New Jersey Statutes

N.J. Stat. § 56:10-7 (2026)

Prohibited practices

✓ current as of May 2026

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7. It shall be a violation of this act for any franchisor, directly or indirectly, through any officer, agent or employee, to engage in any of the following practices:

a. To require a franchisee at time of entering into a franchise arrangement to assent to a release, assignment, novation, waiver or estoppel which would relieve any person from liability imposed by this act.

b. To prohibit directly or indirectly the right of free association among franchisees for any lawful purpose.

c. To require or prohibit any change in management of any franchisee unless such requirement or prohibition of change shall be for good cause, which cause shall be stated in writing by the franchisor.

d. To restrict the sale of any equity or debenture issue or the transfer of any securities of a franchise or in any way prevent or attempt to prevent the transfer, sale or issuance of equity securities or debentures to employees, personnel of the franchisee, or spouse, child or heir of an owner, as long as basic financial requirements of the franchisor are complied with, and provided any such sale, transfer or issuance does not have the effect of accomplishing a sale or transfer of control, including, but not limited to, change in the persons holding the majority voting power of the franchise. Nothing contained in this subsection shall excuse a franchisee's obligation to provide prior written notice of any change of ownership to the franchisor if that notice is required by the franchise.

e. To impose unreasonable standards of performance upon a franchisee.

f. To provide any term or condition in any lease or other agreement ancillary or collateral to a franchise, which term or condition directly or indirectly violates this act.

Notes of Decisions

Cited in 29 cases (9 in the last 5 years), 1975–2026 · leading case: Ocean City Express Co. v. Atlas Van Lines, Inc., 194 F. Supp. 3d 314 (D.N.J. 2016).

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Ocean City Express Co. v. Atlas Van Lines, Inc., 194 F. Supp. 3d 314 (D.N.J. 2016). · cites it 11× “2d 618, 628 (1996) (citing N.J.S.A. 56:10-7)); *322 see also Maple Shade Motor Corp.”

Carlo C. Gelardi Corp. v. Miller Brewing Co., 421 F. Supp. 237 (D.N.J. 1976). · cites it 4× “§ 13(a); (5) Miller is attempting to terminate the plaintiff’s franchise without good cause, in violation of § 5 of the New Jersey Franchise Practices Act; and (6) Miller has imposed unreasonable standards of performance upon the plaintiff, in violation of § 7(e) of the…”

Lawmen Supply Co. of N.J., Inc. v. Glock, Inc., 330 F. Supp. 3d 1020 (D.N.J. 2018). · cites it 3× “56:10-5 and engagement in prohibited practices under N.J.S.A. 56:10-7(f). Before reaching the merits of these claims, the Court must first determine whether Plaintiff is entitled to the protections of the NJFPA.”

Regency Oldsmobile, Inc. v. Gen. Motors Corp., 723 F. Supp. 250 (D.N.J. 1989). · cites it 5× “Judge Ackerman in Gelardi cited § 7(e) of the Franchise Act, N.J.S.A. § 56:10-7(e), which prohibits a franchiser from imposing “unreasonable standards of performance upon a franchisee,” and held that constructive cancellation of a franchise violates the Franchise Act: When every…”

Carlo C. Gelardi Corp. v. Miller Brewing Co., 502 F. Supp. 637 (D.N.J. 1980). · cites it 2× “56:10-5 by terminating Gelardi “without good cause” and that Miller violated N.J.S.A. 56:10-7(e) by imposing “unreasonable standards of performance upon” Gelardi.”

Coast Cities Truck Sales, Inc. v. Navistar Int'l Transp. Co., 912 F. Supp. 747 (D.N.J. 1995). · cites it 2× “1989) (construing language of N.J.S.A. 56:10-7(e), which provides that a franchisor may not “directly or indirectly, through any officer, agent or employee .”

Goldwell of New Jersey, Inc. v. KPSS, INC., 622 F. Supp. 2d 168 (D.N.J. 2009). “The Court need not further discuss whether the provision granting full discretion to KPSS to renew or not renew Mid-Atlantic as a distributor is a violation of § 56:10-7, because Mid-Atlantic has not raised the issue.”

