EXISTENCE OF NEW JERSEY DEALER/FRANCHISE TERMINATION, FRAUD AND NON-RENEWAL LAWS AND FRANCHISE INDUSTRY-SPECIFIC LAWS

In New Jersey, the following Dealer/Franchise Termination and Non-Renewal Laws, Fraud, and Franchise Industry-Specific Laws exist:

– New Jersey Does Not Have a Disclosure/Registration Franchise Law
– New Jersey Has a Relationship/Termination Franchise Law
– New Jersey Does Not Have a General Business Opportunity Franchise Law
– New Jersey Has an Alcoholic Beverage Wholesaler/Franchise Law
– New Jersey Does Not Have an Equipment Dealer/Franchise Law
– New Jersey Has a Gasoline Dealer/Franchise Law
– New Jersey Does Not Have a Marine Dealer/Franchise Law
– New Jersey Has a Motor Vehicle Dealer/Franchise Law
– New Jersey Does Not Have a Motorcycle Dealer/Franchise Law
– New Jersey Does Not Have a Recreational and Power Sports Vehicle Dealer/Franchise Law
– New Jersey Does Have a Restaurant Liability Law

New Jersey has a franchise relationship Act entitled the New Jersey Franchise Practices Act, Section 56:10-1 (“NJFPA”).

Sec. 56:10-5, governing terminations, cancellations and non-renewals, is the guts of the NJFPA. This provision directs that “it shall be a violation of this act for any franchisor directly or indirectly through any officer, agent, or employee to terminate, cancel, or fail to renew a franchise without having first given written notice setting forth all the reasons for such termination, cancellation, or intent not to renew to the franchisee at least 60 days in advance of such termination, cancellation, or failure to renew.” This provision is then tempered to some extent by an explicit statutory exemption which excepts from these notice provisions all terminations, cancellations, or non-renewals (1) where the alleged grounds are voluntary abandonment by the franchisee of the franchise relationship in which event the aforementioned written notice may be given 15 days in advance of such termination, cancellation, or failure to renew; and (2) where the alleged grounds are the conviction of the franchisee of an indictable offense directly related to the business conducted pursuant to the franchise in which event the aforementioned termination, cancellation or failure to renew may be effective immediately upon the delivery and receipt of written notice of same at any time following the aforementioned conviction. After setting forth these notice provisions, the NJFPA also bans the specific conduct under scrutiny when it states that it is a violation of this act for a franchisor to terminate, cancel or fail to renew a franchise without “good cause.” The Act then explicitly defines “good cause for terminating, canceling, or failing to renew a franchise as being limited to failure by the franchisee to substantially comply with those requirements imposed upon him by the franchise.

The NJFPA also, in Section 56:10-6, regulates transfers, assignments and sales of franchises, stating that it is a violation of this NJFPA for any franchisee to transfer, assign or sell a franchise or interest therein to another person unless the franchisee first notifies the franchisor of such intention by written notice setting forth in the notice of intent the prospective transferee's name, address, statement of financial qualification and business experience during the previous 5 years. Further, under the Act, the franchisor must also within 60 days after receipt of such notice either approve in writing to the franchisee such sale to proposed transferee or by written notice advise the franchisee of the unacceptability of the proposed transferee setting forth material reasons relating to the character, financial ability or business experience of the proposed transferee. In turn, under the NJFPA, if the franchisor does not reply within the specified 60 days, the franchisee’s approval is deemed granted. Notably, and somewhat unique in the realm of franchise relationship legislation, the NJFPA warns that “no such transfer, assignment or sale hereunder shall be valid unless the transferee agrees in writing to comply with all the requirements of the franchise then in effect.”

Like only a few other states, New Jersey regulates prohibited practices in Sec. 56:10-7 of the NJFPA. In this regard, the NJFPA identifies and prohibits the following franchise 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.

Also, the NJFPA is one of the rare statutes that explicitly sets out defenses for franchisors under the Act. Under Section 56:10-9, the NJFPA provides a defense for a franchisor, to any action brought under this act by a franchisee, if the franchisor establishes that the suing franchisee has failed to substantially comply with requirements imposed by the franchise and other agreements ancillary or collateral thereto.

Last, the NJFPA creates and describes a private cause of action for franchisor violations of the NJFPA. Section 56:10-10 provides that any franchisee may bring an action against its franchisor for violation of the NJFPA to recover damages sustained by reason of any violation of this act and, where appropriate, shall be entitled to injunctive relief. Further, this section allows the franchisee, if successful, to obtain the costs of the action including but not limited to reasonable attorney's fees.

In New Jersey, the following Dealer/Franchise Termination, Fraud and Non-Renewal Laws, and Franchise Industry-Specific Laws, are identified as follows:

New Jersey State Franchise Disclosure/Registration Laws
No statute of general applicability
Franchisors must comply with the FTC franchise disclosure rule

New Jersey State Franchise Relationship/Termination Laws
Franchise Practices Act
New Jersey Revised Statutes, Title 56, Chap. 10, Sec. 56:10-1 through 56:10-29

New Jersey State Business Opportunity Laws
No NJ statute of general applicability in the Business Opportunity Area
Business opportunity sellers must comply with the FTC business opportunity rule

New Jersey Alcoholic Beverage Wholesaler Laws
New Jersey Malt Alcoholic Beverages Protection Act
N.J. Stat. Ann. §33:1-93.9 to §33:1-93.20 .

New Jersey Equipment Franchise/Dealer Laws
New Jersey Has No Franchise Statute in this Particular Market Niche

New Jersey Gasoline Franchise/Dealer Laws
New Jersey Franchise Practices Act; New Jersey Unfair Motor Fuels Practices Act
N.J. Stat. Ann. §56:10-6.1 and §56.10-7.1, N.J. Stat. Ann. §56:6-19 to §56.6-32

New Jersey Marine Franchise/Dealer Laws
New Jersey Has No Franchise Statute in this Particular Market Niche

New Jersey Motor Vehicle Franchise/Dealer Laws
New Jersey Franchise Practices Act
N.J. Ann. Stat. Tit. 56, Chap. 10

New Jersey Motorcycle Franchise/Dealer Laws
New Jersey Has No Franchise Statute in this Particular Market Niche

New Jersey Recreational and Powersports Vehicle Franchise/Dealer Laws
New Jersey Has No Franchise Statute in this Particular Market Niche

New Jersey Restaurants
New Jersey restaurants nutritional labeling law
N.J. Stat. Ann. §26:3E-16 to §26:3E-18

New Jersey Other
New Jersey unemployment compensation law (limousine franchises)
N.J. Stat. Ann. §43:21-19

