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CARLO C. GELARDI CORP. v. MILLER BREWING CO.

May 27, 1976

CARLO C. GELARDI CORP., a New Jersey Corporation
v.
MILLER BREWING COMPANY, a Wisconsin Corporation, et al.



The opinion of the court was delivered by: BARLOW

 On May 7th, 1976, this Court signed an order to show cause and entered an order temporarily restraining Miller from discontinuing the sale of beer products to the plaintiff. A hearing was held on May 17th, 1976, at which time the parties were given the opportunity to present evidence relevant to whether a preliminary injunction should issue directing Miller to comply with the notice provisions of the Act, id. § 56:10-5. At the hearing and in its briefs, Miller questioned whether its relationship with the plaintiff constituted a "franchise" within the meaning of the Act. The Court extended the temporary restraining order for another ten days, pending determination of the motion for a preliminary injunction.

 The Act 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."

 Id. § 56:10-3(a). The Act, however, does not apply to all franchises:

 
"This act applies only to a franchise (1) the performance of which contemplates or requires the franchisee to establish or maintain a place of business within the State of New Jersey, (2) where gross sales of products or services between the franchisor and franchisee covered by such franchise shall have exceeded $35,000.00 for the 12 months next preceding the institution of suit pursuant to this act, and (3) where more than 20% of the franchisee's gross sales are intended to be or are derived from such franchise."

 Id. § 56:10-4.

 The thrust of Miller's argument is that the distributorship contract involved in this case does not contemplate or require the plaintiff to establish or maintain a "place of business" within the meaning of the Act. The Act defines "place of business" as

 
"a fixed geographical location at which the franchisee displays for sale and sells the franchisor's goods . . . . Place of business shall not mean an office, a warehouse, a place of storage, a residence or a vehicle."

 Id. § 56:10-3(f).

 It is clear that the performance of the distributorship contract contemplates or requires the establishment or maintenance of much more than "an office" or "a warehouse" or "a place of storage". See, e.g., Distributorship Agreement para. 2. Thus, this case does not involve one of the explicit exceptions set forth in the second sentence of § 56:10-3(f), *fn1" and Miller's argument must fail unless the plaintiff's facilities do not satisfy the general definition of "place of business".

 Since it is beyond dispute that the plaintiff in fact sold Miller products from a fixed geographical location in Somerville, New Jersey, and there is also credible testimony to the effect that Miller products were displayed for sale at that facility, *fn2" the crucial question is whether these things were contemplated or required by the distributorship contract. In this regard, the following passages from that contract are significant:

 
". . . Distributor undertakes to market and promote actively and aggressively the sale of Miller beer to retailers and other persons in Distributor's Area to whom Distributor ...

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