This bill revises the Franchise Practices Act to enhance protections for franchisees in New Jersey. Notably, it removes the previous requirement that gross sales between franchisors and franchisees must exceed $35,000 in the 12 months prior to a lawsuit for the Act to apply, thereby expanding the Act's applicability to more franchise arrangements. The bill introduces several provisions that protect franchisees, including prohibiting franchisors from restricting franchisees' rights to terminate or not renew a franchise with proper notice, and preventing franchisors from imposing excessive damages, personal guarantees for debts, or lengthy employment restrictions post-termination.

Additionally, the bill establishes clear limitations on franchisors' powers, such as prohibiting unreasonable operational requirements and restricting relocations or modifications to once every five years unless certain financial conditions are met. It also addresses potential conflicts of interest by preventing franchisors from receiving commissions from vendors selling to franchisees and requiring them to secure the best prices for goods and services. Furthermore, the bill mandates that franchisors cannot compete in exclusive territories granted to franchisees and cannot dictate court jurisdiction for disputes. Lastly, it imposes a fiduciary duty on franchisors regarding advertising funds collected from franchisees, requiring annual reports on their usage.

Statutes affected:
Introduced: 56:10-4, 56:10-5, 56:10-7