Goldwell of New Jersey, Inc. v. KPSS, Inc., D.N.J.2009, 622 F.Supp.2d 168, reconsideration denied 2009 WL 1635734 (“a. NJFPA The New Jersey Legislature enacted the NJFPA in 1971 to provide recompense to franchisees when their franchisor-counterparts capitalize on superior economic and bargaining positions. As the New Jersey Supreme Court expressed the problem in Westfield Centre Service, Inc. v. Cities Service Oil Co., 86 N.J. 453, 461–62, 432 A.2d 48 (1981): Though economic advantages to both parties exist in the franchise relationship, disparity in the bargaining power of the parties has led to some unconscionable provisions in the agreements. Franchisors have drafted contracts permitting them to terminate or to refuse renewal of franchises at will or for a wide variety of reasons including failure to comply with unreasonable conditions. Some franchisors have terminated or refused to renew viable franchises, leaving franchisees with nothing in return for their investment. Others have threatened franchisees with termination to coerce them to stay open at unreasonable hours, purchase supplies only from the franchisor and at excessive rates or unduly expand their facilities. The NJFPA curbs such abuse by implementing the following pertinent proscriptions:It shall be a violation of this act for any franchisor directly or indirectly through any officer, agent, or employee to terminate, cancel, or fail to renew a franchise without having first given written notice *185 setting forth all the reasons for such termination, cancellation, or intent not to renew to the franchisee at least 60 days in advance of such termination, cancellation, or failure to renew .... It shall be a violation of this act for a franchisor to terminate, cancel or fail to renew a franchise without good cause. For the purposes of this act, good cause for terminating, canceling, or failing to renew a franchise shall be limited to failure by the franchisee to substantially comply with those requirements imposed upon him by the franchise.... It shall be a defense for a franchisor, to any action brought under this act by a franchisee, if it be shown that said franchisee has failed to substantially comply with requirements imposed by the franchise and other agreements ancillary or collateral thereto.N.J.S.A. §§ 56:10–5; 56:10–9.Before discussing the merits of Mid–Atlantic's NJFPA claim, the Court notes two aspects of the NJFPA that are either not in play here or warrant only fleeting attention. First, KPSS does not argue in its moving brief (though it half-heartedly asserts in its defensive brief) that the RBAs do not create franchises under the NJFPA. The statute defines a franchise as:[A] written arrangement for a definite or indefinite period, in which a person grants to another person a license to use a trade name, trade mark, service mark, or related characteristics, and in which there is a community of interest in the marketing of goods or services at wholesale, retail, by lease, agreement, or otherwise.N.J.S.A. § 56:10–3(a). The RBAs are, without question, written arrangements permitting Mid–Atlantic to utilize the Goldwell brand name in its distribution business. Drawing all reasonable inferences in Mid–Atlantic's favor, the RBAs also establish a community of interest between the parties: the agreements reflect the “symbiotic character of a true franchise arrangement and the consequent vulnerability of [Mid–Atlantic] to an unconscionable loss of [its] tangible and intangible equities.” Instructional Sys., Inc. v. Computer Curriculum Corp., 130 N.J. 324, 341, 614 A.2d 124 (1992) (hereinafter “ISI I ”) (quoting Neptune T.V. & Appliance Serv., Inc. v. Litton Microwave Cooking Prods. Div., 190 N.J.Super. 153, 165, 462 A.2d 595 (App.Div.1983)). The Court finds little merit in KPSS's argument to the contrary. See Def. Opp. Br. at 10–12.Second, Mid–Atlantic does not argue that KPSS failed to provide timely written notice of its intent not to renew the RBAs; it is undisputed that KPSS provided both the initial and supplemental written notices of non-renewal well before the sixty-day deadline to provide such notice.Moving forward, KPSS makes three central arguments in support of its motion for summary judgment as to the NJFPA claim. First, it argues that the NJFPA does not apply to the North Carolina and Multi–State RBAs because they do not concern specific transactions within New Jersey. Def. Br. at 14–15. Second, it argues that Mid–Atlantic's failure to “substantially comply” with the RBAs in various respects provided it “good cause” to not renew the New Jersey RBA (as well as the other RBAs, should the Court not credit its first argument). Third, it argues that it did not “terminate, cancel, or fail to renew” the RBAs by providing notice of its intent not to renew, and consequently Mid–Atlantic's pre-expiration repudiation of the RBAs agreements absolved it of NJFPA liability. The Court discusses each contention in turn.*186 i. Application of NJFPA to Out–of–State RBAs Relevant here, N.J.S.A. § 56:10–4 specifically states that the NJFPA “applies only ... to a franchise ... the performance of which contemplates or requires the franchisee to establish or maintain a place of business within the State of New Jersey ....” N.J.S.A. § 56:10–4(a). The statute defines “place of business” as a “fixed geographical location at which the franchisee displays for sale and sells the franchisor's goods or offers for sale and sells the franchisor's services. Place of business shall not mean an office, a warehouse, a place of storage, a residence or a vehicle.” N.J.S.A. § 56:10–3(f). Because the North Carolina and Multi–State RBAs neither contemplate nor require such a place of business in New Jersey, KPSS argues that the act has no applicability to those agreements. Def. Br. at 15. Further, because the North Carolina and Multi–State RBAs expressly state that they “shall not affect the separate and independent” character of the New Jersey RBA or each other, the agreements must be analyzed independently of each other, thus removing the North Carolina and Multi–State RBAs from the purview of the NJFPA. Id. at 14–15. Mid–Atlantic argues that the NJFPA may be applied extra-territorially, and that in practice, the parties understood and treated the RBAs as one omnibus franchise agreement, thus subjecting the out-of-state RBAs to the NJFPA. Mid–Atlantic correctly states that the New Jersey Supreme Court has approved of extra-territorial application of the NJFPA in some circumstances. See ISI I, 130 N.J. at 366–71, 614 A.2d 124. In ISI I, the New Jersey Supreme Court considered whether the NJFPA could be applied to non-New Jersey activities of a single, New Jersey-based franchise agreement. Id. at 366, 614 A.2d 124. As it considered the legislative history of the NJFPA, it asked: “would the Legislature have intended to protect a New Jersey businessperson who had invested substantial assets in a New Jersey-based hub of a multi-state franchise operation?” Id. at 367, 614 A.2d 124. It answered: “To the extent that it is applicable, the New Jersey Act regulates instate conduct that has out-of-state effects.... [T]he [NJFPA] is applicable only to specific transactions affecting New Jersey, i.e., franchises that have a ‘place of business' in New Jersey.” Id. In holding that the NJFPA could be applied to out-of-state operations of a New Jersey franchise agreement, the court's analysis was limited to a single franchise agreement. It did not consider under which circumstances independent non-New Jersey franchise agreements would implicate the NJFPA simply by virtue of the same parties' execution of an additional New Jersey franchise agreement. Unlike ISI I, the parties here executed three contracts which stated that they were to be viewed as separate transactions, and only one required Mid–Atlantic to establish a place of business in this state. The Court agrees with KPSS that the Third Circuit's analysis in Instructional Sys., Inc. v. Computer Curriculum Corp., 35 F.3d 813, 825 (3d Cir.1994) (hereinafter, “ISI II ”) suggests that multiple franchise agreements executed by the same parties, some of which envision New Jersey activities and some do not, are not necessarily all governed by the NJFPA. In discussing the constitutionality of extra-territorial application of the NJFPA, the Third Circuit emphasized: This is not to say that New Jersey would have a right to apply the NJFPA to any franchise agreement in the country, as long as suit is brought in New Jersey.... In this case the record is *187 clear that it was the parties, not New Jersey, who contemplated that the franchisee maintain a place of business in New Jersey. And it was the parties, not New Jersey, who bound themselves to a [single] exclusive multistate distribution agreement. Therefore, it is the parties' own agreement which operated to project the New Jersey law outside of New Jersey's borders .... Id. Here, only the New Jersey RBA requires a place of business in this state. Unlike ISI II, the parties here formulated a multistate distributorship relationship through multiple, independent contracts, and not under one agreement. As a result, the parties' agreements themselves expressly did not “project the New Jersey law outside of New Jersey's borders.” Id. Mid–Atlantic's has a fall-back position, however. It argues that the parties' post-execution course of conduct was such that in reality, one unified multi-state distributorship agreement existed. In support, it points to its practice of placing aggregated, cross-territorial orders, which KPSS subsequently filled by shipping all ordered products to Mid–Atlantic's New Jersey warehouse and distribution processing center. Pl. Opp. Br. at 4. In further support of its unified franchise argument, Mid–Atlantic argues that when it reported its monthly sales figures to KPSS, “the numbers were reported as the sum for all the territories.” Id. KPSS disputes this by pointing to the fact that Mid–Atlantic actually produced territory-specific reports in 2003 and 2004 before aggregating the numbers thereafter. Further, KPSS argues that it repeatedly requested Mid–Atlantic to submit territory-specific reports. Marino Decl. Exh. F. at 37:9–22. KPSS admits that Mid–Atlantic aggregated its orders and that all Goldwell products that Mid–Atlantic purchased were processed through New Jersey, but it denies that any unified course of conduct had been established by that practice, and rests its argument largely on the RBAs' terms. It also argues that the fact that Mid–Atlantic maintained three separate sales managers and education staffs for the three territories conclusively proves that even Mid–Atlantic regarded the RBAs as distinct. Def. Rep. Br. at 4. Boilerplate terms aside, the evidence about the parties' course of conduct is sufficiently in dispute such that the Court cannot call the issue at this point. While KPSS has adduced evidence suggesting that it never accepted Mid–Atlantic's attempt to unify the agreements, Mid–Atlantic has presented contrasting evidence that KPSS's conduct with respect to filling orders, making shipments, calculating shipments, etc., suggested a single de facto agreement. The significance of these proofs will be more evident after a trial. The Court re-answers in the affirmative the question raised in ISI I: the New Jersey Legislature likely would have intended the NJFPA to apply to franchises which disclaimed connection to New Jersey franchises in the contract, but where the parties nevertheless acted as if the multiple franchises constituted one umbrella agreement. This Court declines to rule as a matter of law on the RBAs' independence provisions when a reasonable observer could conclude that the parties disregarded them in fact. Because the New Jersey RBA required Mid–Atlantic to establish a place of business in this state and the evidence heretofore adduced permits the inference that a single multi-state agreement existed, the Court will not grant KPSS's motion as to NJFPA applicability to the non-New Jersey RBAs. ii. Good Cause 5 As stated above, the NJFPA does not prohibit all failures to renew a franchise agreement; the statute permits a *188 franchisor to forego renewal when it has “good cause” to do so. N.J.S.A. §§ 56:10–5; 56:10–9. Good cause is defined under the act as a franchisee's failure to “substantially comply with those requirements imposed upon him by the franchise.” Id. The parties agree that “ ‘[s]ubstantial compliance’ is surely something less than absolute adherence to every nuanced term of an agreement, but [it]—at a minimum—requires that the franchisee refrain from acting in direct defiance of a term of the [a]greement.” Gen. Motors Corp. v. New A.C. Chevrolet, Inc., 91 F.Supp.2d 733, 740 (D.N.J.2000) (hereinafter “GMC I ”); Def. Br. at 15; Pl. Br. at 29. The parties agree that the concept of “substantial compliance” is simply the absence of a “material breach” of contract. See Gen. Motors Corp. v. New A.C. Chevrolet, Inc., 263 F.3d 296, 317 n. 8 (3d Cir.2001) (hereinafter “GMC II ”); Def. Br. at 16; Pl. Br. at 29. To determine whether KPSS had good cause to not renew the RBAs, therefore, the Court must analyze whether Mid–Atlantic first materially breached their terms. KPSS argues that Mid–Atlantic materially breached the RBAs due to the following, as stated in the initial and supplemental notices of intent not to renew: (1) failure to meet its 2006 sales quotas; (2) marketing unauthorized non-Goldwell products; (3) failure to use best efforts; (4) failure to timely pay all invoices; and (5) failure to meet/maintain minimum staffing and education requirements. Def. Br. at 16–17. Without disputing the factual accuracy of these alleged breaches, Mid–Atlantic argues that “most of these reasons are not applicable because they arose after KPSS repudiated [i.e., provided notice of intent not to renew in July 2007] the Agreements and after Mid–Atlantic was relieved of its obligations under the Agreements.” Pl. Opp. Br. at 5 (underline in original). In other words, Mid–Atlantic asserts that the only potential predicate for good cause is its alleged failure to meet its minimum sales requirements in 2006. See Pl. Opp. Br. at 5–6. The Court agrees that the initial notice of intent not to renew can only be legitimated by good cause based on the alleged failure to meet the 2006 sales quotas. The parties do not materially dispute the actual sales revenues that Mid–Atlantic generated in 2006. At this juncture, the Court will use the numbers provided by Mid–Atlantic, which were as follows: New Jersey:$6,634,170.20 Multi–State: $4,255,414,01 North Carolina: $2,891,743.68 Frankel Aff. ¶ 49; Reino Decl. Exh. G. Mid–Atlantic argues that these raw numbers do not actually reflect the “Net Sales” as required by the RBAs because they do not account for KPSS discounts and giveaways that Mid–Atlantic provided to its salon customers. Mid–Atlantic argues that these discounts must be added back to the raw sales to arrive at “Net Sales” as defined under the RBAs. As the Court stated while recounting the facts, the RBAs define “Net” as “gross sales or gross discounts, as the case may be, calculated net of all promotional discounts and/or products returns.” NJ RBA at 20. The parties further “agreed for purposes [of the RBAs] that the term ‘promotional discounts' as applied to sales (not purchases) shall not include the following discounts that [KPSS] (at its discretion) currently offers: Business Development Fund (“BDF”) credits, chain sales credits, school discount credits, and Goldwell Salon Alliance (“GSA”) rewards credits [ (the “excluded discounts) ].” Id. Thus, Mid–Atlantic argues that because it only reported to KPSS the raw sales numbers that did not take into account the excluded discounts *189 that do not get netted against gross sales, the Court must add back the following excluded discounts to arrive at Net Sales: New Jersey:$784,441.00North Carolina:$123,955.00Multi–State:$536,618.00 Pl. Br. at 29. By all accounts, if these numbers are added back to the gross sales numbers that Mid–Atlantic reported, then Mid–Atlantic satisfied its 2006 quotas for all territories.17 67 An issue regarding interpretation of a contract clause “presents a purely legal question that is suitable for decision on a motion for summary judgment.” Spaulding Composites Co. v. Aetna Cas. & Sur. Co., 176 N.J. 25, 819 A.2d 410 (2003); Driscoll Constr. Co. v. State, 371 N.J.Super. 304, 313–314, 853 A.2d 270 (App.Div.2004). Summary judgment as to the meaning of a contract is improper, however, where the term's meaning is not clear or is reasonably susceptible to more than one interpretation. See Journal Pub. Co. v. American Home Assurance Co., 740 F.Supp. 1015, 1022 (S.D.N.Y.1990) (quoting Record Club of America, Inc. v. United Artists Records, Inc., 890 F.2d 1264, 1270 (2d Cir.1989)); see also Hedges v. Board of Educ. of the Manchester Regional High Sch. Dist., 399 N.J.Super. 279, 291, 944 A.2d 58 (Law Div.2007) (citing Great Atl. & Pac. Tea Co. v. Checchio, 335 N.J.Super. 495, 502, 762 A.2d 1057 (App.Div.2000)). The phrase “calculated net of all promotional discounts” is ambiguous, thus rendering the proper calculation of Mid–Atlantic's 2006 “Net Sales” inappropriate for summary judgment. The phrase does not make clear whether gross sales, when netted against the promotional discounts, are increased or decreased. Because excluded discounts are expressly not promotional discounts to be netted against gross sales, the ambiguity makes it is unclear whether they should be added back to gross sales or appropriately excluded from the net sales calculation. Unsurprisingly, KPSS argues that it makes no sense for Mid–Atlantic to hamstring itself by reporting lower numbers than the RBAs required it to (i.e., without the discounts included). Def. Opp. Br. at 21. But KPSS overlooks the possibility that the sales figures, which both sides generated from raw sales reports submitted to KPSS, did not automatically factor in the excluded discounts at the time of sale. Mid–Atlantic's explanation—that the reports would do not reflect discounts given to customers because they merely show the price for which each product was sold—holds water on summary judgment. The logic behind adding back the excluded discounts also weighs in favor of Mid–Atlantic. The discounts are tools to generate goodwill from loyal Goldwell customers, thereby benefitting KPSS, yet reduce Mid–Atlantic's gross sales. KPSS's proposed calculation method would thus tend to decrease Mid–Atlantic's gross revenues (because it would not take in the value of the discount) and at the same time hamper its ability to meet its sales quotas. The Court is unpersuaded that KPSS prevails on its argument based upon Mid–Atlantic's failure to account for the discounts on its tax returns and financial reports, because the discounts do not affect the revenues which Mid–Atlantic actually generated. Finally, KPSS argues that Mid–Atlantic's argument would permit a net figure to be greater than a gross figure, contrary to the common understanding of the terms. *190 Def. Opp. Br. at 21. The Court rejects this argument as well, and agrees with Mid–Atlantic that the parties were free to alter the common understandings of “net” and “gross” to account for Mid–Atlantic's decreased revenues as a result of the discounts and giveaways attendant with its operations. The calculation method prescribed by the RBAs is reasonably susceptible to two different interpretations, making it impossible to conclude as a matter of law that Mid–Atlantic breached its 2006 minimum sales obligations. Because the Court cannot determine whether Mid–Atlantic breached its obligations in the first instance (let alone materially breached), it follows that summary judgment is improper with respect to whether KPSS had good cause to provide the July 2007 notice of intent not to renew the RBAs.18 As the Court has noted, all of Mid–Atlantic's other asserted material breaches of occurred contemporaneous with or subsequent to KPSS's July 2007 notice. Because good cause cannot be found as to the RBAs 2006 minimum sales requirements alone, it necessarily follows that a genuine issue of material fact exists as to whether good cause existed as of June 13, 2007. That does not end the matter, however; the Court will next discuss whether Mid–Atlantic's post-notice conduct provided supplemental good cause to permit the RBAs to expire without renewal. iii. Notice of Intent Not to Renew Having found that there exists a genuine issue of material fact with respect to good cause as of June 13, 2007, the Court must also analyze whether: (1) Mid–Atlantic's notice of its intent not to renew the RBAs (either the June 13, 2007 oral notice, or the July 13, 2007 written notice) itself is a violation of the NJFPA; and (2) if the answer to the first question is yes, whether Mid–Atlantic's post-violation conduct absolves KPSS of NJFPA liability. For the following reasons, the Court finds that the record evidence is insufficient to permit an answer as a matter of law, and thus will deny the motion. This dispute depends upon whether the initial adverse action (the notice of non-renewal) constitutes an anticipatory repudiation of the RBAs. In this case, Mid–Atlantic asserts that when KPSS provided notice to Mid–Atlantic that it would not renew the RBAs, it anticipatorily violated the NJFPA by signaling a definite and unconditional intention not to renew the agreements.19 In essence, Mid–Atlantic argues that a franchisor's notice of intent not to renew, when given without good cause, constitutes an NJFPA violation at the time of the notice, thus relieving it of its obligations under the agreements. KPSS argues that it literally did not violate the act by providing the notice because it did not “terminate, cancel, or fail to renew” the RBAs, but only signaled *191 its intent to permit the RBAs to expire on their own terms. N.J.S.A. § 56:10–5. Because, it asserts, there was no violation by providing the notice itself, Mid–Atlantic's subsequent failure to maintain the minimum personnel, to conduct the required Goldwell education classes, to refrain from selling competitors' products, etc., provided KPSS with additional good cause, which it documented in its supplemental non-renewal notice. Furthermore, it argues that even assuming that the notice constituted an anticipatory violation of the NJFPA, Mid–Atlantic improperly continued to absorb the benefits of the RBAs, yet failed to respond to its corresponding obligations. The posture of this case presents the Court with a unique question: does an NJFPA claim lie where a franchisor declares unequivocally its intent not to renew a franchise agreement and the franchisee then treats the notice as a repudiation because it believes the franchisor lacks good cause? KPSS argues that because the written notices that it provided to Mid–Atlantic expressly stated that KPSS would continue to comply with the RBAs until they expired, Mid–Atlantic continued to be bound thereby as well. This view, however, gives insufficient attention to the goals which the NJFPA seeks to achieve. Where franchisors are in a superior bargaining position, an unequivocal notice of intent not to renew is no different from the actual failure to renew that is bound to follow. Arguably, the franchisee is placed in a worse position where, as here, it is faced with a Hobson's choice of courting other manufacturers with which to do business (but which runs the risk of violating the extant-but-soon-to-expire agreement), or of continuing to abide by the agreement at the expense of losing its substantial investment when the un-renewed agreement expires. 8 The Court is unprepared to find that a franchisee remains exclusively wedded to a franchisor when the latter provides a notice of intent to allow the franchise agreement to expire on its own terms without good cause. Doing so would contravene the clear purpose of the NJFPA to protect franchisees who have invested substantial capital in furthering a franchise. On these facts, the Court concludes that a claim under the NJFPA will lie where a franchisor provides unequivocal notice of is intent not to renew the franchise, and the franchisee treats such a notice as a repudiation. Cf. Westfield Centre Service, Inc. v. Cities Serv. Oil Co., 158 N.J.Super. 455, 469, 386 A.2d 448 (Ch.Div.1978) (finding violation of NJFPA in part because franchisor provided notice of intent to terminate irrespective of franchisee's future viability). 9 KPSS argues that even if an anticipatory repudiation theory lies under the NJFPA, the record definitively shows that Mid–Atlantic in fact did not treat the RBAs as terminated because it continued to take advantage of the RBAs where it was to Mid–Atlantic's benefit. KPSS asserts that Mid–Atlantic may not treat the RBAs as terminated for purposes of avoiding its own obligations on the one hand, yet simultaneously continue to reap the benefits of the agreements by treating them as extant on the other. Thus, even if KPSS's notice of intent not to renew did constitute an anticipatory repudiation, it argues that Mid–Atlantic's own conduct precludes it from relying on that repudiation. It is undisputed that after KPSS provided Mid–Atlantic oral notice of its intent not to renew the RBAs on June 13, 2007, Mid–Atlantic assured KPSS that it would fulfill its obligations under the RBAs, and then continued to order Goldwell products from KPSS for purposes of resale (including more than $300,000 worth *192 of Goldwell products the same day it commenced this action). Mid–Atlantic continued to sell Goldwell products even after the RBAs had expired, well into 2008, yet now argues that it had treated the contracts as terminated as a result of KPSS's June 13, 2007 oral notice of non-renewal. Relying on “basic contract principles,” the Third Circuit has admonished non-breaching parties that they may not treat repudiated contracts as terminated and alive as they see fit: [W]hen one party to a contract feels that the other contracting party has breached its agreement, the non-breaching party may either stop performance and assume the contract is avoided, or continue its performance and sue for damages. Under no circumstances may the non-breaching party stop performance and continue to take advantage of the contract's benefits. Pappan Enters. v. Hardee's Food Sys., 143 F.3d 800, 806 (3d Cir.1998) (quoting S & R Corp. v. Jiffy Lube Int'l, Inc., 968 F.2d 371, 376 (3d Cir.1992)); Ramada Franchise Sys. v. Eagle Hospitality Group, No. 03–3585, 2005 WL 1490975, at *9–10, 2005 U.S. Dist. LEXIS 45102, at *28 (D.N.J. June 24, 2005). Mid–Atlantic responds to these cases with the following argument: they “do [ ] not stand for the proposition that a non-breaching party loses its breach of contract claims if it stops performance of its obligations under the contract before notifying the repudiating party that it has elected its right to avoid performance of the contract.” Pl. Rep. Br. at 11. Further, Mid–Atlantic argues that no “party is under any obligation to perform under a contract once the repudiating party announces that it will not honor the remainder of the contract.” Id. at 10. Assuming that KPSS repudiated the RBAs, Mid–Atlantic was indeed under no obligation to continue to perform under them. Once it determined that it would continue to benefit therefrom, however, it was not permitted to forsake its obligations thereunder. In S & R, the Third Circuit reversed the district court's denial of a franchisor's application to preliminarily enjoin a terminated franchisee's continued use of the franchisor's marks when it discontinued paying royalty fees to the franchisor. S & R, 968 F.2d at 373, 379. Quoting Burger King v. Austin, Bus. Fran. Guide (CCH) para. 9788 at 22,069 (S.D.Fla. Dec. 26, 1990), the Third Circuit stated the following: Although Defendants may prevail on their breach of contract claims, thus excusing them from paying the amounts currently due and perhaps entitling them to further damages, the Court cannot see how this separate cause of action entitles them to continued rights under the franchise agreement. In order to have preserved their right to recover for the alleged breaches and to continue to use the [Plaintiff's] trademark, Defendants should have continued to pay royalties, advertising expenses and rent. S & R, 968 F.2d at 376 (quoting Burger King ) (emphasis in S & R ). Under that analysis, Mid–Atlantic could not continue to obtain the benefits of its bargain upon a perceived repudiation, discontinue performance, and then retroactively argue that it in fact treated the repudiated contract as terminated. That being said, the discussion in S & R, Burger King, and Pappan was about whether an injunction should issue as a result of a franchisee's continued trademark use without paying royalties. The Third Circuit in S & R concluded its discussion by stating the following: In sum, [plaintiff] has done exactly what contract law forbids. Feeling that [defendant] had violated its duty to him, *193 [plaintiff] stopped making royalty payments, but he continued to operate the service centers under the [defendant's] name.... [Plaintiff] did not pay royalties after early 1989; [defendant] gave [plaintiff] 60 days to cure the default, and when [plaintiff] did not respond the franchises were terminated.... [Plaintiff] still may have a legitimate claim for damages, but he does not have the right to continue using the trademark as an infringer. S & R, 968 F.2d at 377. The Court agrees that Mid–Atlantic has not lost its claim under the NJFPA as a result of failing to uphold its obligations under the RBAs; rather, the parties' competing theories of breach concern the remedies (i.e., extent of damages) flowing from the facts as the jury will find them in this case. See McDonald's Corp. v. Robert A. Makin, Inc., 653 F.Supp. 401, 403 (W.D.N.Y.1986) (stating that the defendants' counterclaims will be adjudicated in their own right, but the “alleged wrongs of plaintiff do not constitute affirmative defenses to defendants' non-payment of franchise fees”). Absolving KPSS of potential NJFPA liability because of an unlawful response to the repudiation would be contrary to the purposes of the NJFPA. Given the dependent nature of liability based on the material issues of fact the Court has discussed, summary judgment under the NJFPA is inappropriate.”)

