to fraudulently induce them to purchase a franchise. However, the Court has carefully reviewed the extensive record presented on this motion for summary judgment and nothing in that record suggests the “oppressive, unreasonable or unfair use” of bargaining power to which the Modem Computer court referred. Finally, as the Modem Computer court held, a choice of law clause which precludes application of the Minnesota Franchise Act is not repugnant to Minnesota’s public policy. Therefore, the Court concludes that New York law must be applied in both the Dwyer and Carlock cases. This analysis leads, of course, to the conclusion that the claims under the Minnesota Franchise Act in Dwyer should be dismissed. However, defendants did not move for summary judgment on those claims and the law in the Eighth Circuit prohibits a court from granting summary judgment sua sponte. Williams v. City of St. Louis, 783 F.2d 114 (8th Cir.1986). B. Governing Law Defendants attack plaintiffs’ claims for breach with three alternative arguments, depending upon the particular allegation, either: (A) that the evidence demonstrates no breach, (B) that plaintiffs’ claims are barred by the contract’s integration clause, the parol evidence rule or the statute of frauds, or (C) that claims based on alleged oral modifications of the contract are unenforceable unless supported by new or additional consideration. Defendants also argue that (1) plaintiffs cannot assert their breach of contract and implied covenant claims against any defendants other than HDF and HDSC, and (2) that neither Pillsbury nor HDSC are liable as a successor to HDF. 1. General Contract Principles In New York, as in every state, the law of contracts provides a remedy only for the nonperformance of agreed terms because “[ejvery man is presumed to be capable of managing his own affairs, and whether his bargains are wise or unwise, is not ordinarily a legitimate subject of inquiry in a court of either legal or equitable jurisdiction.” Parmelee v. Cameron, 41 N.Y. 392, 395 (1869). An unjustified failure to perform as required by the contract’s express terms constitutes a breach. Restatement (Second) of Contracts § 260(2). In addition, a covenant of good faith and fair dealing is implied in contracts which do not involve the sales of goods or employment at will. Van Valkenburgh, Nooger & Neville, Inc. v. Hayden Pub. Co., 30 N.Y.2d 34, 330 N.Y.S.2d 329, 281 N.E.2d 142, cert. denied, 409 U.S. 875, 93 S.Ct. 125, 34 L.Ed.2d 128 (1972). The implied covenant of good faith and fair dealing serves “in aid and furtherance of other terms of the agreement of the parties.” Murphy v. American Home Products Corp., 58 N.Y.2d 293, 461 N.Y.\S.2d 232, 237, 448 N.E.2d 86 (1983). That covenant is breached only when a party to the contract seeks to prevent its performance by, or to withhold its benefits from, the other party. Broad v. Rockwell International Corp., 642 F.2d 929, 957 (5th Cir.1981) (applying New York law), cert. denied, 454 U.S. 965, 102 S.Ct. 506, 70 L.Ed.2d 380 (1981). The covenants do not create independent substantive contractual rights. See, Van Valkenburgh, 330 N.Y. S.2d at 333, 281 N.E.2d at 144. Nor do they create rights inconsistent with those explicitly set out in the contract. Pharmacists’ Ass’n. of Western New York, Inc. v. Blue Cross of Western New York, Inc., 112 A.D.2d 728, 492 N.Y.S.2d 221 (App.Div.1985). A party’s exercise of its contractual rights cannot, by itself, constitute a breach of the implied covenant of good faith and fair dealing. See Mutual Life Insurance Co. v. Tailored Woman, Inc., 309 N.Y. 248, 128 N.E.2d 401, 403 (1955). Thus, plaintiffs’ claims for breach of the implied covenants of good faith and fair dealing must, like the breach of contract claims, be evaluated in light of the defendants’ specific contractual obligations. This is illustrated by Patel v. Dunkin’ Donuts of America, Inc., 146 Ill.App.3d 233, 100 Ill.Dec. 94, 496 N.E.2d 1159 (1986) and Super Valu Stores, Inc. v. D-Mart Food Stores, Inc., 146 Wis.2d 568, 431 N.W.2d 721 (Ct.App.1988). After the franchisor in Patel established a new franchise within one mile of plaintiff's franchise store, plaintiff sued for breach of the franchise agreement and the implied covenant of good faith and fair dealing. The franchise agreement, however, granted the franchisee no territorial exclusivity and explicitly reserved to the franchisor the right to operate or franchise other - stores at its discretion. The court rejected both of the plaintiff's claims, saying: [T]he parties did address the competition issue in the Franchise Agreement by giving defendants the right to establish a new business at its own discretion and on its own terms. Thus, there is no way the implied covenants of good faith and fair dealing can be expanded to bar defendants from opening a new franchise within one mile of plaintiff’s business. 