Money damages include the economic loss to the value of the franchisee’s business at the time of the unlawful termination of the practice. If a franchisor violates the FPA, the law gives the franchisee remedies including money damages, court costs, attorneys’ fees and injunctive relief. What are the Legal Consequences of Violating the NJ Franchise Practices Act? A franchisor may not include any terms or conditions which directly or indirectly violate the FPA “in any lease or other agreement ancillary or collateral to a franchise.”.A franchisor may not impose commercially unreasonable standards of performance upon a franchisee.A franchisor may not “restrict the sale, transfer, issuance of stock to employees of the franchisee or to an heir of the estate of the principal owner, as long as basic financial requirements of the franchisor are complied with, and provided any such sale, transfer or issuance does not result in an actual or defacto sale of the franchise.”.A franchisor cannot require or prohibit changes in the management of a franchisee unless it is for a good reason and put in writing.A franchisor may not prohibit franchisees from associating together and each other for a lawful purpose.A franchisor cannot require a franchisee to release the franchisor or any other person from violations and/or liability under the FPA before entering into a franchise agreement.Prohibited Franchise Practices by Franchisors in NJ In New Jersey, franchisors are prohibited from unreasonably interfering with a franchisor’s business.
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