Maintainco, Inc. v. Mitsubishi Caterpillar Forklift America, Inc., 408 N.J.Super. 461, 975 A.2d 510 (A.D.2009), certification denied 200 N.J. 502, 983 A.2d 1110 (“The trial court found that defendant's conduct was geared to terminating plaintiff's franchise, and, but for plaintiff's filing of this action, defendant would have succeeded. With respect to this issue, defendant invites us to “accept arguendo that [it] expressed a desire to be rid of Maintainco; that it appointed Mid-Atlantic as a second dealer hoping to ‘destroy’ Maintainco's franchise; or even that these acts would have breached the Agreement.” Defendant argues that the Act prohibits only actual termination, and, because plaintiff was never terminated, there was no violation. Defendant argues that the Act does not contemplate the concept of constructive termination as a violation. The trial court disagreed. It found that defendant's conduct was geared to terminating plaintiff as a franchisee, and, indeed, its January 5, 2000 letter to plaintiff was a termination letter. The record establishes that defendant's officers were well aware that the Act prohibited them from terminating plaintiff unless they could establish good cause. Their efforts to create the appearance of substantially deficient performance by plaintiff, i.e. good cause, failed. Their conduct was therefore geared to forcing out plaintiff. The court found that defendant's effort was thwarted only by virtue of plaintiff's filing of this action, and that defendant's conduct constituted an impermissible constructive termination. We agree. 23 The Act is remedial legislation. Kubis & Perszyk Assocs. v. Sun Microsystems, Inc., 146 N.J. 176, 193, 680 A.2d 618 (1996). Its objectives are “protecting franchisees from the superior bargaining power of franchisors and providing swift and effective judicial relief against franchisors that violate” its provisions. Ibid. *476 A franchisee may seek recovery for any harm it suffered “by reason of any violation of this act.” N.J.S.A. 56:10-10. For any claim, the franchisor may assert as a defense that “said franchisee has failed to substantially comply with requirements imposed by the franchise and other agreements ancillary or collateral thereto.” N.J.S.A. 56:10-9. See, e.g., Dunkin' Donuts v. Middletown Donut Corp., 100 N.J. 166, 171-73, 495 A.2d 66 (1985) (franchisee's deliberate underreporting of sales, which it refused to cure, was a material breach justifying termination); Simmons v. Gen. Motors Corp., 180 N.J.Super. 522, 539-41, 435 A.2d 1167 (App.Div.) (sale by car dealer of its franchise without the required notice or permission of the manufacturer-franchisor to a purchaser with a bad reputation “who was justifiably found unacceptable to the franchisor ... constituted a ‘substantial breach’ of [the franchisee's] obligations under the franchise agreement,” and thus provided statutory grounds for termination), certif. denied, 88 N.J. 498, 443 A.2d 712 (1981); Gen. Motors **519 Corp. v. New A.C. Chevrolet, 91 F.Supp.2d 733, 738-41 (D.N.J.2000) (addition by Chevrolet dealer of a Volkswagen franchise at its premises without permission of the manufacturer-franchisor constituted failure of substantial compliance with the agreement's reasonable terms, justifying termination), aff'd, 263 F.3d 296 (3d Cir.2001). By contrast, plaintiff did not fail to substantially meet the performance requirements imposed by its agreement. Defendant did not have good cause to terminate plaintiff, and it knew it. That is why, rather than directly and unambiguously terminating plaintiff, it engaged in a course of conduct geared to forcing out plaintiff. 45 In the absence of a substantial failure of franchisee compliance, the statutory requirement of “good cause” prohibits a franchisor from terminating for other reasons, even if they reflect a sound and nondiscriminatory business strategy. Westfield Centre Serv., Inc. v. Cities Serv. Oil Co., 86 N.J. 453, 460-61, 432 A.2d 48 (1981). Accord Cooper Distributing Co. v. Amana Refrigeration, Inc., 180 F.3d 542, 545 (3d Cir.1999). In Westfield, supra, 86 *477 N.J. at 465-66, 432 A.2d 48, the Court held that the Act did not preclude nonrenewal for a good faith business reason, but falling short of good cause, the franchisor would be required in those circumstances to pay the franchisee the reasonable value of its business. Thus, a franchisor acting in good faith for a bona fide business reason who terminates or fails to renew a franchise “for any reason other than the franchisee's substantial breach of its obligations has violated N.J.S.A. 56:10-5 and is liable to the franchisee for the loss occasioned thereby, namely the reasonable value of the business less the amount realizable on liquidation.” Id. at 469, 432 A.2d 48. The Legislature's decision not to recognize a valid business reason as “good cause” for termination distinguishes the Act from the less-protective franchise statutes in other states. For example, in Petereit v. S.B. Thomas, Inc., 63 F.3d 1169, 1185-87 (2d Cir.1995), cert. denied, 517 U.S. 1119, 116 S.Ct. 1351, 134 L.Ed.2d 520 (1996), the Second Circuit observed that an amendment to Connecticut's statute eliminated its equivalence to N.J.S.A. 56:10-5 by altering the definition of “good cause” to include “a franchisor's legitimate business reasons” as well as a franchisee's material breach of the agreement.   In this case, Wuench asserted that the new performance standard for multi-line dealers of matching Mitsubishi's national market share was a test of whether they were “a hundred percent committed to us.” It was also a signal that, if they were not so committed, they should “decide to do a hundred percent something else.” However, even if defendant really was applying that new standard to all multi-line dealers for a valid business purpose, its absence from plaintiff's agreement meant that plaintiff's failure to satisfy it would not have been good cause for termination. The cases discussed above involved an actual termination, or an attempted termination that was prevented only by legal action. They did not address potential liability of a franchisor under the Act for a constructive termination. Defendant provides no persuasive *478 authority to support its argument against liability for constructive termination. **520 The Act accommodates the common law of contract to some extent, by recognizing the validity of all reasonable standards of performance to which the parties may have agreed and the franchisor's right to enforce substantial compliance with them. N.J.S.A. 56:10-5, -7(e), -9. The doctrine of constructive termination is also part of contract law, rather than a statutory invention. See, e.g., Daniels v. Mut. Life Ins. Co., 340 N.J.Super. 11, 17-18, 773 A.2d 718 (App.Div.) (noting that unlike express termination, constructive discharge occurs when a reasonable employee feels compelled to resign because of an employer's conduct, certif. denied, 170 N.J. 86, 784 A.2d 719 (2001)). And, the Act prohibits a franchisor from “indirectly” terminating a franchise without good cause. N.J.S.A. 56:10-5. 6 In addition to arguing that constructive termination is not actionable under the Act, defendant contends it did not act to commit a constructive termination. We agree with the trial court's finding that this contention is disingenuous. Defendant's letter of January 5, 2000 was a declaration of intent to terminate plaintiff once defendant found a new dealer. Defendant's later assertion that the letter was merely a suggestion was an obvious revision of history. Wuench admitted that stopping the sale of forklifts and parts would have ended plaintiff's Mitsubishi business. Defendant's decision to stop providing annual business plans was further evidence that it expected to abandon plaintiff in favor of another dealer. The court was therefore correct to find that such conduct, headed off only by judicial action, would have terminated plaintiff's franchise. 78 We reject defendant's position that if plaintiff wanted to claim damages under the Act for termination it was required to *479 withdraw from the agreement and thus allow itself to be “terminated.” Such a requirement would fly in the face of the Act's purposes of leveling the playing field between the typically more powerful franchisor and less powerful franchisee, and providing measures to protect franchisees from oppressive conduct by franchisors. Kubis, supra, 146 N.J. at 193, 680 A.2d 618. We conclude that “termination” in the Act includes constructive termination in accordance with traditional contract law principles. To conclude otherwise would undercut the remedial purposes of the Act by allowing a franchisor to engage in such blatant attempts to “ditch,” or constructively terminate, a franchisee, but escape liability under the Act because it did not entirely succeed. Whether the loss of exclusivity, in and of itself, qualifies as constructive termination is another question that has not been decided in New Jersey. However, a New York federal court applying New Jersey law found that it can be. Carlos v. Philips Bus. Sys., 556 F.Supp. 769, 774-76 (E.D.N.Y.), aff'd, 742 F.2d 1432 (2d Cir.1983). In Carlos, the franchisor had a “two tier marketing system consisting of dealers and exclusive distributors.” Id. at 770. The plaintiff started as a dealer and then became an exclusive distributor for southern New Jersey. Id. at 770-71. The District Court held that, for a franchisee that actually enjoys a contractual right of exclusivity, the franchisor's offer to renew only if the franchisee agrees to become a nonexclusive dealer is not merely a “change” in the agreement's terms. Id. at 775-76. It found that the franchisor intended “to streamline its marketing system by eliminating exclusive distributors ... in order to more profitably exist in a changing marketplace,” and that the supposed “change” was “essentially a termination or failure to renew this distributorship agreement.” Id. at 776. We agree **521 with this reasoning. The “change” that defendant proposed for plaintiff upon Mid-Atlantic's appointment would have gone even further, because instead of simply establishing Mid-Atlantic as a second dealer in the territory, defendant would have eliminated plaintiff as a dealer by ending its ability to purchase new forklifts and parts. In Petereit, supra, 63 F.3d at 1181, the Second Circuit applied the original version of the Connecticut statute, which “provides a franchise may be terminated only for good cause and in accordance with certain notice requirements.” (Carlos noted that the original version was “virtually identical” to N.J.S.A. 56:10-5. Carlos, supra, 556 F.Supp. at 776.) Under that statutory language, changes to the boundaries of a dealer's exclusive territory might be a termination without good cause even if they would not amount to constructive termination at common law. Petereit, supra, 63 F.3d at 1181-82. The Second Circuit rejected the proposition “that any negative impact on franchise income resulting from the franchisor's realignment of territories is alone sufficient to be deemed a termination.” Id. at 1182. Instead, it required the franchisor's action to “result in a substantial decline in franchisee net income.” Id. at 1183. The loss of exclusivity would be prohibited only if it were likely to cause or contribute to such a decline. See ibid. The Second Circuit relied in part on the remedial purpose of Connecticut's statute in holding that Connecticut courts would apply it to constructive terminations, and the opinion does not suggest that constructive termination should be determined under different standards than those of contract law. Id. at 1181-83. In this case, defendant's conduct proved defendant's intent for the cessation of exclusivity to undermine plaintiff's franchise. Defendant attempted to establish Mid-Atlantic as the only viable dealer in the territory. Defendant let Mid-Atlantic begin operating as a dealer on the strength of just a letter agreement, more than two years before it entered into a proper dealership agreement. Defendant appointed Mid-Atlantic and blanketed plaintiff's territory with the message that Mid-Atlantic was its favored Mitsubishi dealer in all regards, without informing plaintiff. It provided discounts, rebates, and other subsidies that let Mid-Atlantic undercut plaintiff's prices. It showed unique forbearance in letting Mid-Atlantic continue to buy forklifts without paying for them, to “steal” them, and it continued indulging Mid-Atlantic by trying to assist its reorganization after it went bankrupt. Defendant further demonstrated the strength of its intention to make plaintiff resign after losing exclusivity, by developing the platform strategy in response to its realization that New Jersey law forbade termination of a dealer with satisfactory performance. It proposed various arrangements to many of the major Mitsubishi and Caterpillar dealers in the northeast, keeping them secret only from plaintiff, whose exclusion was the one constant element. It then pursued the platform strategy for years with little progress, until it had to admit the impossibility of financing it. Wuench all but admitted that his various “suggestions” that plaintiff demonstrate absolute commitment to the Mitsubishi brand were actually statements that plaintiff should resign to spare defendant the trouble of termination. In sum, New Jersey franchise law would have allowed defendant to terminate plaintiff's franchise only if it had “good cause” consisting of plaintiff's failure substantially to perform its contractual obligations. Defendant was otherwise powerless to terminate plaintiff, no matter what good business **522 reasons it may have had for seeking arrangements that did not respect plaintiff's contractual rights. The record supports the trial court's finding that defendant would have terminated plaintiff's franchise but for this litigation, and that defendant's conduct violated the Act.”)

