Fair Franchise Practices Bill: Renewal

(UnhappyFranchisee.Com) Among other things, proposed PA House Bill 1620 (Fair Franchise Practices Bill) prohibits franchisors from refusing to renew a franchise agreement “for the purpose of converting the franchisee’s business to operation by the franchisor or by an affiliate of the franchisor.”

It states:

§ 915. Renewal.

(a) Fee.–A franchisor may impose a reasonable renewal franchise fee be paid to reimburse the franchisor for the franchisor’s reasonable and actual expenses directly attributable to the renewal.

(b) Authority.–

(1) A franchisor must provide the franchisee at least six months’ written notice of intent not to renew.

(2) Except as set forth in subsection (c), a franchisor may refuse to renew a franchise contract if one of the following applies:

(i) Termination of the franchise contract would be permitted under section 916 (relating to termination).

(ii) The franchisor and the franchisee agree in writing not to renew the franchise contract.

(iii) The franchisor:

(A) withdraws from distributing its products or services through franchises in the geographic market served by the franchisee; or

(B) ceases to offer new franchises.

(c) Prohibitions.–

(1) A franchisor may not impose as a condition of renewal that the franchisee cease to own or operate an independent business not within an unreasonable proximity of the franchised business.

(2) A franchisor may not refuse to renew a franchise contract for the purpose of converting the franchisee’s business to operation by the franchisor or by an affiliate of the franchisor.

What do you think of the Renewal provision of the proposed PA House Bill 1620 (Fair Franchise Practices Bill)?

Do you believe that making this provision law will be good for franchising?

Why or why not?  Please share a comment below.

Go back to the main page:  PA’s Responsible Franchise Practices Bill: Overview and Discussion

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TAGS:  Franchise Renewal, Franchise Renewal Agreements, franchise legislation, PA House Bill 1620, PA Responsible Franchise Practices Bill, Fair Franchising Legislation, Franchise laws, Pennsylvania State Rep. Peter Daley

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