§ 597.155 — Termination of franchise by supplier: Notice; effective date

Nevada § 597.155

• Jurisdiction: Nevada
• Title 52: TRADE REGULATIONS AND PRACTICES
• Ch. 597: Miscellaneous

Text

1. Except as otherwise provided in subsection 2, a supplier must, at least 90 days before he or she terminates or refuses to continue any franchise with a wholesaler or causes a wholesaler to resign from any franchise, send a notice by certified mail, return receipt requested, to the wholesaler. The notice must include:
(a) The reason for the proposed action and a description of any failure of the wholesaler to comply with the terms, provisions and conditions of the franchise alleged by the supplier pursuant to NRS 597.160 ; and
(b) A statement that the wholesaler may correct any such failure within the period prescribed in NRS 597.160 .
2. Any action taken by a supplier pursuant to subsection 1 becomes effective on the date the wholesaler receives the notice required pursuant to subsection 1 if the wholesaler:
(a) Has had his or her license to sell alcoholic beverages issued pursuant to state or federal law revoked or suspended for more than 31 days;
(b) Is insolvent pursuant to 11 U.S.C. § 101;
(c) Has had an order for relief entered against him or her pursuant to 11 U.S.C. §§ 701 et seq.;
(d) Has had his or her ability to conduct business substantially affected by a liquidation or dissolution;
(e) Or any other person who has a financial interest in the wholesaler of not less than 10 percent and is active in the management of the wholesaler has been convicted of, or has pleaded guilty or guilty but mentally ill to, a felony and the supplier determines that the conviction or plea substantially and adversely affects the ability of the wholesaler to sell the products of the supplier;
(f) Has committed fraud or has made a material misrepresentation in his or her dealings with the supplier or the products of the supplier;
(g) Has sold alcoholic beverages which the wholesaler received from the supplier to:
(1) A retailer who the wholesaler knows or should know does not have a place of business where the retailer is entitled to sell alcoholic beverages within the marketing area of the wholesaler; or
(2) Any person who the wholesaler knows or should know sells or supplies alcoholic beverages to any retailer who does not have a place of business where the retailer is entitled to sell alcoholic beverages within the marketing area of the wholesaler;
(h) Has failed to pay for any product ordered and delivered pursuant to the provisions of an agreement between the supplier and wholesaler within 7 business days after the supplier sends to the wholesaler a written notice which includes a statement that the wholesaler has failed to pay for the product and a demand for immediate payment;
(i) Has made an assignment for the benefit of creditors or a similar disposition of substantially all the assets of his or her franchise;
(j) Or any other person who has a financial interest in the wholesaler has:
(1) Transferred or attempted to transfer the assets of the franchise, voting stock of the wholesaler or voting stock of any parent corporation of the wholesaler; or
(2) Changed or attempted to change the beneficial ownership or control of any such entity,
Ê unless the wholesaler first notified the supplier in writing and the supplier has not unreasonably withheld his or her approval; or
(k) Discontinues selling the products of the supplier, unless:
(1) The discontinuance is a result of an accident which the wholesaler was unable to prevent;
(2) The wholesaler has, if applicable, taken action to correct the condition which caused the accident; and
(3) The wholesaler has notified the supplier of the accident if he or she has discontinued selling the products of the supplier for more than 10 days.

Legislative History

(Added to NRS by 1995, 1567 ; A 2007, 1466 )