The Franchise Memorandum

A federal court in New Jersey recently declined to issue an order invalidating the class action waiver and arbitration provision used by franchisor The UPS Store, Inc. and certain TUPSS franchisees’ (collectively, TUPSS) and it would not bar TUPSS from soliciting such waivers from their customers going forward. Tripicchio v. UPS Store, Inc., 2023 WL 6307528 (D.N.J. Sept. 28, 2023). The customers filed suit against TUPSS, purporting to represent a class of customers who were charged more than $2.50 for notary services in violation of New Jersey law. The customers’ motion relates to a class action waiver that TUPSS's New Jersey franchisees secure from each customer as a condition of receiving notary services.

The customers sought two types of relief. First, the customers requested that the court invalidate any executed waivers that TUPSS or any New Jersey franchisee had received from any customer to date. The court denied this request and declined to address whether the waiver was enforceable because the court found it had no authority to declare the class action waiver invalid before any party attempts to enforce the waiver. Second, the customers requested that the court mandate that TUPSS modify the waivers to provide customers with detailed disclosures about the instant litigation, permit customers to opt out of the waiver before receiving notary services, and create a court-approved website, at TUPSS’s expense, with information about the instant litigation. The customers argued that the waiver was misleading because it does not give notice of the instant litigation. The court denied this request as well, holding that the customers had not established (1) specific harm that would flow from permitting TUPSS to employ their current waiver and (2) justification for ordering the requested injunctive relief. The court did, however, acknowledge that once the customers move for class certification, the court may invalidate a future attempt to use any waiver secured after September 2021 to preclude customers who received notary services before September 2021 from joining the class.