Integrated Franchise Solutions, Inc. (“Plaintiff”) filed this action for breach of contract, intentional and negligent misrepresentation, fraud, negligence, and rescission against SMTMS II, Inc., on July 19, 2018. This action arises out of Plaintiff’s purchase of the Sport Clips CA 781 franchise store (the “Business”) in early 2017. Plaintiff alleges that after assuming the running of the Business, the revenue was not that as indicated in the profit and loss statements provided by Defendants prior to entering into the contract.
On February 13, 2020, Plaintiff filed its First Amended Complaint (“FAC”) against SMTMS II, Inc. (“Seller”), SMTMS, Inc., Jana Takaoka, Danny Takaoka, Phillip Hosch, and Karen Hosch. The first five causes of action are alleged against all Defendants, and the sixth cause of action for rescission is alleged against SMTMS II, Inc.
On May 26, 2020, Seller, SMTMS, Inc., Jana Takaoka, Danny Takaoka, Phillip Hosch, and Karen Hosch (collectively “Cross-Complainants”) fi