 General Motors Corp. v. New A.C. Chevrolet, Inc., D.N.J.2000, 91 F.Supp.2d 733, affirmed 263 F.3d 296 (“GM's Count III and New AC's Counts II and III: 3 GM seeks a declaratory judgment that termination of the Agreement was not a violation of N.J.S.A. 56:10-1 et. seq., the New Jersey Franchise Practices Act (“NJFPA”), and New A.C. seeks a decision that GM's termination of the Agreement was a violation of the NJFPA. New A.C. claims that the termination was without good cause and that the Agreement imposed an unreasonable standard of performance upon New A.C. 4 The Act's definition of “good cause” does not support New A.C.'s claim: “It shall be a violation of this act for a franchisor to terminate, cancel or fail to renew a franchise without good cause. For the purposes of this Act, good cause for terminating, canceling, or failing to renew a franchise shall be limited to failure by the franchisee to substantially comply with those requirements imposed upon him by the franchise.” N.J.S.A. 56:10-5 (emphasis added). As has been discussed at length above, New A.C.'s decision to add a Volkswagen franchise to the location and premises devoted to the Chevrolet franchise without GM's authorization was a failure to substantially comply with the terms of the Agreement. “[S]ubstantial compliance” is surely something less than absolute adherence to every nuanced term of an agreement, but substantial compliance-at a minimum-requires that the franchisee refrain from acting in direct defiance of a term of the Agreement. This is especially true when, as here, the franchisee has received specific notice from the franchisor that its behavior is a violation of the agreement. See Jiffy Lube Int'l Inc. v. Weiss Bros., Inc., 834 F.Supp. 683, 689 (D.N.J.1993) (“a franchisee's failure to comply with the terms of the franchise agreement justifies termination of the agreement by the franchisor”); see also Dunkin' Donuts of America v. Middletown Donut Corp., 100 N.J. 166, 495 A.2d 66, 72 (1985). This Court finds that, under the facts of this case, New A.C.'s unilateral unauthorized decision to dual market Chevrolet and Volkswagen constitutes “good cause” to justify termination. See Brattleboro Auto Sales, Inc. v. Subaru of New England, Inc., 633 F.2d 649, 652 (2d Cir.1980); see also Simonds Chevrolet, Inc. v. General Motors Corp., 564 F.Supp. 151 (D.Mass.1983) (plan to dual franchise a reasonable criterion used by manufacturer to reject a proposed purchaser).10 New A.C.'s counterclaim alleges that the terms of the Agreement imposed upon New A.C. unreasonable standards of performance in violation of the NJFPA. Although New A.C.'s brief in opposition to GM's motion for summary judgment does not address this issue, the Court finds that GM is entitled to summary judgment on this claim. Facts have not been adduced to demonstrate that the standards imposed upon New A.C. by the Agreement are unreasonable. GM has provided ample evidence demonstrating the reasonableness of the requirements under the Agreement and of its continual attempts to support and assist the New A.C. franchise in complying with the Agreement. Based on the factual record, summary judgment on this count will be entered in favor of GM.”)

Amerada Hess Corp. v. Quinn, 143 N.J.Super. 237, 362 A.2d 1258 (1976) (“In New Jersey a franchise relationship may only be terminated upon a finding of ‘good cause’ which, in turn, means finding that the franchisee has failed to substantially perform his obligations under the franchise compact, here consisting of the ‘Dealer Lease’ and ‘Dealer Franchise Agreements.’ The Franchise Practices Act, N.J.S.A. 56:10—5, provides: It shall be a violation of this act for a franchisor to terminate, cancel or fail to renew a franchise Without good cause. For the purposes of this act, good cause for terminating, cancelling, or failing to renew a franchise shall be limited to failure by the franchisee to Substantially comply with those requirements imposed upon him by the franchise. (Emphasis supplied) Further, and independent of the Franchise Practices Act, our highest court, in Shell Oil Co. v. Marinello, 63 N.J. 402, 307 A.2d 598 (1973), cert. den. 415 U.S. 920, 94 S.Ct. 1421, 39 L.Ed.2d 475, dealing with a lease antedating the effective date of the statute and thus ‘not directly controlled by it,’ stated the following: *251 We hold (1) that the lease and dealer agreement herein are integral parts of a single business relationship, basically that of a franchise, (2) that the provision giving Shell the absolute right to terminate on 10 days notice is void as against the public policy of this State, (3) that said public policy requires that there be read into the existing lease and dealer agreement, and all future lease and dealer agreements which may be negotiated in good faith between the parties, the restriction that Shell not have the unilateral right to terminate, cancel or fail to renew the franchise, including the lease, in absence of a showing that Marinello has failed to substantially perform his obligations under the lease and dealer agreement, i.e., for good cause, * * *. (at 410—411, 307 A.2d at 603) The underlying aim of the Franchise Practices Act and Marinello, supra, is to protect the franchisee from undue usurpation of his franchise while yet allowing franchisor to protect its trade **1266 name, trademark and good will interests in the franchise arrangement. With that in mind, the substantiality of a franchisee's noncompliance, as a legal concept, must be gauged in light of its effect upon or potential to affect the franchisor's trade name, trademark, good will and image which, after all, is the heart and substance of the franchising method of doing business. The public could hardly escape awareness of a substantial increase with consequent  unwarranted adverse stress on the Hess trademark. That Hess must constantly police its franchise structure in order to protect its good will and image for the benefit of all is made plain from the evidence. Defendant's overcharge might be but an isolated instance. However, the welfare of the franchise structure requires that Hess take such action, the minor effect of which is to terminate plaintiff, but the major effect of which is to protect and preserve the good will and image shared by itself and all of its franchisees. In this context defendant's failure to observe and comply with all laws, ordinances and regulations covering his business amounted to a substantial dereliction having an adverse impact upon Hess' trade name, trademark and good will. Hence, good cause for termination is manifest. Defendant contends that the extent of the overcharge might escape attention or cause only slight upset and, *252 therefore, is insubstantial in the actual or potential impact of the franchisee's derelictions upon the franchisor's ‘trade name, trademark, good will and image.’ Quinn argues that since no notoriety arose out of the Federal Energy Administration investigation into his overcharge and there were no complaints from the public regarding his prices at any time nor any newspaper publicity associated with the same, his willful overcharge had no or little effect upon Hess' trade name, trademark, good will and image, thus precluding a finding of substantial noncompliance allowing termination. Reason and common sense require rejection of this contention. A franchisor, such as Hess here, has interest in a particular franchisee's performance broader than the mere protection and enhancement of its trade name, trademark and the good will attached thereto, though these are, of course, important. The franchisor also has an interest in the marketing of its products, here gasoline and motor oil, through the franchise, and a franchisee's breach of his reasonable obligations thereunder, proved to have adversely impacted the volume of the franchisor's goods sold through the franchisee, would substantially impair that interest so as to justify termination. But more basic than this, it is the opinion of the court that a franchisee who has willfully violated the statutes and regulations governing the operation of his business Contra the terms of the franchise agreement, has failed to substantially perform his franchise obligations within the intendment of the Franchise Practices Act, N.J.S.A. 56:10—5 and Marinello, supra. The concept of substantial performance is an equitable one generally utilized in the realm of building contracts but applied, where appropriate, to other contractual agreements as well. It allows one who has performed in good faith, though making some slight omissions or deviations from the letter of the contract or its specifications, so as to provide the other party substantially what he bargained for, to recover the contract price less a sum sufficient to compensate the other party for or cover correction of the defective aspects *253 of his performance. 6 Williston on Contracts (3 ed.), s 842 at 169; Damato v. Leone Const. Co., 41 N.J.Super. 366, 371—372, 125 A.2d 302 (App.Div.1956); Jardine Estates v. Donna Brook Corp., 42 N.J.Super. 332, 337—338, 126 A.2d 372 (App.Div.1956). It rests on principles of fairness well expressed by the court in Mort Co. v. Paul, 167 Pa.Super. 532, 76 A.2d 445, 447 (Super.Ct.1950), quoting from **1267 Gillespie Tool Co. v. Wilson, 123 Pa. 19, 26, 16 A. 36, 37 (Sup.Ct.1888): The equitable doctrine of substantial performance is intented for the protection and relief of those who have faithfully and honestly endeavored to perform their contracts in all material and substantive particulars, so that their right to compensation may not be forfeited by reason of mere technical or unimportant omissions or defects. It is this principle that has been carried into the franchise milieu by the ‘good cause’ requirement for termination. The franchisor's superior bargaining position in the relationship was recognized, along with the inevitable intertwining of the franchisee's livelihood with the franchise, at least for one who has expended time, effort and often money in its prospering. The inequity of allowing the franchisor to terminate the relationship, pursuant to contractual clauses drafted by it, meaning less to the franchisee and the inclusion of which the franchisee was powerless to prevent, where the franchisee had sought to and substantially did meet his duties under the agreement to the benefit of the franchisor, was patent. It was this situation that was addressed by the Legislature and our Supreme Court in Marinello. Thus, the statement appended to the Assembly Bill No. 2063, stated that the law would: * * * rule out Arbitrary and Capricious cancellation of franchises while preserving the right of franchisors to safeguard their interests through the application of clear and nondiscriminatory standards. The bill would protect the substantial investment—tangible and intangible—of both parties in the various franchises. It would rule out economic coercion as a business tactic in this most sensitive field. (Emphasis supplied) In Marinello it was noted: *254 However, the Act reflects the legislative concern over long-standing abuses in the franchise relationship, particularly provisions giving the franchisor the right to terminate, cancel or fail to renew the franchise. To that extent the provisions of the Act merely put into statutory form the extant public policy of this state. (63 N.J. at 409, 307 A.2d at 602.) See also, Judge Gelman's review in the lower court opinion in Marinello, 120 N.J.Super. 357 at 371—374, 294 A.2d 253. The evident purpose of the statutory and common law termination requirements, then, is the protection of franchisees who have conscientiously striven to carry out their obligations under the franchise agreement. They were not intended to prevent the severance of those who deliberately disregard reasonable requirements contained in their contract with the franchisor. Certainly, they were not designed to shield those who willfully violate the laws regulating their business, in contravention of the franchise terms. No reason, grounded in logic, fairness or public policy, presents itself for denying the franchisor the right to terminate the franchise under circumstances such as found here. Rather, protection of the public's welfare points toward termination of dishonest franchisees. To deny Hess the right to terminate here would be to put the stamp of approval upon the deliberate illegal behavior of defendant, pervert the spirit of the ‘good cause’ requirement and allow defendant to flagrantly flaunt his disregard for the law, his private contracts and the public interest. Such an absured result cannot be deemed to have been contemplated or intended by the Legislature. Schierstead v. Brigantine, 29 N.J. 220, 230, 148 A.2d 591 (1959), Smith v. Bergen Cty. Bd. of Chosen Freeholders, 139 N.J.Super. 229, 237, 353 A.2d 153 (Law Div.1976); In re Summit and Elizabeth Trust Co., 111 N.J.Super. 154, 168—169, 268 A.2d 21 (App.Div.1970). The court therefore finds that defendant's deliberate violation of the federal pricing regulations, Contra the mandates of the Dealer Lease and Dealer Franchise Agreement, constitutes, as a matter of law, substantial noncompliance *255 with his obligations under the franchise so as to allow termination thereof.”)

Texaco, Inc. v. Appleget, 63 N.J. 411, 307 A.2d 603 (1973) (“PER CURIAM. We have this day decided Shell Oil Company v. Marinello, 63 N.J. 402, 307 A.2d 598 in which we held that the public policy of this State restricts the unilateral right of an oil company to terminate, cancel or fail to renew a lease and dealer agreement with one of its service station operators to a situation where ‘good cause’ for such action exists. This requires that the judgment of the Appellate Division herein, affirming a judgment for possession entered by the District Court in a summary action for the recovery of premises, be vacated and the matter remanded and transferred to the Law Division for a plenary hearing on the pertinent issues. See N.J.S.A. 2A:18—60 and 61.”)

