Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION—D.N.J.: Only franchisees have standing under Franchise Practices Act, reversing trade association’s suit against Ford, (Jul 30, 2025)

By Martin A. Steinberg, J.D.

Ford’s Lincoln Commitment Program allegedly violated the Franchise Practices Act’s prohibition on differential allowance, credit, or bonus pricing.

The New Jersey Supreme Court, in a unanimous opinion, held that the New Jersey Franchise Practices Act (FPA) permits only individual franchisees, not trade associations, to sue their franchisors for violations of its differential-pricing provisions. The New Jersey Coalition of Automotive Retailers (NJCAR), a nonprofit association representing over 500 franchise-dealership members, challenged Ford’s Lincoln Commitment Program as an illicit “allowance, credit or bonus” under N.J.S.A. 56:10 7.4(h). However, the court agreed with the state trial court that the plain text of N.J.S.A 56:10-10 limits standing “to any franchisee against its franchisor” and thereby forecloses suits by non-franchisees. The New Jersey Appellate Division’s contrary ruling that NJCAR had associational standing was reversed, and summary judgment for Ford was reinstated (New Jersey Coalition of Automotive Retailers, Inc. v. Ford Motor Co., No. 089378 (D.N.J. July 29, 2025)).

Background.Ford Motor Company is a Delaware corporation with its principal place of business in Michigan. It franchises Lincoln-branded dealerships nationwide, including in New Jersey. The plaintiff is a New Jersey nonprofit trade association representing over 500 franchised new car and truck dealers, eighteen of which are Lincoln franchisees. Yet, NJCAR itself is not a franchisee under the FPA.

In 2011, Ford launched the Lincoln Commitment Program (LCP), voluntarily open to Lincoln franchisees to incentivize investment in the brand. Under the program, Ford provides monthly and quarterly payments to participating franchisees who meet specific criteria. Those payments vary. In its 2020 Phase II iteration, the LCP pays dealers a lump-sum percentage (ranging from 0 to 5.75 percent of each vehicles MSRP) based on meeting tiered criteria across four categories. Under the Lincoln Commitment Program, the Foundation tier imposes mandatory digital-storefront, software, and training requirements before any payments; the Connected Client Experience tier awards bonuses for services like customer vehicle pickup/return, meeting sales-and-activation thresholds, car washes, and loaner-vehicle availability; the LCORP tier requires use of Fords Accelerate platform to acquire off-lease vehicles and meet sales and training benchmarks; and the Facility tier provides payments on a graduated 0 percent, 1.0 percent, or 2.75 percent scale for showroom and facility upgrades to the latest Lincoln-exclusive design.

Procedural history.On January 31, 2020, NJCAR sued Ford in New Jersey Superior Court, alleging the LCP violates the FPA’s prohibition on differential “allowance, credit or bonus” pricing (N.J.S.A. 56:10-7.4(h)). After amended pleadings and discovery, both sides moved for summary judgment. The trial court held that Section 10 of the FPA restricts suits to any franchisee against its franchisor. Therefore, the trial court held that NJCAR, being a non-franchisee, lacked statutory standing and granted summary judgment to Ford.

On appeal, the Appellate Division reversed, finding NJCAR had associational standing under the three-part test in Hunt v. Washington State Apple Advertising Commission, 432 U.S. 333, 343 (1977), and rejected the trial court’s reading of the FPA’s standing limitation. Although the appellate court acknowledged that Section 10’s express language limited causes of action under the FPA to those brought by franchisees, the Appellate Division also noted that New Jersey’s liberal standing jurisprudence disfavored interpreting that language to create a bar “when there is real dispute between parties that have a real interest.” The appellate court thus determined that the trial court erred by finding that the statute barred NJCAR’s claim and remanded the matter for further proceedings on the merits.

The FPA. The court noted that the FPA is different from other statutes in that its explicit purpose is “to define the relationship and responsibilities of franchisors and franchisees in connection with franchise arrangements and to protect franchisees from unreasonable termination by franchisors that may result from a disparity of bargaining power.” Under the FPA, a “franchisor’ means a person who grants a franchise to another person,” and a “franchisee’ means a person to whom a franchise is offered or granted.” Section 10 states that “any franchisee may bring an action against its franchisor” for violations of the FPA.

NJCAR is not a franchisee. Applying the facts to the plain language of the statutory text, the court held that only franchisees can bring suit under the FPA. NJCAR is a trade association whose members consist of franchisee motor vehicle dealerships in New Jersey, including Lincoln dealerships. Because NJCAR is not a motor vehicle franchisee, it cannot bring suit under the FPA.

The FPA uses specific terms that set boundaries as to who can bring an FPA action, and against whom. By using those terms, the Legislature made it evident that a cause of action arising from the FPA must be specific to the individual franchisee-franchisor relationship. In plain and unambiguous language, the statute states that franchisees are the only ones who can bring actions against their franchisors for violations of the FPA. In drafting the statute, the Legislature rejected a broad reading of the cause of action.

The court noted that NJCAR is barred from seeking associational standing in bringing another claim on behalf of its members under a different law, statute, or theory of injury. This holding was limited solely to NJCAR’s ability to bring suit against a franchisor for injuries made cognizable and actionable under the FPA. Should NJCAR bring a suit under an appropriate theory of liability, a determination about its asserted associational standing will be made in that case.

The Case is No. 089378.

Judge: Louis, P.

Attorneys: W. Kirby Bissell (Bass Sox Mercer) for New Jersey Coalition of Automotive Retailers, Inc. Robert M. Palumbos (Duane Morris LLP) for Ford Motor Co. d/b/a Lincoln Motor Co.

Companies: New Jersey Coalition of Automotive Retailers, Inc.; Ford Motor Co. d/b/a Lincoln Motor Co.

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