dissenting.
I respectfully dissent. Unlike the majority, I believe that the New Jersey Franchise Practices Act encompasses the distributorship agreement1 and accordingly, that the district court erred in holding that the defendants “have failed to demonstrate a reasonable probability of success on the merits of their claim that Fidelco was a Quincy franchisee.” Thus, I would reverse and remand to the district court for further proceedings consistent with this opinion.
I.
The New Jersey Franchise Practices Act defines a franchise as a “written arrangement for a definite or indefinite period, in which one person grants to another person a license to use a trade name ... and in which there is a community of interest in the marketing of goods and services_”2 *122NJ.Stat.Ann. 56:10-3(a). I shall initially address the majority’s holding that the distributorship agreement failed to grant Fi-delco a license to use the Quincy trade name.
A. The License.
Of the few precedents that have attempted to illuminate the requisites of the New Jersey Franchise Act, Neptune T. V & Appliance Service v. Litton Microwave, Etc., 190 N.J.Super. 153, 462 A.2d 595 (App.Div.1983), is the most recent and perhaps the most instructive. In Neptune, the appellate division considered whether a written service contract between Neptune, a repairer of commercial appliances, and Litton, a manufacturer of microwave ovens, constituted a franchise within the meaning of the Act. Id. Pursuant to the agreement, Neptune was designated as an “authorized Litton service source” and required to repair Litton ovens both during and after the warranty period.3 Id. Moreover, the contract permitted Neptune to represent itself as an authorized service source in its advertising, letterheads, calling cards, and service vehicle markings.
In determining whether the agreement conferred a license upon Neptune to use Litton’s trademark, the court asserted that the limited use by a party of another’s tradename in its own business advertising does not ipso facto constitute a license within the intendment of the Franchise Act. Id. at 599. Instead, the court noted that:
[A] hallmark of the franchise relationship is the use of another’s trade name in such a manner as to create a reasonable belief on the part of the consuming public that there is a connection between the trade name licensor and licensee by which the licensor vouches, as it were, for the activity of the licensee in respect of the subject of the trade name.
Id. (citations omitted). Observing that Neptune’s status as a service center permitted the consuming public to expect a “quality controlled service authorized by Litton itself,” the court concluded that the agreement constituted a license to use Litton’s tradename.
Relying principally upon Neptune and Finlay & Associates v. Borg Warner, 146 N.J.Super. 210, 369 A.2d 541 (Super.Ct. Law Div.1976), the district court in the present case held that the distributorship agreement failed to confer a license upon Fidelco to use the Quincy tradename.4 Curiously, the district court’s attempt to distinguish Neptune from the facts before it focused upon the absence of a warranty service provision in the Fidelco-Colt agreement:
Unlike Neptune, the agreements between Colt and Fidelco do not contain the elaborate and detailed specifications for providing warranty service found in the Finlay case. On the contrary, in the instant case the contractual provision granting use of Colt’s marks does not even mention service. This is a critical distinction when one considers that the New Jersey act defines a franchise as a “written agreement ... to ... license ... use [of] a trade name_” N J.Stat. Ann. 56:10-3(a).
*123In essence, the district court has transformed the contractual duty to perform warranty repair service into a prerequisite for a trademark license. Nothing in Neptune suggests such a narrow reading of the New Jersey Franchise Act. A licensor may create a reasonable belief on the part of the consuming public that there is a connection between itself and a licensee in any one of a number of ways, the performance of warranty repair service being only one. Notably, Neptune involved an attempt by an appliance repairer to enjoin the termination of an authorized service contract. Because repair service was the primary incident of the parties' agreement, it is not surprising that the Neptune, court fixated upon it in determining the existence of a trademark license. However, Neptune’s “reasonable belief” test applies to contexts where, as here, repair service is not the predominant element of a contractual relationship. Importantly, the distributorship agreement between Fidelco and Colt was primarily concerned with the marketing of Quincy compressors and replacement parts.5 I therefore conclude that the district court’s imposition of a warranty service requirement constituted an error of law.
In affirming the order of the district court, the majority observes that “Fidelco could use the Quincy name only in a limited sense and that the Quincy brand name could not be used in Fidelco's business name.” Maj. at 120. See Finlay, 369 A.2d at 546. The majority concludes: “In our view, if this limited agreement constitutes a license to use a trademark, then any business selling a name brand would, under New Jersey law, necessarily be considered as holding a license.” I disagree.
