15 U.S.C. § 2806: Relationship of statutory…

Summary

When the federal rules here apply to ending a franchise or not renewing one, states and local governments cannot make different laws about those endings or the notices that must be given. Any state rule on those topics must match the federal rule. Also, states may not require a payment for a franchisee’s goodwill (the business’s customer value) when a franchise ends or is not renewed under these federal rules. These federal rules do not by themselves allow or block transfers of a franchise. Transfers are allowed or limited by the franchise agreement or by state law. States may set the terms for transferring a franchise to a named successor if the franchisee dies.

Title 15, §2806

Commerce and Trade, Source: USLM XML via OLRC

(a)Termination or nonrenewal of franchise

(1)To the extent that any provision of this subchapter applies to the termination (or the furnishing of notification with respect thereto) of any franchise, or to the nonrenewal (or the furnishing of notification with respect thereto) of any franchise relationship, no State or any political subdivision thereof may adopt, enforce, or continue in effect any provision of any law or regulation (including any remedy or penalty applicable to any violation thereof) with respect to termination (or the furnishing of notification with respect thereto) of any such franchise or to the nonrenewal (or the furnishing of notification with respect thereto) of any such franchise relationship unless such provision of such law or regulation is the same as the applicable provision of this subchapter.

(2)No State or political subdivision of a State may adopt, enforce, or continue in effect any provision of law (including a regulation) that requires a payment for the goodwill of a franchisee on the termination of a franchise or nonrenewal of a franchise relationship authorized by this subchapter.

(b)Transfer or assignment of franchise

(1)Nothing in this subchapter authorizes any transfer or assignment of any franchise or prohibits any transfer or assignment of any franchise as authorized by the provisions of such franchise or by any applicable provision of State law which permits such transfer or assignment without regard to any provision of the franchise.

(2)Nothing in this subchapter shall prohibit any State from specifying the terms and conditions under which any franchise or franchise relationship may be transferred to the designated successor of a franchisee upon the death of the franchisee.

Editorial Notes

Amendments

1994—Subsec. (a). Pub. L. 103–371, § 5(1), redesignated existing provisions as par. (1) and added par. (2). Subsec. (b). Pub. L. 103–371, § 5(2), redesignated existing provisions as par. (1) and added par. (2).

§2806 Relationship of Statutory Provisions to State and Local Laws

Summary

Title 15, §2806

Notes & Related Subsidiaries

Editorial Notes

Amendments

Citations & Metadata