§ 42-133m — Assignment of franchise. Automatic termination.

(a) A term in any franchise agreement between a franchisor and a franchisee which prohibits the voluntary assignment of the franchise to which they are parties, or which requires the franchisor's consent to such assignment, is ineffective and void as contrary to public policy unless such term provides that consent may be or is reasonably withheld. Reasonable withholding of consent includes, but is not limited to: (1) Material and substantial change of the other party's duties; (2) material and substantial increase of the other party's contractual burden of risk; (3) material and substantial impairment of the other party's opportunity to obtain return performance. (b) A term in any franchise agreement between a franchisor and franchisee which provides for the termination of the franchise to which they are parties upon the death of the franchisee is ineffective and void as contrary to public policy. If the franchisee at the time of death held an interest in a franchise, such interest may be passed by will or by intestacy to his spouse or child, or may be disposed of by his estate. The right of first refusal of such sale shall be granted to the franchisor. In the event of such disposition and for the purpose of avoiding or preventing such disposition, the franchisor shall be required to show that said disposition will materially and substantially prejudice such franchisor's rights under the terms of the then existing franchise agreement, as set forth in subsection (a) of this section.

Legislative History

(P.A. 77-493, S. 4.)