100 Ill.Dec. at 96, 496 N.E.2d at 1161. In Super Valu, the franchisor opened a competing business four blocks from an existing franchisee’s location; ultimately, the franchisee was forced out of business because of the competition. The Franchise Agreement provided that the franchisor retained the right to enter into other franchise agreements at its “sole choice and discretion.” 431 N.W.2d at 723. Rejecting the franchisee’s claim for breach of the implied covenants of good faith and fair dealing, the court said: where, as here, a contracting party complains of acts of the other party which are specifically authorized in their agreement, we do not see how there can be any breach of the covenant of good faith. Indeed, it would be a contradiction in terms to characterize an act contemplated by the plain language of the parties’ contract as a “bad faith” breach of that contract. Id. at 726. 2. The Reach of Plaintiffs’ Contract Claims Only HDF and HDSC are parties to the franchise agreements. Contract or implied covenant claims cannot be asserted unless there is privity of contract between the parties. Buckley v. 112 Central Park So., 285 App.Div. 331, 136 N.Y.S.2d 233 (1954); Greyhound Corp. v. Commercial Casualty Inc., 259 App.Div. 317, 19 N.Y.S.2d 239 (1940). See also, McGowan v. The Pillsbury Co., 723 F.Supp. 530, 537 (D.Wash. 1989) [included as Exh. 66 to Ross Aff. II] (in a parallel Haagen-Dazs franchise action, court dismissed contract claims against all defendants other than HDF and HDSC). On this basis, defendants argue that plaintiffs’ breach of contract claims reach only HDF and HDSC. Plaintiffs limit their response to the contention that Pillsbury and HDSC are successors of HDF and have therefore assumed any liability that may be imposed on HDF for breach of the franchise agreements. In New York, a purchasing corporation is not liable for the debts or liabilities of its predecessor except (1) where the purchaser expressly or impliedly agreed to assume such debts, (2) where the transaction amounted to a consolidation or merger of the corporations, (3) where the purchasing corporation is a “mere continuation” of the selling corporation, or (4) where the transaction is fraudulently done to escape liability for such debts. Hartford Accident and Indemnity Co. v. Canron, Inc., 43 N.Y.2d 823, 825, 402 N.Y.S.2d 565, 373 N.E.2d 364 (1977). See also, Niccum v. Hydra Tool Cory., 438 N.W.2d 96, 98 (Minn.1989) (Minnesota follows same approach); 15 Fletcher Cyc. Corp. § 7122. Plaintiffs claim that questions of fact exist as to both whether HDSC assumed the liabilities of HDF or whether HDSC is a “mere continuation” of HDF. Plaintiffs argue that two documents containing summary descriptions of Pillsbury’s acquisition of Haagen-Dazs create a fact question as to what liabilities were assumed. The language relied on by plaintiffs are two separate single sentence descriptions of the multi-million dollar transaction. The sentence is contained in two documents. The first document is a cover letter dated August 9, 1983 to the Washington State Department of Licensing accompanying papers for the purpose of amending the Haagen-Dazs franchise registration as necessitated by the sale to Pillsbury. Ross Aff. II Exh. 58. The letter states that the amendment “is being filed only to indicate that on July 11, 1983 the business, assets and liabilities of Haagen-Dazs Franchise, Inc. were acquired by The Haagen-Dazs Shoppe Company, Inc.” Id. The second document is a thirty-three page compilation of information for prospective franchisees dated January 1,1985. Ross. Aff. II Exh. 29. The sentence at issue is part of a two-sentence paragraph describing HDSC’s predecessor. It states “[o]n July 11, 1983 The Haagen-Dazs Shoppe Company, Inc. acquired the business, assets and liabilities of Haagen-Dazs Franchise, Inc.” Id. Defendants counter by citing the specific language of the purchase agreement. In its Haagen-Dazs acquisition, Pillsbury agreed to assume only certain specified liabilities of the purchased corporations and the Mattus family. Section l(a)(ii)(B) of the purchase agreement states that Pillsbury agreed to assume “all liabilities and obligations” of the purchased corporations except the following which are not assumed by the Purchaser: (II) liabilities or obligations arising out of any breach by [the acquired comyanies] at any time before or after such Balance Sheet Date and yrior to the Closing of any lease, agreement, contract, arrangement, understanding, ylan or commitment unless and to the extent that such liabilities or obligations are reflected or reserved against in such balance sheet. Affidavit of Jerry W. Levin Exh. C (emphasis added). The balance sheet at issue does not reserve to Pillsbury liability for breach of any scheduled agreement, including the franchise agreements, prior to closing. Levin Aff. par. 5. Thus, the agreement expressly provides that Pillsbury is not assuming liability for breach of those agreements prior to “the Closing.” In light of the specific language of the agreement, the evidence presented by plaintiffs is not sufficient to create a genuine issue of fact about whether Pillsbury assumed liability for any prior breaches of the franchise agreements by HDF. Plaintiffs also argue that successor liability should be imposed on the basis that HDSC is a “mere continuation” of HDF. The “mere continuation” theory refers principally to a reorganization of the original corporation as, for example, may be accomplished through bankruptcy. 