FRANCHISE ALERT: Franchisee Associations Cannot Sue Under the Franchise Practices Act in NJ
By: Alan L. Poliner, Esq., Partner
The New Jersey Supreme Court held today that associations of franchisees cannot bring a lawsuit under the NJ Franchise Practices Act (FPA) N.J.S.A. 56:10-1 to -15. The FPA regulates the relationship between franchisors and franchisees in New Jersey.
The New Jersey Coalition of Automotive Retailers (NJCAR) sued Ford Motor Company, alleging violations of the FPA by Ford against its franchisee members. The Supreme Court dismissed for a lack of standing by NJCAR under the FPA.
Associational standing generally allows an association to sue on behalf of its franchisees if there is a justiciable issue or controversy; the individual members would have standing to sue; the issue was relevant to the association’s purpose; and the association does not seek money damages. Here the Supreme Court held there could be no associational standing because of the explicit purpose of the FPA: “to define the relationship and responsibilities of franchisors and franchisees in connection with franchise arrangements and to protect franchisees from unreasonable termination by franchisors that may result from a disparity of bargaining power.” N.J.S.A. 56:10-2. Further, the FPA provides that “[a]ny franchisee may bring an action against its franchisor.” N.J.S.A. 56:10-10.
The Supreme Court held that by using those terms, the Legislature made it evident that a cause of action arising from the FPA must be specific to the individual franchisee-franchisor relationship.
See New Jersey Coalition of Automotive Retailers, Inc. v. Ford Motor Company, __ N.J. __ (July 29, 2025).