General Motors Corp. v. New A.C. Chevrolet, Inc., C.A.3 (N.J.) 2001, 263 F.3d 296 (“C. “Good Cause” New AC's best argument for reversal of the District Court's grant of summary judgment for GM concerns the NJFPA claims. Before the District Court and again on appeal, New AC argues that, although the NJFPA defines “good cause” solely as “failure by the franchisee to substantially comply with those requirements imposed upon him by the franchise,” N.J. Stat. Ann. § 56:10–5, a franchisor cannot possess the requisite “good cause” unless it also acts in good faith (and without an improper, pretextual motive). New AC then challenges the District Court's explicit conclusion that, once the Court determined that New AC's addition of a Volkswagen line constituted “good cause” for terminating the Chevrolet franchise under NJFPA § 56:10–5, GM's motive behind that termination was entirely irrelevant. See General Motors Corp., 91 F.Supp.2d at 740. The District Court rejected this contention, concluding that a franchisor's motivation was irrelevant to the NJFPA “good cause” inquiry, in the course of granting summary judgment in GM's favor on Count III of GM's amended complaint, and on Count Two of New AC's counterclaim, both of which raised the question whether GM's termination of New AC's Chevrolet franchise constituted a violation of § 56:10–5.10 The District Court supported its conclusion by citing to Karl's Sales & Service, Inc. v. Gimbel Bros., Inc., 249 N.J.Super. 487, 592 A.2d 647 (1991), and Major Oldsmobile, Inc. v. General Motors Corp., 101 F.3d 684 (2d Cir.1996), both of which stated that a party's motivation in terminating an agreement is irrelevant when the terms of the agreement confer upon that party the legal right to terminate its obligations. See Karl's Sales, 592 A.2d at 651 (“The law is clear that where the right to terminate a contract is absolute under the wording in an agreement, the motive of a party in terminating such an agreement is irrelevant to the question of whether the termination is effective.”); Major Oldsmobile, 101 F.3d 684 (“As long as a party has the legal right to terminate its obligation under the contract, it is legally irrelevant whether the party was also motivated by reasons which would not themselves constitute valid grounds for termination of the contract.”) (internal quotation marks, brackets, and citations omitted). New AC contends that the District Court's reasoning is erroneous in that it fails to take account of the obligations imposed by § 56:10–5 of the NJFPA on a franchisor contemplating a franchise termination, and the manner in which that provision modifies, in the franchise context, the common law rule regarding severance of a private contractual relationship pursuant to a termination at will provision. New AC is surely correct in asserting that § 56:10–5 modifies the termination provisions of all franchise agreements governed by the laws of New Jersey: Even if the terms of a private franchise agreement permit termination at will, § 56:10–5's good cause requirement will supersede that arrangement and impose a good cause requirement on the franchisor's decision. This is because the NJFPA was enacted in large part to counteract the unequal bargaining power between franchisor and franchisee, which would allow a franchisor to leverage its bargaining strength so as to insert provisions in its private agreements with franchisees that would allow it to sever the franchise relationship at will. See, e.g., Westfield Ctr. Serv., Inc. v. Cities Serv. Oil Co., 86 N.J. 453, 432 A.2d 48, 53 (1981) (noting that “[f]ranchisors have drafted contracts permitting them to terminate or to refuse renewal of franchises at will” and observing that “[t]he New Jersey Legislature was sensitive to the overall problem” when it enacted the NJFPA in 1971). Karl's Sales and Major Oldsmobile certainly state the proper rule as regards private contractual relationships. They apparently were not, however, called upon to consider the NJFPA's statutory modification of that relationship; Karl's Sales and Major Oldsmobile neither cite to nor discuss the NJFPA in general or § 56:10–5 in particular, presumably because NJFPA claims were never raised in either case. Insofar as the District Court concluded, solely on the authority of Karl's Sales and Major Oldsmobile, that a franchisor's motivation is irrelevant to a claim *320 that a franchisor's termination violated § 56:10–5, its decision was reached in error. In its appellate briefing and at oral argument, New AC goes further and contends that, under New Jersey law, an examination of whether a franchisor's termination of a franchise was supported by “good cause,” within the meaning of § 56:10–5, would necessarily include an inquiry into whether the franchisor acted in good faith (and without some impermissible, pretextual motive). Although this argument is an interesting one, and, as we explain briefly in the margin, New Jersey law offers no clear answer on this point, resolution of this issue is not necessary to our disposition.11 This is because, even *321 were we to assume arguendo that a franchisor's motivation bears on the § 56:10–5 “good cause” inquiry, New AC has failed to furnish record evidence sufficient to create a genuine issue as to whether GM acted in good faith (or without a pretextual motive) in terminating New AC's Chevrolet franchise. New AC's contention that GM acted in bad faith or on pretext in ending its franchise relationship with New AC centers primarily on what we will call the “Project 2000” or “Plan 2000” theory. “Project 2000” is a general business plan developed by GM sometime around 1995, and continuously implemented thereafter. In developing “Project 2000,” GM officials examined various individual automobile marketing areas, and sought to create the optimal plan for the sale of GM vehicle lines in those areas. GM officials generally believed that the optimal business strategy would be to have a single dealer, selling and servicing only a single GM line, in each marketing area. According to New AC's allegations, set forth in its counterclaim and repeated in its appellate briefing and at oral argument, under the “Project 2000” business plan, GM's principal goal for the Hudson County marketing area, in which the New AC dealership was located, was to establish a single dealer as the exclusive Chevrolet franchisee. Furthermore, New AC argues, GM considered the Route 440 area to be the most viable commercial strip in Jersey City, and wanted its designated Jersey City Chevrolet franchise to be located along Route 440. New AC contends that, under the “Project 2000” strategy, GM preferred that the DiFeo dealership, which moved to a Route 440 site in 1995, serve as this exclusive franchisee, and therefore favored closing New AC's Chevrolet dealership. Thus, according to New AC, when GM decided to terminate New AC's franchise, it used New AC's addition of a Volkswagen line as a pretext for finally implementing its single-dealer, single-line “Project 2000” strategy. At this stage, however, we are reviewing the District Court's grant of summary judgment, and New AC cannot simply rest on its mere allegations concerning a “Project 2000” plan to eliminate its dealership. Rather, New AC must point to “pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,” Fed. R. Civ. Pro. 56(c), that create a genuine issue of material fact that GM adopted a strategy designed to eliminate New AC's Chevrolet franchise in Jersey City and that GM employed New AC's addition of a Volkswagen franchise as a pretextual reason for effecting that strategy. Based on the record evidence before us, we believe that New AC has failed to create any such genuine issue. Before examining the specific evidence on which New AC relies, we note that, other than the general contention that the addition of a Volkswagen line was a pretextual reason employed by GM to mask the true motive for its termination of New AC's Chevrolet franchise, the details of New AC's “Project 2000” argument are less than pellucid. We must cobble together the specifics of New AC's argument from incomplete pieces. Therefore, it is important, at the outset, to clarify New AC's contentions so as to get to the heart of New AC's argument concerning GM's bad faith and pretextual motivation. New AC does not appear to contend, as a general matter, that GM's stated preference for a single-line dealer distribution network is either unreasonable or lacking *322 a legitimate business justification. That is, New AC does not contend that, as a general rule, it is improper for automobile manufacturers to preclude their dealers from “dualing” another vehicle line. See supra Part II.B. Rather, New AC appears to be arguing that, under the particular facts of its case, GM's objection to New AC's “dualing” of a Volkswagen line was not a good-faith application of a single-line preference, but rather a bad-faith, pretextual reason, masking another, true motivation behind GM's action. According to New AC's opening appellate brief, this true motivation is GM's predetermined decision, made as early as the mid–1990s as part of “Project 2000,” to sever its franchise relationship with New AC. In order to survive summary judgment on this NJFPA claim, New AC must point to evidence creating a genuine issue of material fact that, prior to New AC's 1996 decision to add a Volkswagen franchise, GM decided to end its Chevrolet franchise arrangement with New AC, and that GM used New AC's operation of a Volkswagen franchise to obscure the fact that this decision constituted the true motivation behind New AC's termination. As factual support for this theory, New AC focuses primarily on three GM corporate documents. The first is an October 5, 1995 memorandum titled “Dealer Network Planning” and addressed to all GM dealers, which announced GM's future business strategy, an expansion of the “2000 Plan” originally commenced in 1990 (a precursor to “Project 2000”), designed to increase GM's and its dealers' profitability “by assuring that each brand is properly presented to the public, and by renewed emphasis on having the right number of dealers, at the right locations and of the right size.” In addition to this general goal, the “Dealer Network Planning” memorandum also expressed a preference for single dealers in a market area selling only single lines of GM vehicles: The New General Motors Network Strategy is simple: Wherever the local market sales potential for the refocused brand provides an opportunity for a profitable dealership selling and servicing that brand alone, General Motors should have a single line, exclusive dealer conforming in image and customer practices to the norm established for that brand. Further, General Motors brands are not commodities and should never be offered to the public from facilities that also offer competing brands. In New AC's submission, this “Dealer Network Planning” memorandum sets forth the core of “Project 2000”—i.e., the single-line, single-dealer strategy. According to New AC, two other corporate documents demonstrate the implementation of this “Project 2000” single-line, single-dealer strategy in the Jersey City region. A report titled “Year 2000 Plan: Essex and Hudson Counties, NJ MDAs: Marketing Area Highlights” includes a section on State Route 440 in Jersey City, the approximate location of both the DiFeo and New AC Chevrolet dealership.12 In that section, GM identifies the automobile dealerships located at the intersection of State Route 440 and Communipaw Avenue as “the only primary shopping area for Hudson County.” The report also contains evaluations of both the New AC Chevrolet dealership and the Bell *323 Chevrolet dealership (which was subsequently acquired by DiFeo). GM observed that both dealerships were in isolated neighborhood areas, away from Route 440's “primary shopping area,” and had out-of-date facilities. However, GM appeared much more optimistic about Bell Chevrolet's chances for future economic success. For Bell, the report's evaluation noted that “[t]he plan is to relocate to the State Route 440 autorow area in Jersey City,” while for New AC, the report stated that “viability of the dealer point is questionable” and observed that “[t]he plan is to maintain representation and monitor viability of the point.” Finally, a third document, a report dated February 7, 1996 and titled “Dealer Year 2000 Plan,” set forth the updated plan for the New AC dealership: “Monitor market conditions—future viability is questionable.” We are unpersuaded that these documents establish a genuine issue that GM, prior to New AC's 1996 request to add a Volkswagen dealership, made a decision to terminate New AC's Chevrolet franchise. Significantly, none of these documents refers to a decision by or an intent on the part of GM to end its franchise relationship with New AC. In these documents, GM does call New AC's future financial viability into question, but there is no indication that, at the time these documents were drafted, GM had concluded that these economic worries warranted the termination of New AC's Chevrolet dealership. To be sure, New AC could be asking us to infer from the concerns expressed by GM in these documents over the continued viability of the New AC franchise that, at some point subsequent to February 1996 (the date of the most recent of the three documents, the “Dealer Year 2000 Plan”), GM arrived at the conclusion that termination was necessary, and opportunistically employed New AC's 1996 Volkswagen line addition to mask its true motivation.13 In light of the record evidence, however, we believe that “this is not a reasonable inference from the evidence but instead is a leap of faith.” Northview Motors, Inc. v. Chrysler Motors Corp., 227 F.3d 78, 95 (3d Cir.2000). Contrary to New AC's contentions concerning GM's bad faith, the record evidence indicates that in the period between the time that New AC informed GM that it had decided to operate a Volkswagen franchise and the time that GM informed New AC of its final decision to terminate New AC's Chevrolet franchise—importantly, a period that spanned over one-and-a-half years—GM actually sought to preserve its franchise relationship with New AC. New AC first informed GM of its decision to seek a Volkswagen franchise on April 2, 1996. Were GM simply using the addition of this vehicle line as a pretext to implement its predetermined decision to eliminate the New AC franchise, one would expect New AC's termination to occur shortly after this notification. Yet, even after again informing New AC on June 24, 1996 that it was opposed to the Volkswagen addition, GM delayed for over eighteen months before finally advising New AC on January 5, 1998 that its Chevrolet franchise was terminated. In the intervening period, GM sent New AC repeated warning letters, furnishing New AC with numerous opportunities to relinquish its Volkswagen franchise and thereby preserve its franchise relationship with *324 GM. In fact, as late as May 13, 1998, the date on which the District Court heard oral argument on New AC's motion for a preliminary injunction barring its franchise termination, GM's counsel represented to the Court that GM was willing to continue New AC's Chevrolet franchise provided that New AC ceased offering the Volkswagen line. Moreover, GM did not simply issue warnings to New AC; rather, GM sought to forge a compromise position, addressing New AC's desire to add another vehicle line by offering to help establish an Oldsmobile line at New AC's dealership and indicating that GM was willing to supply financial support to New AC. Of course, GM insisted that any compromise include New AC's abandonment of the Volkswagen franchise, but New AC steadfastly refused to take such an action.14 In light of this evidence, we cannot help but conclude that New AC has failed to establish a genuine issue that GM acted in bad faith or out of an improper, pretextual motive in terminating New AC's Chevrolet franchise. Accordingly, we affirm the District Court's grant of summary judgment in GM's favor on Count III of the amended complaint and Count Two of the counterclaim.15”)

General Motors Corp. v. Gallo GMC Truck Sales, Inc., D.N.J.1989, 711 F.Supp. 810 (“GMC argues that the Franchise Practice Act, if applied to the cancellation of Gallo's heavy duty truck franchise, would violate the Commerce Clause of the United States Constitution. GMC reasons that such an application of the Act would force it either to continue manufacturing and marketing an unprofitable product line or to pay damages, resulting in an unjust and undue burden on interstate commerce. The Commerce Clause provides that Congress shall have power “[t]o regulate commerce ... among the several States.” U.S. Const. art. I, § 8, cl. 3. While the Commerce Clause is a limitation on the power of the states to regulate or burden interstate commerce, not every exercise of state power with some impact on interstate commerce is invalid. A state statute will be upheld if it “regulates evenhandedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental ... unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits.” Pike v. Bruce Church, Inc., 397 U.S. 137, 142, 90 S.Ct. 844, 847, 25 L.Ed.2d 174 (1970) (citing Huron Cement Co. v. Detroit, 362 U.S. 440, 443, 80 S.Ct. 813, 815, 4 L.Ed.2d 852 (1960)). This court has held that GMC's cancellation of Gallo's heavy duty truck addendum amounts to a termination of Gallo's heavy duty truck franchise in violation of the Franchise Practices Act. GMC asserts that the cancellation of that franchise was the inevitable result of its decision to withdraw from the unprofitable national heavy duty truck market. Applying the Act to prohibit the termination of Gallo's franchise, GMC argues, would be equivalent to denying GMC the liberty to withdraw from the heavy duty truck market in New Jersey, since under the Act GMC would be forced either to continue its heavy duty truck line or to pay damages. GMC asserts that by preventing it from withdrawing from the New Jersey heavy duty truck market in this manner, the Franchise Practices Act imposes a direct and excessive burden on interstate commerce. In support of its argument, GMC cites several cases where courts expressed concern over the potential constitutional problems that would be presented if the New Jersey Franchise Act was used to enjoin a franchiser's decision to cease doing business in the state. See, e.g., Westfield Centre Serv., 86 N.J. at 469, n. 4, 432 A.2d at 57, n. 4 (“If the franchisor is forced to permit the franchisee to continue to operate and the franchisor suffers an economic loss or cannot earn a fair return on its property, constitutional problems may arise.”); Consumers Oil Corp. v. Phillips Petroleum Co., 488 F.2d 816, 819 (3d Cir.1973) (“an interpretation of the Franchise Practices Act as prohibiting [the franchisor] from discontinuing its operations throughout the State would precipitate substantial constitutional questions”). The constitutional questions with which the Westfield and Consumers Oil courts were concerned are not raised in the instant case. Gallo is not requesting injunctive relief to enjoin GMC's withdrawal from the heavy duty truck market. Merely, Gallo has requested damages under § 56:10–10 of the Act for compensation of losses incurred as a result of GMC's cancellation of Gallo's heavy duty truck franchise. Therefore, the application of the Act in the instant case does not require GMC to continue operating in a market that it claims has become unprofitable, nor does it prohibit GMC from discontinuing its operations throughout the state of New Jersey. The Act does not compel GMC to continue marketing heavy duty trucks in New Jersey despite its nationwide withdrawal from that market, nor does it require that any resources be retained or diverted solely for the benefit of franchisees in this state. Thus, GMC is free to withdraw from the *820 heavy duty truck market. However, since such a withdrawal requires GMC to breach its franchise agreement with Gallo, GMC must pay the damages necessary to compensate Gallo for the losses suffered as a result of that breach. This court is not persuaded by GMC's claim that an award of damages under the Act would unduly regulate or burden interstate commerce. The New Jersey legislature intended that franchisees who comply with the terms of their respective franchise agreements should be compensated for the damages caused by the termination of those agreements. While the franchisor is free to withdraw from a particular market, it must nevertheless compensate franchisees whose agreements are terminated without good cause as a result of that withdrawal. The resulting burden on interstate commerce, if any, is incidental. This court therefore holds that the New Jersey Franchise Practices Act, insofar as it requires franchisors to compensate franchisees for the losses caused by terminations that lack good cause, does not impose an excessive burden on interstate commerce and therefore does not violate the commerce clause.”)