15 Fletcher Cyc. Corp. §§ 7122, 7200. It requires a showing that only one corporation survived the transaction and that the successor shares “a common identity” of officers, directors and stockholders with the predecessor. Parra v. Production Machine Co., 611 F.Supp. 221, 223-24 (E.D.N.Y.1985) (applying New York law). See also Tucker v. Paxson Machine Co., 645 F.2d 620, 625-26 (8th Cir.1981) (applying Missouri law). There is no evidence of the requisite identity between HDF and HDSC. Pillsbury, not the Mattuses, owned all HDSC stock after July 11, 1983. The directors and officers of the new Pillsbury subsidiaries were significantly different than those of the corporations owned by the Mattus family. Affidavit of Jonathan L. Eisenberg dated March 29, 1989 par. 2 and Exh. A. The fact that certain members of the Mattus family continued as employees of the Pillsbury subsidiaries is not sufficient to establish that HDSC is merely a reincarnation of HDF. See Bud Antle, Inc. v. Eastern Foods, Inc., 758 F.2d 1451, 1458-59 (11th Cir.1985) (applying Georgia law). 3. The Effect of the Integration Clause The franchise agreements contain the following integration clause: This Franchise contains all oral and written agreements, representations and arrangements between the parties hereto, and any rights which the respective parties hereto may have had under any other previous contracts are hereby can-celled and terminated, and no representation or warranties are made or implied, except as specifically set forth herein. This Franchise cannot be changed or terminated orally. Pentelovich Aff. Exh. F par. 33. The clause provides both that the agreement contains “all oral and written agreements, representations and arrangements between the parties” and that the agreement “cannot be changed or terminated orally.” It has two effects. First, because this language indicates that the parties intended the writing to be final and complete, it invokes the parol evidence rule to bar claims based on prior oral agreements. Second, the language prohibits subsequent oral modification of the contract. Each of these effects will be discussed in turn. Where a writing is a complete and final expression of the parties’ agreement, the parol evidence rule bars evidence of prior or contemporaneous representations from being introduced for the purpose of varying or contradicting the writing. 6 Corbin on Contracts, § 573 at 357 (1960). As noted above, the franchise agreements at issue purport to be a final and complete expression of the parties’ agreement. Plaintiffs argue that the integration clause covers only those issues explicitly addressed within the franchise agreement. This argument ignores the plain language of the integration clause, which states that the franchise agreement “contains all oral and written agreements, representations and arrangements between the parties ... and no representations or warranties are made or implied, except as specifically set forth herein.” Pentelovich Aff. Exh. F par. 33. In addition, the topics that plaintiffs describe as outside the scope of the franchise agreement are addressed by the writing. For example, plaintiffs claim that the franchisee’s right to exclusive flavors is not addressed by the franchise agreement. Plaintiffs’ Memorandum at 67. The franchise agreement, however, does not establish any right to exclusive flavors. Instead, it reserves to the franchisor and the Haagen-Dazs trademark owner the right to distribute Haagen-Dazs products “through ... any ... distribution method which may from time to time be established.” Pentelovich Aff. Exh. F par. 4. Plaintiffs also allege that issues of income and anticipated failure rate are not addressed by the agreement. However, the agreement provides that “Franchisee agrees that no claims of success or failure have been made to him prior to signing this Franchise.” Id. at par. 33. The integration clause at issue in this case serves to invoke the parol evidence rule under New York law. See Leumi-Financial Corp. v. Richter, 17 N.Y.2d 166, 216 N.E.2d 579, 269 N.Y.S.2d 409, 413 (1966). However, the parol evidence rule is applicable only when the issue to be determined can be decided through an interpretation of the writing. See 3 Corbin on Contracts, § 573 at 358-60 (1960). The parol evidence rule does not operate to exclude evidence of fraudulent oral representations by one party to induce another to enter a written contract. Millerton Agway Cooperative, Inc. v. Briarcliff Farms, Inc., 17 N.Y.2d 57, 215 N.E.2d 341, 268 N.Y.S.2d 18 (1966). Parol evidence is also admissible to shed light on ambiguous terms in the contract. Morris v. M