In Neptune, the court implicitly rejected the notion that the issuance of a trademark license is conditioned on the franchisee’s ability to use the franchisor’s trade name in the former’s business title. 462 A.2d at 598-99. The district court itself observed that “the continuing validity of [Finlay’s] ... rather narrow definition- of ‘license’ is somewhat cast into doubt by the subsequent decision of the appellate division in Neptune....” Although the majority also explicitly recognized Finlay’s lack of continuing vitality, it nonetheless relied upon it in rejecting Fidelco’s claim. Maj. at 119-120. Inexplicably, the majority completely ignores Neptune’s test for determining the existence of a license — whether a trade name is used “in such a manner as to create a reasonable belief on the part of the consuming public that there is a connection between the trade name licensor and licensee_” 462 A.2d ait 599. Moreover, both the district court and the majority ignored the impact of considerable evidence demonstrating that Colt indeed “vouched for the activity” of Fidelco.6 See id. at 599. The district court found that Colt representatives would personally contact Fidelco customers in an effort to close sales; that Colt representatives would personally refer sales to Fidelco; that Colt and Fidelco jointly paid for advertising of Quincy products; and most importantly, that Fi-delco in fact performed warranty service pursuant to the 1985 letter agreement.7 Accordingly, I conclude that it was error to hold that Fidelco did not have a license to use the Quincy tradename. See Tustin v. Heckler, 749 F.2d 1055, 1060 (3d Cir.1984).
B. Community of Interest.
In addition to its comprehensive articulation of the Franchise Act’s license require*124ment, Neptune endeavored to define the elusive notion of a “community of interest.” Observing that the Act itself had failed to imbue the phrase with any substantive content, the Neptune court examined franchise acts from other jurisdictions. 462 A.2d at 599-600. Initially, the court observed that “franchising is essentially a method of doing business or a method of distributing which combines the advantages of an integrated corporate network with those advantages inherent in individual business proprietorships.” Id. at 600. The court proceeded to note the manifestations of interdependence characteristic of the franchise relationship. The franchisor, it observed, is able to market a potentially successful product without expending the capital, manpower, or organization necessary to develop it. In addition to utilizing the franchisee’s capital and labor, the franchisor also avoids “the inefficiencies and costs of centralized management and control of a large and geographically diverse organization.” Id. The franchisee, on the other hand, acquires an instant public reputation based upon the good will established by other franchises. Moreover, the franchisee also benefits from the franchisor’s “standardized management system, its training, guidance, and supervision.” Id. The Neptune court concluded that a franchise relationship is:
[Bjased on the complex of mutual and continuing advantages which induced the franchisor to reach his ultimate consumer through entities other than his own which, although legally separate, are nevertheless economically dependent upon him.
Id. at 601.
Purporting to rely upon Neptune's “continuing advantage and interdependence” test, the district court held, and the majority agrees, that the distributorship agreement in the present case did not contain the requisite community of interest. In order to support their respective holdings, both courts relied, in part, upon Grand Light & Supply Co. v. Honeywell, Inc., 771 F.2d 672 (2d Cir.1985), a Second Circuit opinion construing the Connecticut Franchise Act. Recognizing the dangers inherent in overextending the scope of the Connecticut Act, Grand Light asserted that the franchisor’s “control” of the franchisee is the essential precondition of the franchise relationship. Id. at 678. Among the indicia of control noted by the court were the “franchisor’s auditing of books and inspection of premises, control of lighting, employee uniforms, prices, trading stamps and hiring, establishing of sales quotas and management training and financial support.” Id.
Interpreting Neptune’s recognition of a franchisee’s vulnerability to unconscionable loss as an invitation to adopt Grand Light’s “control test,” the district court in the present case observed:
What defendants have failed to demonstrate is that this particular distributor is subject to the whim, direction, and control of a more powerful entity whose withdrawal from the relationship would shock the court’s sense of equity.
See Neptune, 462 A.2d at 601. Noting that Colt exercises no control over the training, hiring, number, or qualifications of Fidelco employees, the court concluded that the agreement failed to create a community of interest.8 Similarly, the majority predicates its affirmance of the district court’s holding on the fact that “Fidelco failed to establish that it was subject to the whim, direction and control of a more powerful entity — ” Maj. at 120. I conclude that the majority’s and the district court’s reliance on Grand Light’s control test constituted an error of law.
Initially, I note that the control test is predicated upon a reading of the Connecticut rather than upon the New Jersey Franchise Act. Unlike the New Jersey Act, the Connecticut statute does not even contain a “community of interest” requirement:
(b) Franchise means an oral or written agreement or arrangement in which (1) a franchisee is granted the right to engage in the business of offering, selling or *125distributing goods or services under a marketing plan or system prescribed in substantial part by a franchisor ...; and (2) the operation of a franchisee’s business pursuant to such a plan or system is substantially associated with the franchisor’s trademark, service make, trade name, logotype, advertising or other commercial symbol designating the franchisor or its affiliate....