Westfield Centre Service, Inc. v. Cities Service Oil Co., 158 N.J.Super. 455, 386 A.2d 448 (Ch.1978), supplemented 162 N.J.Super. 114, 392 A.2d 243, affirmed and remanded 172 N.J.Super. 196, 411 A.2d 714, certification granted 85 N.J. 92, 425 A.2d 259, certification denied 85 N.J. 92, 425 A.2d 259, affirmed 86 N.J. 453, 432 A.2d 48 (“The Franchise Practices Act 1. Literal Terms N.J.S.A. 56:10-3(a) defines “franchise” as: * * * a written arrangement for a definite or indefinite period, in which a person grants to another person a license to use a trade name, trade mark, service mark, or related characteristics, and in *468 which there is a community of interest in the marketing of goods or services at wholesale, retail, by lease, agreement, or otherwise. N.J.S.A. 56:10-3(c) defines a “franchisor” as “a person who grants a franchise to another person,” and N.J.S.A. 56:10-3(d) defines a “franchisee” as “a person to whom a franchise is offered or granted.” The parties do not dispute that a franchise relationship existed between Westfield and Cities Service, and I so find. Defendant is specifically charged with having violated N.J.S.A. 56:10-5, which provides: It shall be a violation of this act for any franchisor directly or indirectly through any officer, agent, or employee to terminate, cancel, or fail to renew a franchise without having first given written notice setting forth all the reasons for such termination, cancellation, or intent not to renew to the franchisee at least 60 days in advance of such termination, cancellation, or failure to renew, except (1) where the alleged grounds are voluntary abandonment by the franchisee of the franchise relationship in which event the aforementioned written notice may be given 15 days in advance of such termination, cancellation, or failure to renew; and (2) where the alleged grounds are the conviction of the franchisee in a court of competent jurisdiction of an indictable offense directly related to the business conducted pursuant to the franchise in which event the aforementioned termination, cancellation or failure to renew may be effective immediately upon the delivery and receipt of written notice of same at any time following the aforementioned conviction. It shall be a violation of this act for a franchisor to terminate, cancel or fail to renew a franchise without good cause. For the purposes of this act, good cause for terminating, canceling, or failing to renew a franchise shall be limited to failure by the franchisee to substantially comply with those requirements imposed upon him by the franchise. (Emphasis supplied) Reference is also made to N.J.S.A. 56:10-7, which provides in part: 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 *469 estoppel which would relieve any person from liability imposed by this act. e. To impose unreasonable standards of performance upon a franchisee.

  1. 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. 4 Under the literal terms of the act, I find that defendant's attempted actions were a violation of law. The statute permits termination of a franchise solely for “good cause,” and then expressly limits good cause to the franchisee's failure to substantially comply with the franchise requirements. As noted, the recommendation that Westfield be disposed of was made in September 1974, and the final decision was made in February 1975. The testimony is largely undisputed that Westfield was still a viable operation at this time and that defendant intended to terminate the franchise regardless of Westfield's performance. There are no allegations that Galligan did **456 not comply with the terms of the franchise agreement. Thus, the proposed termination was not for “good cause” as narrowly defined in the act and therefore contravened the act's literal requirements. 56 I also find that defendant violated the act in failing to provide plaintiffs with “written notice setting forth all the reasons for such termination, cancellation, or failure to renew” at least 60 days in advance. There is no evidence that such notice was ever sent. I also find that the rider attached to the 1975 lease purporting to give defendant the right to terminate upon sale on 30 days' notice was void and without effect in light of the prohibition of N.J.S.A. 56:10-7(f), quoted supra. 2. Legislative Intent -- Defendant argues that the legislative intent was not to prohibit a franchisor from making a good faith decision to discontinue a particular franchise and to offer it for sale on *470 the open market, and that this intent, not the literal terms of the statute, should control. It has been said: In reading and interpreting a statute, primary regard must be given to the fundamental purpose for which the legislation was enacted. Where a literal reading will lead to a result not in accord with the essential purpose and design of the act, the spirit of the law will control the letter. (N.J. Builders, Owners & Managers Ass'n v. Blair, 60 N.J. 330, 338, 288 A.2d 855, 859 (1972)) See Continental Cas. Co. v. Knuckles, 142 N.J.Super. 162, 167, 361 A.2d 44 (App.Div.1976). As was stated in San-Lan Builders, Inc. v. Baxendale, 28 N.J. 148, 145 A.2d 457 (1958): These regulations are to receive a reasonable construction and application, to serve the plan and course of action of the lawgiver; and in this quest for the true intention of the law, the letter gives way to the obvious reason and spirit of the expression, and to this end the evident policy and purpose of the act constitute an implied limitation on the sense of the general terms and a touchstone for the expansion of narrower terms. The will of the lawgiver is to be gathered from the object and nature of the subject matter, the contextual setting, and the mischief felt and the remedy in view. (at 155, 145 A.2d at 461.) In order, therefore, to determine whether the act should be construed so as to include defendant's attempted actions, the court must examine the purpose of the act and the evils which the Legislature sought to correct. N.J.S.A. 56:10-2 states: The Legislature finds and declares that distribution and sales through franchise arrangements in the State of New Jersey vitally affects the general economy of the State, the public interest and the public welfare. It is therefore necessary in the public interest to define the relationship and responsibilities of franchisors and franchisees in connection with franchise arrangements. The purposes of the act are more fully set forth in the Statement accompanying the original bill, Assembly Bill 2063 (1971): *471 Franchising has developed into a major field of business endeavor throughout the United States. Not only is it familiar in relatively new enterprises such as fast food, lodging, specialized retailing, special auto repair and supply services and other undertakings, but franchising also is a fact of life in longer established businesses such as appliance and auto dealerships and gasoline stations. Thousands of businessmen and tens of thousands of their employees in New Jersey are affected by the operation of franchise systems. A number of states already have moved to protect the interests of franchisors and franchisees by clearly defining the rights of each group in a matter vital to their economic existence. New Jersey would do the same in this bill which, through the courts, would rule out arbitrary and capricious cancellation of franchises while preserving the right of franchisors to safeguard their interests **457 through the application of clear and nondiscriminatory standards. The bill would protect the substantial investment tangible and intangible of both parties in the various franchises. It would rule out economic coercion as a business tactic in this most sensitive field. The New Jersey Legislature has been asked many times in the past to deal on a piecemeal basis with various problems growing out of the franchise relationship. This bill would provide a comprehensive statutory formula for resolving a wide range of questions growing out of the franchise relationship. (Emphasis supplied) The type of “economic coercion” envisioned by the Legislature was described by our Supreme Court in the landmark case of Shell Oil Co. v. Marinello, 63 N.J. 402, 307 A.2d 598 (1973), cert. den. 415 U.S. 920, 94 S.Ct. 1421, 39 L.Ed.2d 475 (1974), where the court described the relationship between an oil company and a franchised service station operator in these terms: Shell is a major oil company. It not only controls the supply, but, in this case, the business site. The record shows that while the product itself and the location are prime factors in the profitability of a service station, the personality and efforts of the operator and the good will and clientele generated thereby are of major importance. The amount of fuel, lubricants and TBA a station will sell is directly related to courtesy, service, cleanliness and hours of operation, all dependent on the particular operator. (at 407, 307 A.2d at 601) The court went on to state that despite the economic benefits accruing to the franchisor from the franchisee's efforts, the franchisor has by far the greater bargaining power: *472 Viewing the combined lease and franchise against the foregoing background, it becomes apparent that Shell is the dominant party and that the relationship lacks equality in the respective bargaining positions of the parties. For all practical purposes Shell can dictate its own terms. The dealer, particularly if he has been operating the station for a period of years and built up its business clientele, when the time for renewal of the lease and dealer agreement comes around, cannot afford to risk confrontation with the oil company. He just signs on the dotted line. It is a fallacy to state that the right of termination is bilateral. The oil company can always get another person to operate the station. It is the incumbent dealer who has everything to lose since, even if he had another location to go to, the going business and trade he built up would remain with the old station. (at 408-409, 307 A.2d at 601) It should be noted that the court found that while the transaction in question predated the act, and was therefore not controlled by it, the act “merely put into statutory form the extant public policy of this State” insofar as termination or nonrenewal for other than good cause was concerned. Id. at 409, 307 A.2d at 602. In Amerada Hess Corp. v. Quinn, 143 N.J.Super. 237, 362 A.2d 1258 (Law Div.1976), Judge Doan said: The underlying aim of the Franchise Practices Act and Marinello, supra, is to protect the franchisee from undue usurpation of his franchise while yet allowing franchisor to protect its trade name, trademark and good will interests in the franchise agreement. With that in mind, the substantiality of a franchisee's noncompliance, as a legal concept, must be gauged in light of its effect upon or potential to affect the franchisor's trade name, trademark, good will and image which, after all, is the heart and substance of the franchising method of doing business. (at 251, 362 A.2d at 1266) Further insight into the legislative intent may be gained from an examination of certain underlying economic realities. It is estimated that franchising accounted for over $238 billion in the sale of goods and services in 1977. This figure is 12% higher **458 than in 1976, and more than twice the level at the start of the 1970s. In the area of retail sales, franchising accounted for $217.7 billion in 1977, or 31% *473 of the $703 billion total. Of the franchised sales, $52.7 billion's worth, or about 24%, were by gasoline stations. U.S. Dep't of Commerce, Franchising in the Economy, 1975-77, at 1-6. Franchises accounted for 80% of all gasoline sales in 1975, 1976 and 1977. Id. at 66. Abuses in the franchising field have been frequently documented. Thus, in Brown, “Franchising a Fiduciary Relationship,” 49 Tex.L.Rev. 650 (1971), the author states: In the Nation's second largest industry, the major oil firms have their gasoline station dealers in virtual bondage, hinged on the constant threat that their short-term contracts will not be renewed unless they submit to burdensome franchisor-imposed practices. Although one may be shocked to learn that of the 225,000 gasoline station dealers the annual attrition from insolvency, termination, and failure to renew the dealership ranges from twenty-five to forty percent, this decimation would appear predictable from the conditions that prevail. Just prior to World War II, in response to widespread national and local measures designed to discourage chainstore operations, the major oil companies adopted the so-called Iowa Plan under which the company utilized its economic strength to obtain choice economic sites, constructed stations with little regard to their economic viability, and then leased the premises to dealers on the condition that they handle the company's gasoline and related products. The proliferation of these company-leased stations and the preemption of almost all the good locations has led to the common sight of several stations at every available intersection with the operators helpless to satisfy the oil company's drive to obtain a satisfactory return on its unwise investment. (at 655-656, footnotes omitted) In light of these economic conditions, many commentators have criticized as inadequate the theory permitting termination or nonrenewal as long as the franchisor acts in good faith. Thus Professor Gellhorn states: Analytically, the terminating party's motives are unrelated to the harshness of the bargain or of its effect. Motives have no relationship to the parties' relative bargaining power. Nor would the application of a good faith test be affected either by whether the dominant party was misusing its power or by whether termination would have unduly harsh effects on the terminated party. Rather, its application would be determined by the extent to which *474 such misuse was disclosed by improper motives. The assumption, in other words, seems to be that fairness can be assured (or fundamental unfairness prevented) by attention to the motives upon which a party acts. Not only is empirical support for this assumption lacking, but it also seems contrary to common sense. There is no evidence that a weaker party would be protected adequately by requiring the dominant party to exhibit proper motives in exercising the power to terminate. For example, would a termination for the sole purpose of furthering the economic self-interest of the terminating party be evidence of lack of good faith? Probably not. But it cannot be seriously questioned that such a termination may nevertheless have substantial unfair effects on the terminated party's business. Conversely, bad faith motives may not result in any unfairness to the terminated party. On the other hand, the case against good faith conditions is easily overstated. At least in the cases in which it has been applied, there is little question that but for the good faith limitation the terminations would have caused the terminated parties to suffer substantial losses. (Gellhorn, “Limitations on Contract Termination Rights Franchise Cancellations,” 1967 Duke L.J. 465, 504-505) Similarly, a student author comments: Although the franchisor may not be acting in bad faith in asserting its interests, its far superior bargaining position enables **459 it to set these terms unilaterally, leaving the franchisee with the Hobson's choice of acquiescence or loss of its investment. If the legislative determination that franchisees need special protection is to be effectuated, franchisees should be protected from their own agreements even where the franchisor is acting with complete good faith. (Note, 74 Colum.L.Rev. 1487, 1493 (1974)) The author points out that frequently the legitimate interests of franchisor and franchisee differ: Since the former often deals at wholesale prices generally fixed nationwide, its profits are directly proportional to national sales volume and relatively insensitive to local market conditions. The latter, on the other hand, may be so limited by the manufacturer's requirements sales quotas, hours of operation and promotional activities that he may be unable to lower prices to effectively compete at the local level or cut costs of operation to keep profits stable. The result is that the franchisee may work longer hours, spend more on advertising, promotion and wages, and sell more of the franchisor's product without a commensurate increase in his profits. (at 1493, n. 59) *475 7 Based on these factors, I find that the legislative purpose would be defeated by limiting operation of the act, as defendant would apparently have me do, to terminations which are arbitrary and capricious or in bad faith. Where the legitimate economic interests of the franchisor and franchisee are at variance with one another, the franchisor with its grossly disproportionate bargaining power will virtually always prevail. The Franchise Practices Act, I find, was intended to rectify this lack of equal bargaining power. Should the act be construed so as to permit termination or nonrenewal whenever it is to the franchisor's economic advantage, much of the purpose of the act would be defeated. 8 Furthermore, it must be remembered that the initial decision to grant a franchise is made by the franchisor. Once the decision has been made, most of the financial risk is assumed by the franchisee. If the franchisor should decide that its original decision was mistaken, and that the franchise should be terminated, it could do so at minimal expense to itself but at the cost of potentially great harm to the franchisee. I find the act to be a remedial measure which should be broadly construed to prevent the unfair result described above. See Service Armament Co. v. Hyland, 70 N.J. 550, 559, 362 A.2d 13 (1976); Carianni v. Schwenker, 38 N.J.Super. 350, 361, 118 A.2d 847 (App.Div.1955); Global Amer. Ins. Managers v. Perera Co., 137 N.J.Super. 377, 386, 349 A.2d 108 (Ch.Div.1975), aff'd o. b., 144 N.J.Super. 24, 364 A.2d 546 (App.Div.1976). The court therefore concludes that the Franchise Practices Act, both by its express terms and in its intent, encompasses a situation in which a franchisor seeks to terminate a franchised location for entirely bona fide economic purposes.”)

