Does the New Jersey Franchise Practices Act Invalidate Forum Selection Clauses in Franchise Agreements?

One of the key questions under the New Jersey Franchise Practices Act is whether it invalidates clauses in a contract mandating the place a lawsuit under that contract must be filed.  This is called a “forum selection clause”

This issue was addressed in the recent case of The Business Store, Inc., v. Mail Boxes Etc., et. al., Civ. Action No. 11-3662 (D.N.J. February 16, 2012). In that case the court found that the forum selection clause mandating California as the place for lawsuits to be brought would not be enforced. The Court found that the following factors weighed in favor of using New Jersey as the proper forum under the facts of that case:

  1. The parties’ preferences
  2. Whether the claim arose elsewhere, i.e., in a different forum
  3. The convenience of the parties and witnesses
  4. The location of books and records
  5. The public interest

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