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15 U.S.C. § 2803Trial and interim franchises

submitted 48 years ago by Pub. L. 95-297 to r/title-15-COMMERCE-AND-TRADE · 561 words · no verdicts yet

in plain englishAI-generated · not legal advice

The statutory limits on failing to renew a franchise do not apply to trial franchises or qualifying interim franchises. This section defines both types and states when a franchisor may end them after giving the required notice.

(a) The section 2802 rules do not apply when a franchise relationship is not renewed under (1) a trial franchise or (2) an interim franchise. (b) Definitions. (1) A “trial franchise” is a franchise entered on or after June 19, 1978, whose franchisee has never before been a party to a franchise with that franchisor, whose initial term is no more than one year, and which is written and clearly and prominently says: (i) it is a trial franchise; (ii) the initial term’s length; (iii) the franchisor may choose not to renew at the end of that term by notifying the franchisee under section 2804; and (iv) section 2802’s limits on nonrenewal do not apply. (2) “Trial franchise” does not include an unexpired part of a term of another kind of franchise transferred or assigned by a franchisee as allowed by the franchise or applicable State law. (3) An “interim franchise” is entered on or after June 19, 1978; its term, combined with all prior interim-franchise terms between the parties, is no more than three years; its effective date immediately follows a prior franchise for the premises that was not renewed based on the section 2802(b)(2)(E) determination and after that provision’s requirements were met; and it is written and clearly and prominently says (i) it is interim, (ii) its duration, and (iii) the franchisor may fail to renew at the end of that term based on a good-faith, normal-course decision to withdraw motor-fuel marketing through retail outlets in the relevant geographic market, if section 2802(b)(2)(E)(ii) and (iii) are met. (c) If section 2804’s notice rules are met, a franchisor may fail to renew (1) a trial franchise at the end of its initial term, or (2) an interim franchise at the end of its term if (A) the nonrenewal is based on the section 2802(b)(2)(E) determination and (B) section 2802(b)(2)(E)(ii) and (iii) are met.
the actual law source: uscode.house.gov ↗public domain
(a) Nonapplicability of statutory nonrenewal provisions

The provisions of section 2802 of this title shall not apply to the nonrenewal of any franchise relationship

(1)

under a trial franchise; or

(2)

under an interim franchise.

(b) Definitions

For purposes of this section—

(1)

The term “trial franchise” means any franchise—

(A)

which is entered into on or after June 19, 1978;

(B)

the franchisee of which has not previously been a party to a franchise with the franchisor;

(C)

the initial term of which is for a period of not more than 1 year; and

(D)

which is in writing and states clearly and conspicuously—

(i)

that the franchise is a trial franchise;

(ii)

the duration of the initial term of the franchise;

(iii)

that the franchisor may fail to renew the franchise relationship at the conclusion of the initial term stated in the franchise by notifying the franchisee, in accordance with the provisions of section 2804 of this title, of the franchisor’s intention not to renew the franchise relationship; and

(iv)

that the provisions of section 2802 of this title, limiting the right of a franchisor to fail to renew a franchise relationship, are not applicable to such trial franchise.

(2)

The term “trial franchise” does not include any unexpired period of any term of any franchise (other than a trial franchise, as defined by paragraph (1)) which was transferred or assigned by a franchisee to the extent authorized by the provisions of the franchise or any applicable provision of State law which permits such transfer or assignment, without regard to any provision of the franchise.

(3)

The term “interim franchise” means any franchise—

(A)

which is entered into on or after June 19, 1978;

(B)

the term of which, when combined with the terms of all prior interim franchises between the franchisor and the franchisee, does not exceed 3 years;

(C)

the effective date of which occurs immediately after the expiration of a prior franchise, applicable to the marketing premises, which was not renewed if such nonrenewal—

(i)

was based upon a determination described in section 2802(b)(2)(E) of this title, and

(ii)

the requirements of section 2802(b)(2)(E) of this title were satisfied; and

(D)

which is in writing and states clearly and conspicuously—

(i)

that the franchise is an interim franchise;

(ii)

the duration of the franchise; and

(iii)

that the franchisor may fail to renew the franchise at the conclusion of the term stated in the franchise based upon a determination made by the franchisor in good faith and in the normal course of business to withdraw from the marketing of motor fuel through retail outlets in the relevant geographic market area in which the marketing premises are located if the requirements of section 2802(b)(2)(E)(ii) and (iii) of this title are satisfied.

(c) Nonrenewal upon meeting statutory notification requirements

If the notification requirements of section 2804 of this title are met, any franchisor may fail to renew any franchise relationship—

(1)

under any trial franchise, at the conclusion of the initial term of such trial franchise; and

(2)

under any interim franchise, at the conclusion of the term of such interim franchise, if—

(A)

such nonrenewal is based upon a determination described in section 2802(b)(2)(E) of this title; and

(B)

the requirements of section 2802(b)(2)(E)(ii) and (iii) of this title are satisfied.

Source credit: (Pub. L. 95–297, title I, § 103, June 19, 1978, 92 Stat. 328.)

history & why it existsrecord from the source credit
  • 1978Enacted · Pub. L. 95-297 · 92 Stat. 328

A history note hasn’t been published yet. The record shows enactment by Pub. L. 95-297 on 1978-06-19.

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