Dunkin' Donuts of America, Inc. v. Middletown Donut Corp., 100 N.J. 166, 495 A.2d 66 (1985) (“The Act provides, in N.J.S.A. 56:10–5, that it is a violation to terminate or fail to renew a franchise without good cause, good cause being limited to the failure of a franchisee substantially to comply with the requirements of the franchise agreements. The statute, however, is not designed to protect those franchisees who willfully violate the terms of their franchise agreements. Amerada Hess Corp. v. Quinn, 143 N.J.Super. 237, 254, 362 A.2d 1258 (App.Div.1976). Like its sister statutes in other jurisdictions, the New Jersey Franchise Act sensibly authorizes damages only to aggrieved franchisees and does not compensate those franchisees who have lost their franchises as a result of their own neglect or misconduct. The Act allows termination for good cause, and it is undisputed that Smothergill's attempts to defraud Dunkin' Donuts amount to good cause. Accordingly, the statute does not disturb Dunkin' Donuts' common-law right to complete termination. New Jersey case law does not suggest differently. In Simmons v. General Motors Corp., 180 N.J.Super. 522, 435 A.2d 1167 (App.Div.), certif. den., 88 N.J. 498, 443 A.2d 712 (1981), a franchisee was found to have *179 committed a substantial breach of its franchise agreement by failing to give proper notice to the franchisor, General Motors, before selling its franchise. After finally receiving notice of the sale and transfer of the franchise, General Motors investigated the purchaser and justifiably found him unqualified to be an owner and operator of a General Motors dealership. Accordingly, General Motors terminated the franchise. Although it determined that a breach of the franchise agreement had occurred, the trial court in Simmons refused to order immediate termination and instead attempted to “do equity” by granting the unacceptable purchaser a six-month grace period to try and recoup his investment by selling the dealership to a suitable franchisee. The Appellate Division reversed, holding that the franchisee had committed a substantial breach of the franchise agreement and that termination of the franchise was authorized by N.J.S.A. 56:10–5 and –6. 180 N.J.Super. at 541, 435 A.2d 1167. Accordingly, the objectionable franchisee had no right to continue operating the franchise or to transfer it for value. Aware of the provision requiring notice to General Motors prior to the transfer of a franchise, he nevertheless chose to take the risk of nonapproval. When he was legitimately found to be an unacceptable franchise owner, he lost all rights to the franchise. Termination was the remedy, and termination was to be imposed without any conditions attached.3 The result in Simmons is not in conflict with our ruling in Westfield Centre Serv., Inc. v. Cities Serv. Oil Co., 86 N.J. 453, 432 A.2d 48 (1981), requiring that a nonrenewed franchisee be awarded the actual or **73 reasonable value of his franchise as remedy for nonrenewal. Despite the relief granted in that case, Westfield lends no support for the remedy of the Chancery Division here. We ordered such relief in Westfield because the franchisor lacked good cause for having failed to renew the franchise as *180 required by N.J.S.A. 56:10–5. Accordingly, the franchisor was in violation of the Act and was liable to the innocent franchisee for the damages sustained thereby, see N.J.S.A. 56:10–10, which we determined to be the reasonable value of the nonrenewed business. Unlike the franchisor in Westfield, however, Dunkin' Donuts has not violated any statutory requirements, given the intentional underreporting of sales by Smothergill, which constituted good cause for termination. Because the franchisee's conduct in this case is so dissimilar to Westfield 's circumstances, the remedy in Westfield of granting the franchisee the reasonable value of the nonrenewed franchise is of no avail to Smothergill. In fact, if the relief afforded by this Court in Westfield has any relevance here, it tends to persuade us that the remedy molded by the Chancery Division was wholly improper. By requiring Dunkin' Donuts to pay compensation to Smothergill for the value of his franchises on their surrender, the Chancery Division has in essence required that Dunkin' Donuts, an innocent franchisor, pay the same “penalty” as was required of Westfield 's franchisor, who had violated the New Jersey Franchise Practices Act. Encouraging such a result would offend not only sound policy but common sense as well. The limited remedies explicitly granted in certain franchising statutes likewise tend to support our conclusion. For example, Washington Revised Code § 19.100.180(2)(j) (1978) provides that on termination for good cause, the franchisor must repurchase the franchisee's inventory and supplies at fair market value. However, the statute requires no payment for the value of the franchise. Similar repurchase requirements appear in the franchising statutes of Wisconsin, Michigan, and Mississippi. See Wis.Stat. § 135.045 (1984) (remedy available to all terminated franchisees but repurchase requirement applies only to merchandise with a name, trademark, or label that identifies the franchisor); Mich.Comp.Laws § 445.1527 (1985) (additionally requires repurchase of equipment, fixtures, and furnishings, *181 but remedy is available only to nonrenewed franchisees whose term of franchise was less than five years and whose agreement contained covenant not to compete); Miss.Code Ann. § 75–77–3 (1979) (remedy available to all terminated franchisees). In Arkansas, only those franchisees terminated without cause must be compensated for supplies, inventory, and equipment, Ark.Rev.Stat. § 70–815 (1979), the implication being that those who are terminated for cause get nothing. Also significant are the statutory provisions that explicitly provide that an innocent franchisee shall be compensated for part or all of the value of his franchise on a franchisor's decision not to renew the franchise. Those provisions are notable in that they require that form of compensation under only very specific circumstances involving injustice to innocent franchisees. See Hawaii Rev.Stat. § 482E–6(3) (Supp.1984) (franchisor shall compensate nonrenewed franchisee for loss of goodwill if franchise is not renewed for purposes of converting franchise outlet to one owned and operated by franchisor); Ill.Rev.Stat., ch. 121 ½ , § 704.4 (Supp.1985) (nonrenewed franchisee must be compensated for fair market value of franchise if agreement contains a covenant not to compete or franchisee was not given six-months notice of nonrenewal); Wash.Rev.Code § 19.100.180(i) (1978) (franchisor shall compensate nonrenewed franchisee for value of goodwill if franchisee given less than year's notice of nonrenewal and if franchisee is bound by covenant not to compete). The availability of those remedies in only the most narrow circumstances suggests that extension of the same type of relief to a **74 franchisee who has been terminated for cause would be improper.”)

Cooper Distributing Co., Inc. v. Amana Refrigeration, Inc., C.A.3 (N.J.)1995, 63 F.3d 262, rehearing and suggestion for rehearing in banc denied, on subsequent appeal 180 F.3d 542 (“The jury awarded Cooper $4.375 million in damages under the NJFPA. App. 4794. Amana requests a new trial on damages, arguing that the district court erred in upholding the verdict. Amana claims that the verdict was against the great weight of the evidence because the jury based its damages award on the false assumption that Cooper had a contractual right in the four-state territory to be Amana's exclusive distributor to retail dealers. App. 4954. Because we agree that Cooper had no such right and because we additionally hold that the franchise was valued as of the wrong date, we remand for a new trial on damages. 15 We are mindful that our scope of review of a damages award is “exceedingly narrow.” Williams v. Martin Marietta Alumina, Inc., 817 F.2d 1030, 1038 (3d Cir.1987) (quoting Walters v. Mintec/International, 758 F.2d 73, 80 (3d Cir.1985)). The district court's refusal to grant a new trial is reviewed for abuse of discretion. See Frank Arnold Contractors, Inc. v. Vilsmeier Auction Co., Inc., 806 F.2d 462, 465 (3d Cir.1986). We will reverse, however, when “the verdict is contrary to the great weight of the evidence, thus making a new trial necessary to prevent a miscarriage of justice.” Roebuck v. Drexel University, 852 F.2d 715, 736 (3d Cir.1988). In the current case, Cooper's valuation expert, Melvin Konner, in calculating the value of the Cooper franchise, assumed that Cooper had an exclusive right to sell to the retail dealers in its four-state territory and “that Amana had no right to sell [to the dealers] direct[ly.]” App. 1841. Furthermore, Konner explained that his calculation of the value of the Cooper franchise would have been “considerably less” if “Amana did have the right to sell directly” to the dealers. App. 18. The jury's award appears to have been based on Konner's estimate. As will be discussed below, however, see infra p. 278–281, Amana did not grant Cooper the exclusive right to sell to the retail dealers, and therefore Konner's assumption was incorrect. Consequently, we hold that the jury's verdict was against the great weight of the evidence, and we therefore remand for a new trial on NJFPA damages. We also find that the Cooper franchise was valued as of the wrong date. The district court instructed the jury to value the franchise as of November 5, 1991, the date that Amana attempted to terminate the franchise, App. 2917, and Konner likewise calculated Cooper's value as that date. App. 1780. However, as a result of the preliminary injunction entered by the district court, Cooper continued to operate its franchise until the date of judgment, March 8, 1994, which was also the date on which the district court dissolved the preliminary injunction. App. 5000–02. Although Amana unquestionably attempted to terminate the Cooper franchise on November 5, 1991, the franchise was not effectively terminated until the dissolution of the preliminary injunction on March 8, 1994, since Cooper continued to operate and receive profits from the franchise until that latter date. We therefore hold that the franchise should have been valued as of that date, when Cooper actually stopped running the franchise. Valuing the franchise as of the earlier date would bestow a double recovery on Cooper. When franchises are valued, the “price should be approximately equal to the present value of all income that can be derived far into the future from the business.” Johnson v. Oroweat Foods Co., 785 F.2d 503, 507 (4th Cir.1986). This incorporation of future earnings into the current value of a business explains “why courts allow a plaintiff to recover either the present value of lost future earnings or the present market value of the lost business, but not both.” Id. at 508; see also Arnott v. American Oil Co., 609 F.2d 873, 886 (8th Cir.1979) (“[I]t is improper to permit a plaintiff ... to recover both the value of the business as a going concern ... and future profits of that business.... Future profit potential is taken into consideration in valuing the business as a going concern.”), cert. denied, 446 U.S. 918, 100 S.Ct. 1852, 64 L.Ed.2d 272 (1980). Consequently, valuing the Cooper franchise as of November 5, 1991, would give rise to a double recovery because Cooper would receive both (1) the value of the franchise as of the earlier date—(which would include the present value of the future earnings from that date to the date of judgment)17 and (2) the actual profits derived from the franchise between the date of the attempted termination and the date of judgment. To avoid this double recovery, we conclude that the proper date of valuation in this case is March 8, 1994.18”)

Maple Shade Motor Corp. v. Kia Motors America, Inc., C.A.3 (N.J.)2008, 260 Fed.Appx. 517, 2008 WL 111041 (“The District Court did not err in granting summary judgment in favor of KMA with respect to Maple Shade's claim that KMA improperly rejected its proposed transfer of the Kia franchise to Vallee & Bowe, Inc. The NJFPA describes circumstances for a franchisee's proper transfer of an existing franchise and a franchisor's proper rejection of a franchisee's proposed transfer. See N.J. STAT. ANN. § 56:10-6. In this case, KMA's rejection of the proposed transfer was proper. 2 According to the terms of the Consent Agreement executed at the outset of this litigation, Maple Shade had only an interest in a franchise agreement subject *519 to a notice of termination. The Consent Agreement did not nullify the notice of termination; instead, it preserved the status quo without “modify[ing], increas[ing] or diminish[ing] any of the rights or obligations that either party would otherwise have after the dealer's receipt of a notice of termination.” App. 398A. The status quo at the time the Consent Agreement was entered into was that Maple Shade had no rights in the franchise transferable “free and clear” of the notice of termination. See Restatement (Second) of Contracts § 336 cmt. b. Because the District Court found that KMA had good cause to terminate the franchise agreement with Maple Shade and the Consent Agreement preserved the status quo as it existed after KMA issued the notice of termination, KMA's rejection of the proposed transfer “free and clear” did not contravene the NJFPA. In addition, the proposal for the transfer of the Kia franchise from Maple Shade to Vallee & Bowe anticipated Vallee & Bowe temporarily housing Kia vehicles in its Cadillac showroom until Vallee & Bowe could build a separate Kia showroom. When Maple Shade presented the transfer proposal to KMA, Vallee & Bowe was unable to provide any assurances that General Motors consented to the dualing of the Cadillac and Kia vehicles in Vallee & Bowe's Cadillac showroom. Therefore, Vallee & Bowe was unable to commit to providing any Kia dealership facilities, let alone the exclusive showroom required by the Addendum. Because Vallee & Bowe could not agree to meet all of the requirements of the existing franchise agreement, KMA's rejection of the proposed transfer was not prohibited by the NJFPA. See N.J. STAT. ANN. § 56:10-6. Therefore, exercising plenary review, Northview Motors, 227 F.3d at 87-88, we are satisfied that the District Court did not err in granting summary judgment as Maple Shade's attempt to transfer the franchise “free and clear” of the notice of termination and Vallee & Bowe's inability to demonstrate that it could fulfill the requirements of the agreement were proper bases for KMA to reject the proposed transfer. We have considered all of the contentions raised by the parties and conclude that no further discussion is necessary. Accordingly, the judgment of the District Court will be affirmed.”)

