Hoffman did not sue for misrepresentation, and it might well have been quite difficult to show that Red Owl Stores committed negligent or intentional misrepresentation.
A requirement of those causes of action is that Red Owl Stores believed--at the time the representations were made--that they were false.
During the negotiations, when Red Owl Stores assured Hoffman that they would give him a franchise, Red Owl Stores most likely believed that it would do so.