§ 5-55-4. Franchised dealers and distributors.
(a) Franchisor's duty of disclosure. A franchisor shall disclose, in writing, to any prospective franchisee the following
information before any agreement is concluded:
(1) The gallonage-volume history, if any, of the location under negotiation for and during
the three-year (3) period immediately past or for the entire period that the location
has been supplied by the supplier, whichever is shorter.
(2) Projections, if any, as to gallonage consumption at the location under negotiation.
(3) The name and last-known address of the previous dealers for the last three (3) years,
or for the entire period during which the location has been supplied by the supplier,
whichever is shorter, and the reason for the termination of each dealer's agreement.
(4) Any legally binding commitments for the sale, demolition, or other disposition of
the location in effect prior to the termination date of the agreement.
(5) The training programs, if any, and the specific goods and services the supplier will
provide without cost to the dealer.
(6) Full disclosure of any and all obligations that will be required of the dealer, including,
but not limited to, any obligation to exclusively deal in any of the products of the
supplier, its subsidiaries, or any other company or any advertising and promotional
items that the dealer must accept.
(7) Full disclosure of all restrictions on the sale, transfer, renewal, and termination
of the agreement.
(b) Franchise agreements. Every franchise agreement, as defined in this chapter, is subject to the nonwaivable
provisions described in this subsection, whether or not they are expressly stated
in the agreement.
(1) Each retail dealer and each distributor as franchisee has the right to cancel a franchise
agreement within seven (7) days after the day on which the agreement was signed, by
giving the franchisor written notice of the cancellation. Upon giving the franchisor
that notice, all money, equipment, and merchandise in satisfactory condition loaned,
sold, or delivered to the franchisee under the agreement shall be returned to the
franchisor for full credit, or the cash equivalent. If the franchisor is the owner
of the real estate upon which the franchisee conducted his or her business, the franchisee
shall deliver full possession of the real estate to the franchisor. The franchisee
shall pay the franchisor for all lawful indebtedness remaining due after the return
of merchandise and equipment.
(2) No agreement shall contain any provision that in any way limits the right of either
party to trial by jury, the interposition of counterclaims, or cross-claims.
(3) The price at which a franchisee sells products shall not be fixed or maintained by
a franchisor, nor shall any person seek to do so, nor shall the price of products
be subject to enforcement or coercion by any person in any manner. Each agreement
shall have the legend: "Nothing in this agreement shall be construed to prohibit a
franchisor from suggesting prices and counseling with franchisees concerning prices.
Price fixing or mandatory prices for any products covered in this agreement shall
be prohibited. A service station dealer or wholesale distributor may sell any products
listed in this agreement for a price which he or she alone may decide.�
(4) The franchisee may assign the franchise agreement; provided, that the franchisor consents
to that assignment, which consent is not unreasonably withheld.
(5) If the franchise agreement requires the franchisee to provide a cash deposit in advance
for the use of the service station or delivery of fuel, except as advance payment
in whole or in part for the product ordered, the deposit may be held by the franchisor;
may be used by the franchisor in his or her business; and may be retained for the
term of the agreement unless it is sooner terminated. Interest at a rate of at least
seven percent (7%) shall be paid to the franchisee at least annually. Within ninety
(90) days after the termination of the agreement, the deposit shall be returned, together
with any unpaid interest on that deposit at the rate of at least seven percent (7%)
per year.
(6) No agreement shall provide for the use of any promotion, premium, coupon, give-away,
or rebate in the operation of the business, except that a dealer may participate in
a promotion, premium, coupon, give-away, or rebate sponsored by the franchisor, if
the dealer desires.
(c) Termination of franchise agreements. No refiner or distributor, as franchisor, shall, directly or through any officer,
agent, or employee, terminate, cancel, or fail to renew a franchise agreement, except
for good cause. For purposes of this section, "good cause� includes, but is not limited
to:
(1) With respect to franchise agreements where the franchisor leases real property and
improvements to the franchisee, the agreement may be terminated; provided, that there
is a lawful termination of lease, license, or other non-ownership under which the
franchisor shall be entitled to possession or control of that real property and improvements;
(2) Mutual agreement to terminate;
(3) Criminal misconduct or violation of law relating to the business or premises of the
dealer;
(4) Fraud, which includes, but is not limited to, the following:
(i) Adulteration of the franchisor's products;
(ii) Commingling of funds;
(iii) Misleading or misbranding of gasoline;
(iv) Trademark violations;
(v) Intentionally overcharging or deceiving customers as to repairs that are not needed;
(vi) Intentionally deceiving the franchisor regarding a term of the lease;
(5) Failure of the dealer to open for business for an unreasonable period of time; provided,
that the failure is not due to matters beyond the dealer's control;
(6) Bankruptcy or insolvency of the dealer;
(7) Nonpayment of rent, or loss by the franchisor of its legal right to grant possession
of leased premises to the dealer;
(8) Public condemnation or other public taking;
(9) Nonpayment of merchandise or other indebtedness due to the franchisor; or
(10) Substantial noncompliance with the obligations of the franchise agreement.
(d) Notice of termination. The franchisor shall give the franchisee advance, written notice of termination, cancellation,
or intent not to renew. Notwithstanding any statute to the contrary, advance notice
required by this subsection precedes the effective date of the termination, cancellation,
or nonrenewal by at least:
(1) Where the asserted cause is substantial noncompliance with the obligations of the
franchise agreement, the franchisor shall give the franchisee seven (7) days from
receipt of notice in which to correct any breach. If the breach has not been corrected
within the seven-day (7) period, the franchisor may terminate the franchise agreement
in accordance with the notice requirements of the franchise agreement;
(2) One hundred twenty (120) days where the asserted cause is among those specified in
subsection (c)(1); or
(3) Seven (7) days where the asserted cause is among those specified in subsections (c)(3),
(c)(4), and (c)(5); provided, that the franchisee has seven (7) days from receipt
of the notice in which to correct the matter asserted as cause for terminating the
agreement.
(e) Compensation on termination of franchise. Upon the termination of any franchise, the franchisee shall be entitled to fair and
reasonable compensation by the franchisor at the then-current wholesale prices, for
the franchisee's merchantable inventory, supplies, equipment, and furnishings purchased
by the franchisee from the franchisor; provided, that in that event the franchisor
has the right to apply the proceeds against any existing indebtedness owed to the
franchisor by the franchisee; and provided, that the repurchase obligation is conditioned
upon there being no other claim or liens against the products by or on behalf of other
creditors of the franchisee.