Trial and interim franchises

Source Credit

(a) Nonapplicability of statutory nonrenewal provisions
The provisions of section 2802 of this title shall not apply to the nonrenewal of any franchise relationship—
(1) under a trial franchise; or
(2) under an interim franchise.
(b) Definitions
For purposes of this section—
(1) The term "trial franchise" means any franchise—
(A) which is entered into on or after June 19, 1978;
(B) the franchisee of which has not previously been a party to a franchise with the franchisor;
(C) the initial term of which is for a period of not more than 1 year; and
(D) which is in writing and states clearly and conspicuously—
(i) that the franchise is a trial franchise;
(ii) the duration of the initial term of the franchise;
(iii) that the franchisor may fail to renew the franchise relationship at the conclusion of the initial term stated in the franchise by notifying the franchisee, in accordance with the provisions of section 2804 of this title, of the franchisor's intention not to renew the franchise relationship; and
(iv) that the provisions of section 2802 of this title, limiting the right of a franchisor to fail to renew a franchise relationship, are not applicable to such trial franchise.
(2) The term "trial franchise" does not include any unexpired period of any term of any franchise (other than a trial franchise, as defined by paragraph (1)) which was transferred or assigned by a franchisee to the extent authorized by the provisions of the franchise or any applicable provision of State law which permits such transfer or assignment, without regard to any provision of the franchise.
(3) The term "interim franchise" means any franchise—
(A) which is entered into on or after June 19, 1978;
(B) the term of which, when combined with the terms of all prior interim franchises between the franchisor and the franchisee, does not exceed 3 years;
(C) the effective date of which occurs immediately after the expiration of a prior franchise, applicable to the marketing premises, which was not renewed if such nonrenewal—
(i) was based upon a determination described in section 2802(b)(2)(E) of this title, and
(ii) the requirements of section 2802(b)(2)(E) of this title were satisfied; and
(D) which is in writing and states clearly and conspicuously—
(i) that the franchise is an interim franchise;
(ii) the duration of the franchise; and
(iii) that the franchisor may fail to renew the franchise at the conclusion of the term stated in the franchise based upon a determination made by the franchisor in good faith and in the normal course of business to withdraw from the marketing of motor fuel through retail outlets in the relevant geographic market area in which the marketing premises are located if the requirements of section 2802(b)(2)(E)(ii) and (iii) of this title are satisfied.
(c) Nonrenewal upon meeting statutory notification requirements
If the notification requirements of section 2804 of this title are met, any franchisor may fail to renew any franchise relationship—
(1) under any trial franchise, at the conclusion of the initial term of such trial franchise; and
(2) under any interim franchise, at the conclusion of the term of such interim franchise, if—
(A) such nonrenewal is based upon a determination described in section 2802(b)(2)(E) of this title; and
(B) the requirements of section 2802(b)(2)(E)(ii) and (iii) of this title are satisfied.

History

(Pub. L. 95–297, title I, §103, June 19, 1978, 92 Stat. 328.)