Dunkin' Donuts of America, Inc. v. Middletown Donut Corp., 100 N.J. 166, 495 A.2d 66 (1985) (“In molding its creative remedy the Chancery Division eschewed strict enforcement of the franchise agreements. In effect, it modified the contractual positions of the parties. Although the court offered “equitable considerations” as the basis for its action, we are constrained to conclude that there is no support in equitable principles for the imaginative relief that it fashioned. Moreover, the remedy clearly flies in the face of the common-law rules of franchising, and runs counter to the thrust of modern franchising statutes as well. *176 III An understanding of the errors below is perhaps made easier with an overview of **71 the general body of franchise law. At common law, freedom of contract was the rule applicable to franchise agreements. “Franchise Regulation: Ohio Considers Legislation to Protect the Franchisee,” 33 Ohio St.L.J. 643, 665 (1972); E. Gellhorn, “Limitations on Contract Termination Rights—Franchise Cancellations,” 1967 Duke L.J. 465, 468. Thus, a relationship of franchisor to franchisee was no different from that of any other two parties who had contracted and bound themselves to specific responsibilities. Franchise termination clauses tended greatly to favor the interests of franchisors. Franchise agreements of unspecified duration were construed to be terminable at will. D. Chisum, “State Regulation of Franchising: The Washington Experience,” 48 Wash.L.Rev. 291, 315–16 (1973), and many contracts for set time periods explicitly provided for termination at the will of the franchisor. “Franchise Regulation,” supra, 33 Ohio St.L.J. at 664. Otherwise, the common law respected the franchisor's right to end the franchise relationship on expiration of the franchise agreement or on the occurrence of any breach of the provisions of the franchise contract. See Chisum, supra, 48 Wash.L.Rev. at 314–17; “Franchise Regulation,” supra, 33 Ohio St.L.J. at 664; Gellhorn,supra, 1967 Duke L.J. at 466. The effects of termination were starkly simple—the franchisee would be ousted from the franchise, essentially forfeiting his investment, excepting equipment, supplies, and inventory that had already been purchased. See R. Serota, “Constitutional Obstacles to State ‘Good Cause’ Restrictions on Franchise Terminations,” 74 Colum.L.Rev. 1487, 1489 n. 13 (1974); Chisum, supra, 48 Wash.L.Rev. at 315; Gellhorn, *177 supra, 1967 Duke L.J. at 467 n. 5. The franchisor would then regain full control of the terminated business and would be free to begin a relationship with a new franchisee. No compensation would be paid to the terminated franchisee for the value of his business. See Chisum, supra, 48 Wash.L.Rev. at 315; Gellhorn, supra, 1967 Duke L.J. at 467 n. 5; cf. Serota, supra, 74 Colum.L.Rev. at 1493 (franchisor conditioning renewal upon new requirements to be followed by franchisee leaves franchisee “with the Hobson's choice of acquiescence or loss of its investment”). Over time, however, dissatisfaction began to grow with the common-law scheme of termination and nonrenewal. State legislators became increasingly sensitive to the plight of franchisees who had devoted considerable time and money towards building a business only to be terminated at the whim of the franchisor. In response to a perceived disparity in bargaining power, many states passed legislation that afforded to franchisees protection against indiscriminate terminations by prohibiting cancellation or nonrenewal of franchises for other than good cause. See, e.g., Ark.Stat.Ann. § 70–810 (1979); Conn.Gen.Stat. § 42–133f(a) (Supp.1985); Del.Code Ann., tit. 6, § 2552 (Supp.1984); Hawaii Rev.Stat., § 482E–6(2)(H)(Supp.1984); Ill.Rev.Stat., ch. 122 ½ , § 704.3 (Supp.1985); Wash.Rev.Code § 19.100.180 (1976); Wis.Stat.Ann., § 135.05 (1984). It is important to emphasize the limited reach of such statutes. These laws are designed to provide relief only to innocent franchisees, those who had complied with the terms of their franchise agreements but nonetheless were victimized by the loss of their franchises. Since Smothergill is not an innocent franchisee, these franchising statutes would leave him remediless, and the policy behind them provides no support for the Chancery Division's imaginative remedy, which results in compensation to a guilty franchisee for the value of his franchise upon termination. New Jersey does have a statute similarly designed to shield franchisees from arbitrary terminations, the New Jersey Franchise Practices Act (Act), N.J.S.A. 56:10–1 to –15; but the express language of the Act discloses immediately that this franchisee does not fall under its protections. N.J.S.A. 56:10–4(2) provides that the Act applies only to those franchises under *178 which gross sales of products or services **72 between the franchisor and franchisee shall have exceeded $35,000 for the twelve-month period preceding the institution of suit. As it is undisputed that these parties do not meet the $35,000 threshold, the plain language of N.J.S.A. 56:10–4(2) dictates that the franchises in issue are not subject to the Act. Nonetheless, to the extent that the Act reflects the prevalent public policy of this state, it applies to all franchises established or maintained in New Jersey. Shell Oil Co. v. Marinello, 63 N.J. 402, 409, 307 A.2d 598 (1973), cert. den., 415 U.S. 920, 94 S.Ct. 1421, 39 L.Ed.2d 475 (1974). Given the legislature's findings of longstanding abuses by franchisors in respect of termination, cancellation, and renewal of franchises, legitimate public policy concerns are surely present in this area. We therefore examine the requirements of the Act in the abstract and as applied to this case. The Act provides, in N.J.S.A. 56:10–5, that it is a violation to terminate or fail to renew a franchise without good cause, good cause being limited to the failure of a franchisee substantially to comply with the requirements of the franchise agreements. The statute, however, is not designed to protect those franchisees who willfully violate the terms of their franchise agreements. Amerada Hess Corp. v. Quinn, 143 N.J.Super. 237, 254, 362 A.2d 1258 (App.Div.1976). Like its sister statutes in other jurisdictions, the New Jersey Franchise Act sensibly authorizes damages only to aggrieved franchisees and does not compensate those franchisees who have lost their franchises as a result of their own neglect or misconduct. The Act allows termination for good cause, and it is undisputed that Smothergill's attempts to defraud Dunkin' Donuts amount to good cause. Accordingly, the statute does not disturb Dunkin' Donuts' common-law right to complete termination. New Jersey case law does not suggest differently. In Simmons v. General Motors Corp., 180 N.J.Super. 522, 435 A.2d 1167 (App.Div.), certif. den., 88 N.J. 498, 443 A.2d 712 (1981), a franchisee was found to have *179 committed a substantial breach of its franchise agreement by failing to give proper notice to the franchisor, General Motors, before selling its franchise. After finally receiving notice of the sale and transfer of the franchise, General Motors investigated the purchaser and justifiably found him unqualified to be an owner and operator of a General Motors dealership. Accordingly, General Motors terminated the franchise. Although it determined that a breach of the franchise agreement had occurred, the trial court in Simmons refused to order immediate termination and instead attempted to “do equity” by granting the unacceptable purchaser a six-month grace period to try and recoup his investment by selling the dealership to a suitable franchisee. The Appellate Division reversed, holding that the franchisee had committed a substantial breach of the franchise agreement and that termination of the franchise was authorized by N.J.S.A. 56:10–5 and –6. 180 N.J.Super. at 541, 435 A.2d 1167. Accordingly, the objectionable franchisee had no right to continue operating the franchise or to transfer it for value. Aware of the provision requiring notice to General Motors prior to the transfer of a franchise, he nevertheless chose to take the risk of nonapproval. When he was legitimately found to be an unacceptable franchise owner, he lost all rights to the franchise. Termination was the remedy, and termination was to be imposed without any conditions attached. The result in Simmons is not in conflict with our ruling in Westfield Centre Serv., Inc. v. Cities Serv. Oil Co., 86 N.J. 453, 432 A.2d 48 (1981), requiring that a nonrenewed franchisee be awarded the actual or **73 reasonable value of his franchise as remedy for nonrenewal. Despite the relief granted in that case, Westfield lends no support for the remedy of the Chancery Division here. We ordered such relief in Westfield because the franchisor lacked good cause for having failed to renew the franchise as *180 required by N.J.S.A. 56:10–5. Accordingly, the franchisor was in violation of the Act and was liable to the innocent franchisee for the damages sustained thereby, see N.J.S.A. 56:10–10, which we determined to be the reasonable value of the nonrenewed business. Unlike the franchisor in Westfield, however, Dunkin' Donuts has not violated any statutory requirements, given the intentional underreporting of sales by Smothergill, which constituted good cause for termination. Because the franchisee's conduct in this case is so dissimilar to Westfield 's circumstances, the remedy in Westfield of granting the franchisee the reasonable value of the nonrenewed franchise is of no avail to Smothergill. In fact, if the relief afforded by this Court in Westfield has any relevance here, it tends to persuade us that the remedy molded by the Chancery Division was wholly improper. By requiring Dunkin' Donuts to pay compensation to Smothergill for the value of his franchises on their surrender, the Chancery Division has in essence required that Dunkin' Donuts, an innocent franchisor, pay the same “penalty” as was required of Westfield 's franchisor, who had violated the New Jersey Franchise Practices Act. Encouraging such a result would offend not only sound policy but common sense as well. The limited remedies explicitly granted in certain franchising statutes likewise tend to support our conclusion. For example, Washington Revised Code § 19.100.180(2)(j) (1978) provides that on termination for good cause, the franchisor must repurchase the franchisee's inventory and supplies at fair market value. However, the statute requires no payment for the value of the franchise. Similar repurchase requirements appear in the franchising statutes of Wisconsin, Michigan, and Mississippi. See Wis.Stat. § 135.045 (1984) (remedy available to all terminated franchisees but repurchase requirement applies only to merchandise with a name, trademark, or label that identifies the franchisor); Mich.Comp.Laws § 445.1527 (1985) (additionally requires repurchase of equipment, fixtures, and furnishings, *181 but remedy is available only to nonrenewed franchisees whose term of franchise was less than five years and whose agreement contained covenant not to compete); Miss.Code Ann. § 75–77–3 (1979) (remedy available to all terminated franchisees). In Arkansas, only those franchisees terminated without cause must be compensated for supplies, inventory, and equipment, Ark.Rev.Stat. § 70–815 (1979), the implication being that those who are terminated for cause get nothing. Also significant are the statutory provisions that explicitly provide that an innocent franchisee shall be compensated for part or all of the value of his franchise on a franchisor's decision not to renew the franchise. Those provisions are notable in that they require that form of compensation under only very specific circumstances involving injustice to innocent franchisees. See Hawaii Rev.Stat. § 482E–6(3) (Supp.1984) (franchisor shall compensate nonrenewed franchisee for loss of goodwill if franchise is not renewed for purposes of converting franchise outlet to one owned and operated by franchisor); Ill.Rev.Stat., ch. 121 ½ , § 704.4 (Supp.1985) (nonrenewed franchisee must be compensated for fair market value of franchise if agreement contains a covenant not to compete or franchisee was not given six-months notice of nonrenewal); Wash.Rev.Code § 19.100.180(i) (1978) (franchisor shall compensate nonrenewed franchisee for value of goodwill if franchisee given less than year's notice of nonrenewal and if franchisee is bound by covenant not to compete). The availability of those remedies in only the most narrow circumstances suggests that extension of the same type of relief to a **74 franchisee who has been terminated for cause would be improper. IV Finding nothing in the general body of franchise law to indicate that Smothergill should receive value for his franchise as a condition of termination, we next examine whether the Chancery Division can nonetheless require such relief on the *182 basis of its authority as a court of equity. We have uncovered no equitable maxim or other guiding principle that would support the court's disregard of the terms of the franchise agreements and modifications of the general body of franchise law discussed above. Although the remedy imposed by the court was undoubtedly well-intentioned, naked references to “equitable considerations” are not sufficient support for the type of “creativity” unleashed here. We are not disposed to put all contractual rights at risk in the name of equity.”)

Carlos v. Philips Business Systems, Inc., 1983, 556 F.Supp. 769, affirmed 742 F.2d 1432 (“*775 THE NEW JERSEY ACT -- The New Jersey Act “define[s] the relationship and responsibility of franchisors and franchisees in connection with franchise agreements.” N.J.Stat.Ann. § 56:10–2 (West Supp.1982–83). Its drafters sought to “rule out arbitrary and capricious cancellation of franchises while preserving the right of franchisors to safeguard their interests through the application of clear and nondiscriminatory standards.” Assembly Bill 2063 (1971). The New Jersey Supreme Court views the Franchise Practices Act as a reflection of “legislative concern over long-standing abuses in the franchise relationship,” such as instances of economic dominance by a franchisor over its franchisee. Shell Oil Company v. Marinello, 63 N.J. 402, 409, 307 A.2d 598, 602 (1973), cert. denied, 415 U.S. 920, 94 S.Ct. 1421, 39 L.Ed.2d 475 (1974). Other cases have echoed this rationale, characterizing the Franchise Practices Act as a provision “intended to rectify [this] lack of equal bargaining power” between the franchisor and the franchisee. Westfield Centre Service, Inc. v. Cities Service Oil, Co., 158 N.J.Super. 455, 467, 386 A.2d 448, 459 (1978). See also Amerada Hess Corp. v. Quinn, 143 N.J.Super. 237, 362 A.2d 1258 (1976). The purposes of the Act are furthered principally by N.J.Stat.Ann. § 56:10–10 (West Supp.1982–83) which grants a franchisee the right to bring an action against its franchisor to recover damages for or to obtain injunctive relief against a violation of the Act. Carlos has utilized this section as the predicate for the portion of his case, involving D & S Word Processing of Trenton, claiming that PBSI has violated the substantive provisions of the Act. To prevail on this portion of the case, plaintiff must satisfy two elements. The first of these requires that plaintiff qualify as a “franchise” within the guidelines set forth in the Franchise Practices Act. Such an entity generally is defined as “a person to whom a franchise is offered or granted.” N.J.Stat.Ann. § 56:10–3(d) (West Supp.1982–83). The protection of the Act, however, extends only to franchises with a place of business in New Jersey, with gross sales of products covered by the franchise agreement in excess of $35,000 for the twelve month period prior to the institution of the cause of action, and with greater than 20% gross sales in the franchise product. N.J.Stat.Ann. § 56:10–4 (West Supp.1982–83). Here, the court is satisfied that D & S Word Processing is likely to succeed in ultimately proving that it meets both of these requirements. The two agreements entered into on January 1, 1975 on July 1, 1978 (Pl.Ex. 1 and 2) clearly evidence an agreement for Carlos to act as an exclusive distributor for PBSI in the eight designated counties in southern New Jersey. It is undisputed that Carlos maintains a place of business for D & S Word Processing at 2561 Yardville, Hamilton Square Road in Trenton, New Jersey. The record also reveals that in the twelve months immediately preceding institution of this suit Carlos purchased between $450,000 and $600,000 in inventory from PBSI. (J9) Moreover, almost 90% of Carlos' business was derived through his franchise agreement with PBSI with $150,000 of his sales of Norelco products being made in the New Jersey area. (J10–13) A franchisee seeking the protection of the New Jersey Act must next demonstrate that its franchisor violated the Act. This requires the franchisee to prove that the franchisor terminated, cancelled or failed to renew the franchise without complying with the statutory requirements. See N.J.Stat.Ann. § 56:10–5 (West Supp.1982–83). PBSI has taken the position that the plaintiff cannot satisfy these statutory elements because PBSI has not terminated, cancelled or failed to renew the plaintiff's Norelco franchise. Rather, the defendant maintains that its intention with respect to the plaintiff is to “change” the nature of the relationship between D & S and PBSI to counter the defendant's financial misfortunes (Finding of Fact 21). The court does not agree. *776 5 The clear intent behind PBSI's new dealer arrangement is to streamline its marketing system by eliminating exclusive distributors such as D & S in order to more profitably exist in a changing marketplace. Any argument that the new agreement merely works a “change” is, in the court's opinion, nothing more than a poorly disguised euphemism for what is essentially a termination or failure to renew this distributorship agreement. 6 Section 56:10–5 of the New Jersey Act provides that such termination or failure to renew a protected franchise is permissible only for good cause and then only upon 60 days written notice of such cause to the franchisee. Id. Good cause is defined to include a failure to substantially comply with the terms of the franchise agreement. Here the court finds PBSI to have run afoul of the law in both regards. On or about May 1, 1981 all fifty-five of PBSI's exclusive distributors, including Carlos, received a memo from Arthur L. Hanrahan of defendant advising them of a forthcoming new agreement designed “... to address the market place as it exists today.” (Pl.Ex. 8). Nowhere in that memo did defendant advise Carlos of any default or failure to substantially comply with the terms of the July 1978 agreement. In fact, Carlos was never advised during the life of this agreement that he was in any way not substantially complying with it. It was not until June 29, 1981 that plaintiff actually received the proposed agreement (Pl.Ex. 9) which purported to strip him of his exclusive distributor status. Under these circumstances it is abundantly clear that plaintiff enjoys a substantial likelihood of success on his claim of violation of the New Jersey Act.”)

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