Franchise Law

By Fredrick P. Niemann, Esq. of Hanlon Niemann, a Freehold, NJ Franchise Law Attorney The impairment of franchise rights has been found to constitute irreparable harm in the federal and state courts justifying the imposition of an injunction. In one NJ federal district court case, a preliminary injunction requested an injunction case asserting antitrust violations and breach of a distributorship contract. The court held that ”the loss of business and good will, and the threatened loss of the enterprise itself, constitutes irreparable injury to the plaintiff sufficient to justify the issuance of a preliminary injunction”. The reasoning was subsequently followed in another case where the district court held that” ”[A] judgment for damages acquired years after his franchise has been …

By Fredrick P. Niemann, Esq. a New Jersey Franchise Lawyer New Jersey’s franchise laws are pathetic.  They say very little about the most important issues to franchisees except for franchise terminations.  The New York Franchise Act however provides an exemption to franchisors from the general registration requirements of the Act for what is deemed an “isolated franchise sale.”  Under this exemption, no franchisor is required to register in New York where: (1)   “The transaction is pursuant to an offer directed by the franchisor to not more than two persons . . .  (2)   If the franchisor does not grant the franchisee the right to offer franchises to others,  (3)   A commission or other remuneration is not paid directly or indirectly …

By Fredrick P. Niemann, Esq. a New Jersey Franchise Lawyer Although the FTC-required disclosure documents are mandatory for first-time purchasers of a franchise, there are no required government disclosure documents that must be furnished to the buyer of an existing franchise business. The seller of the franchise is not required to provide the would-be buyer with the franchiser’s disclosure document. You will want to very carefully study the terms of the existing franchise contract between the existing franchise and the franchiser. How long is its remaining term? Is the price reasonable? Will the operator compete with you afterwards? How does it compare with new franchises the franchiser sells to others? Will you be acceptable to the franchiser? Franchisers invariably have …

By Fredrick P. Niemann, Esq. a New Jersey franchise lawyer In New Jersey and throughout all 50 states, the franchise agreement is the cornerstone document of the franchise relationship. It is this document that is legally binding on both parties, laying out the rights and obligations of each party. You will always find attached to the FTC disclosure statement a sample franchise agreement or presented separately. Either way, under Federal law, you are entitled to receive it as a prospective franchisee five business days before signature. You should have it reviewed by a lawyer familiar with New Jersey franchise matters–especially since most agreements are extremely one-sided in favor of the franchiser. No one should enter into a franchise and expect …