We have discussed the court’s enforcement of the arbitration provision contained in the franchise agreement and the court’s re-affirmation that the New Jersey Consumer Fraud Act does not apply to the sale of franchises. Another noteworthy aspect of the court’s decision is the discussion of the heightened standard under New Jersey law to successfully assert a fraud claim.
Continue Reading Franchisee’s Fraud Claim Rejected Under New Jersey Law

A common question that we receive from our franchisor clients is, “Can we update our FDD and franchise agreement permitting the franchisor to impose fines on franchisees for non-compliance?” The simple answer is that while you can update your documents to permit the imposition of fines, the real question franchisors should be asking is, “Are fines an effective tool to minimize instances of non-compliance with System standards?”…
Continue Reading Are Fines an Effective Tool for Franchisors?

The National Labor Relations Board Office of the General Counsel has created a firestorm in the franchise community with its recent decision that McDonald’s and its franchisees will be treated as joint employers with respect to allegations that they violated the rights of employees. The NLRB’s decision strikes at the heart of the franchising business model, which is based on franchises being independently owned and operated businesses.
Continue Reading NLRB Finds McDonald’s and its Franchisees are a Joint Employer

In last week’s blog posting we discussed the recent decision of Yogo Factory Franchising, Inc. v. Edmond Ying, et al., US District Court D. New Jersey 2014), in which the court enforced the arbitration clause contained in the franchise agreement. Also notable in this case was the court’s decision reaffirming that the New Jersey Consumer Fraud Act did not apply to the sale of franchises.
Continue Reading New Jersey Consumer Fraud Act does not Apply to Sale of Franchises

In Yogo Factory Franchising, Inc. v. Edmond Ying, et al., US District Court D. New Jersey 2014), the court enforced the arbitration clause and held that the arbitration clause should be applied to all the franchisee’s claims arising from the franchise agreement.
Continue Reading New Jersey District Court Enforces Arbitration Provision in Franchise Agreement

The New Jersey Appellate Division recently held that insurance agents were not considered “franchises” under the New Jersey Franchise Practices Act (Mario DeLuca v. Allstate New Jersey Insurance Company (Superior Court of New Jersey, Appellate Division No. A-2724-11T4 (2014)).
Continue Reading Insurance Agents did not Qualify as “Franchises” Under the New Jersey Franchise Practices Act