Beilowitz v. Gen. Motors Corp., 233 F. Supp. 2d 631 (D.N.J. 2002). · cites it 2× “Under N.J.S.A. § 56:10-7(e), it is a violation of the NJFPA for a franchisor “to impose unreasonable standards of performance upon a franchisee.”

Red Roof Franchising, LLC v. Patel, 877 F. Supp. 2d 124 (D.N.J. 2012). “N.J.S.A. 56:10-7(e). Defendants also generally allege in then-amended complaint that RRF did not have good cause to terminate the franchise agreement, or for nonrenewal, for the following reasons: a.”

Instructional Sys., Inc. v. Comput. Curriculum Corp., 826 F. Supp. 831 (D.N.J. 1993). · cites it 3× “Specifically, pursuant to Section 10-7(e), it is a violation of the Franchise Practices Act for any franchisor “to impose unreasonable standards of performance upon a franchisee.”

Cent. Jersey Freightliner, Inc. v. Freightliner Corp., 987 F. Supp. 289 (D.N.J. 1997). “Plaintiffs also contend that defendant violated NJFPA § 56:10-7(e) which prohibits a franchisor from imposing unreasonable standards of performance upon a franchisee.”

Liberty Lincoln-Mercury, Inc. v. Ford Motor Co., 923 F. Supp. 665 (D.N.J. 1996). · cites it 2× “§ 56:10-15, 2) violation of the NJFPA, N.J.Stat.Ann. § 56:10-7, 3) violation of the Automobile Dealer’s Day in Court Act, 15 U.”

Show all 29 citing cases →

— N.J. Stat. § 56:10-7(a) — 1 case

Bank United, Na. v. First Chatham Bank (D.N.J. 2019).

— N.J. Stat. § 56:10-7(c) — 1 case

Bus. Incentives Co., Inc. v. Sony Corp. of Amer., 397 F. Supp. 63 (S.D.N.Y. 1975).

— N.J. Stat. § 56:10-7(e) — 15 cases

Ocean City Express Co. v. Atlas Van Lines, Inc., 194 F. Supp. 3d 314 (D.N.J. 2016). “2d 618, 628 (1996) (citing N.J.S.A. 56:10-7)); *322 see also Maple Shade Motor Corp.”

Carlo C. Gelardi Corp. v. Miller Brewing Co., 421 F. Supp. 237 (D.N.J. 1976). “§ 13(a); (5) Miller is attempting to terminate the plaintiff’s franchise without good cause, in violation of § 5 of the New Jersey Franchise Practices Act; and (6) Miller has imposed unreasonable standards of performance upon the plaintiff, in violation of § 7(e) of the…”

Carlo C. Gelardi Corp. v. Miller Brewing Co., 502 F. Supp. 637 (D.N.J. 1980). “56:10-5 by terminating Gelardi “without good cause” and that Miller violated N.J.S.A. 56:10-7(e) by imposing “unreasonable standards of performance upon” Gelardi.”

Regency Oldsmobile, Inc. v. Gen. Motors Corp., 723 F. Supp. 250 (D.N.J. 1989). “Judge Ackerman in Gelardi cited § 7(e) of the Franchise Act, N.J.S.A. § 56:10-7(e), which prohibits a franchiser from imposing “unreasonable standards of performance upon a franchisee,” and held that constructive cancellation of a franchise violates the Franchise Act: When every…”

Beilowitz v. Gen. Motors Corp., 233 F. Supp. 2d 631 (D.N.J. 2002). “Under N.J.S.A. § 56:10-7(e), it is a violation of the NJFPA for a franchisor “to impose unreasonable standards of performance upon a franchisee.”

— N.J. Stat. § 56:10-7(f) — 3 cases

Lawmen Supply Co. of N.J., Inc. v. Glock, Inc., 330 F. Supp. 3d 1020 (D.N.J. 2018). “56:10-5 and engagement in prohibited practices under N.J.S.A. 56:10-7(f). Before reaching the merits of these claims, the Court must first determine whether Plaintiff is entitled to the protections of the NJFPA.”

Coast Cities Truck Sales, Inc. v. Navistar Int'l Transp. Co., 912 F. Supp. 747 (D.N.J. 1995). “1989) (construing language of N.J.S.A. 56:10-7(e), which provides that a franchisor may not “directly or indirectly, through any officer, agent or employee .”

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