VirginiaSB2402026 Regular SessionSenateWALLET

Retail franchise agreements; governing law, competition restrictions.

Sponsored By: Christopher T. Head (Republican)

Became Law

Summary

Retail franchise agreements; governing law; competition restrictions. Provides that retail franchise agreements shall be governed by the laws of the Commonwealth and prohibits any person from offering or entering into a franchise agreement that includes competition restrictions that extend beyond termination or expiration of the franchise agreement, except as a term of sale in the event that a franchisee sells a franchise to a third party or back to the franchisor. This bill is identical to HB 69.

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Bill Overview

Analyzed Economic Effects

3 provisions identified: 1 benefits, 0 costs, 2 mixed.

Stronger truth and disclosure in franchise sales

It is illegal to lie, hide key facts, or use tricks when offering or selling a franchise in Virginia. The seller must give you the franchise agreement and any disclosure papers the State Corporation Commission requires. This helps you see the terms before you buy.

Limits on noncompetes after a franchise ends

A franchise agreement cannot block you from doing the same retail business after it ends. If you sell your franchise at a price both sides agree to, the sale can include a limit on competing for up to two years after the sale. This protects your right to keep working, while allowing a short limit tied to a sale.

Who is covered by Virginia franchise law

This law covers a written deal that lets you run a retail business under the franchisor’s plan, uses the franchisor’s brand, and requires a franchise fee of $500 or more. It applies only when the deal needs you to set up or keep a place of business in Virginia. It does not cover some retail arrangements: sales under a marketing plan that are under 20% of your gross sales, or selling inside a store as a department if you are not required to buy from the store operator. Contracts covered by this law are governed by Virginia law.

Sponsors & Cosponsors

Sponsor

  • Christopher T. Head

    Republican • Senate

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 258 • No: 0

Senate vote 3/10/2026

House substitute agreed to by Senate

Yes: 40 • No: 0

House vote 3/6/2026

Passed House with substitute Block Vote

Yes: 97 • No: 0

House vote 3/3/2026

Reported from Labor and Commerce with substitute

Yes: 22 • No: 0

House vote 2/26/2026

Subcommittee recommends reporting with substitute

Yes: 7 • No: 0

Senate vote 2/6/2026

Read third time and passed Senate Block Vote

Yes: 40 • No: 0

Senate vote 2/5/2026

Engrossed by Senate Block Vote (Voice Vote)

Yes: 0 • No: 0

Senate vote 2/4/2026

Passed by for the day Block Vote (Voice Vote)

Yes: 0 • No: 0

Senate vote 2/4/2026

Constitutional reading dispensed Block Vote (on 1st reading)

Yes: 40 • No: 0

Senate vote 2/2/2026

Reported from Commerce and Labor

Yes: 12 • No: 0

Actions Timeline

  1. Acts of Assembly Chapter text (CHAP0554)

    4/13/2026Governor
  2. Approved by Governor-Chapter 554 (effective 7/1/2026)

    4/13/2026Governor
  3. Fiscal Impact Statement from State Corporation Commission (SB240)

    4/6/2026Senate
  4. Governor's Action Deadline 11:59 p.m., April 13, 2026

    3/31/2026Governor
  5. Enrolled Bill communicated to Governor on March 31, 2026

    3/31/2026Senate
  6. Signed by Speaker

    3/31/2026House
  7. Bill text as passed Senate and House (SB240ER)

    3/30/2026Senate
  8. Enrolled

    3/30/2026Senate
  9. Signed by President

    3/30/2026Senate
  10. Fiscal Impact Statement from State Corporation Commission (SB240)

    3/12/2026Senate
  11. House substitute agreed to by Senate (40-Y 0-N 0-A)

    3/10/2026Senate
  12. Passed House with substitute Block Vote (97-Y 0-N 0-A)

    3/6/2026House
  13. Engrossed by House - committee substitute

    3/6/2026House
  14. committee substitute agreed to

    3/6/2026House
  15. Read third time

    3/6/2026House
  16. Read second time

    3/5/2026House
  17. Committee substitute printed 26108684D-H1

    3/3/2026House
  18. Reported from Labor and Commerce with substitute (22-Y 0-N)

    3/3/2026House
  19. House subcommittee offered

    2/26/2026House
  20. Subcommittee recommends reporting with substitute (7-Y 0-N)

    2/26/2026House
  21. Assigned HCL sub: Subcommittee #2

    2/24/2026House
  22. Referred to Committee on Labor and Commerce

    2/12/2026House
  23. Read first time

    2/12/2026House
  24. Placed on Calendar

    2/12/2026House
  25. Read third time and passed Senate Block Vote (40-Y 0-N 0-A)

    2/6/2026Senate

Bill Text

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