Conn.Gen.Stat. § 42-133e(b). As the district court observed, “Connecticut’s statutory definition of a franchise ... amounts to a less inclusive definition than that found in the New Jersey Act.”9 Arguably, Connecticut’s narrow statutory definition of a franchise supports the Second Circuit’s assertion of a control test.10 However, nothing in either the New Jersey Act or in Neptune itself contemplates the degree of franchisor control adopted by the majority in the present case. The New Jersey Act simply does not contain language comparable to Connecticut’s requirement that a franchisee adopt “a marketing plan or system prescribed in substantial part by a franchisor.” Moreover, Neptune’s “mutual advantage” standard requires a franchise relationship characterized by interdependence rather than by control. Thus, rather than sanction adoption of the control test, Neptune’s reference to an “unconscionable loss” merely reflects the appellate division’s recognition that a franchisee is generally reliant upon a franchisor for its economic well being.
In the instant case, Colt markets its Quincy products exclusively through distributors who are required to maintain both physical facilities in their primary areas of responsibility and adequate levels of inventory. Colt’s exclusive reliance on distributors to market its products strongly suggests a conventional franchise relationship. More specifically, as a condition of its agreement, Colt’s employees inspected Fi-delco’s New Jersey facility and insisted that it be upgraded to adequately display and service Quincy products. From January 1986 through March 1987, the parties engaged in a series of cooperative efforts designed to increase sales of Quincy products. Colt representatives conducted sales meetings at Fidelco facilities at which new products were introduced, technical questions were answered, and product differences were explained. In a December 15, 1986 correspondence, Colt emphasized the team relationship between it and Fidelco, stating: “We have many plans that will make this next year very successful for us and our distributors ... the Quincy team. To be the best, we need to work together closely” (emphasis added). I believe that these facts demonstrate a community of interest between the parties.
Finally, in deciding that Fidelco was not entitled to the Franchise Act’s protection, the district court characterized the defendant as an “industrial supermarket” that sells “at least eight different brands of compressors.” However, § 56:10-4 of the Act requires, among other things, that a franchisee derive at least 20% of its gross sales and $35,000 in its revenues from the franchisor. To the extent that Fidelco complies with these statutory requirements, its status as an “industrial supermarket” is irrelevant.
Based on the preceding analysis, I would reverse the order- of the district court and remand the case for further proceedings consistent with this opinion.
. This litigation is brought under the diversity statute, 28 U.S.C. § 1332(a). The parties and the district court have applied New Jersey law. We do the same.
. The scope of the Act is further limited by § 56:10-4:
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 ... 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.
The district court found that Fidelco had satisfied the first two requirements of § 56:10-4. With respect to the third element, however, the court observed that Fidelco had employed a rather circuitous method of demonstrating that it derived at least 20% of its gross sales from Colt. For the purposes of this opinion, I assume, as did the district court, that Fidelco’s figures are accurate. Any continuing controver*122sy regarding this issue can easily be resolved during discovery.
. The contract additionally incorporated the terms and conditions of the Litton Service Policy and Procedural Guide, a manual containing detailed provisions regarding the performance of warranty work. 462 A.2d at 597.
. Paragraph 16 of the distributorship agreement precluded Fidelco from using the relevant trade-name as part of its business title but permitted the defendant to display the Quincy trademark in a manner consistent with plaintiffs advertising policies:
The words "Quincy Compressor" and/or any parts of said name or trademarks of Quincy Compressor, or of Colt Industries, its subsidiaries and affiliates or any simulation thereof will not be used as part of Distributor’s business name; but, nevertheless, [Fidelco] may display "Quincy Compressor” in a manner consistent with Quincy Compressor advertising policies as part of advertising of the product and indicating that [Fidelco] is a Distributor of Quincy Compressor products covered by this Agreement....
.Even if the performance of repair service was a pre-condition for the issuance of a trademark license, reversal would still be appropriate. It is undisputed that a 1985 letter agreement between Colt and Fidelco granted the latter the right to perform repair service. Fidelco continued to perform repair service pursuant to the contract until Colt’s termination of the distributorship agreement.
. Fidelco served as Colt’s sole distributor in Connecticut and in Northern New Jersey. The remainder of New Jersey, however, was served by another distributor.
. Although it is not a precondition for the grant of a trademark license, the right to perform warranty service is relevant to the issue of whether a franchisor vouched for the activity of a putative franchisee. See Neptune, 462 A.2d at 599.
. Considering Colt's and Fidelco’s sharing of advertising costs, the court similarly noted that “Colt does not specify nor require any particular advertising” (emphasis added).
. It is not clear how the district court could possibly have recognized this distinction between the Connecticut and New Jersey Acts and yet have adopted the Grand Light test.
. 1 do not attempt to determine whether the Connecticut Distributorship Agreement between Colt and Fidelco constitutes a franchise under the Connecticut Act.