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15 U.S.C. § 2803 — Trial and interim franchises

Federal law — U.S. Code and appendices · legal_authorities

15 U.S.C. § 2803 — Trial and interim franchises

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Stable record: federal_law:legal_authorities:record_usc_a74eb3a81e1666bb64a29060
Source file: Laws/federal/codes/united-states-code/title-15/section-2803-trial-and-interim-franchises--b4c58e8f44.md
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Source location: Title 15, Chapter 55, § 2803; chapter-055-petroleum-marketing-practices.md

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**(a) Nonapplicability of statutory nonrenewal provisions** The provisions of [section 2802 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section2802&num=0&edition=prelim) 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](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section2804&num=0&edition=prelim), of the franchisor’s intention not to renew the franchise relationship; and (iv) that the provisions of [section 2802 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section2802&num=0&edition=prelim), 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](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section2802/b/2/E&num=0&edition=prelim), and (ii) the requirements of [section 2802(b)(2)(E) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section2802/b/2/E&num=0&edition=prelim) 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](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section2804&num=0&edition=prelim) 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](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section2802/b/2/E&num=0&edition=prelim); and (B) the requirements of section 2802(b)(2)(E)(ii) and (iii) of this title are satisfied.

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Federal law — U.S. Code and appendices · legal_authorities

15 U.S.C. § 2802 — Franchise relationship

**(a) General prohibition against termination or nonrenewal** Except as provided in subsection (b) and [section 2803 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section2803&num=0&edition=prelim), no franchisor engaged in the sale, consignment, or distribution of motor fuel in commerce may— (1) terminate any franchise (entered into or renewed on or after June 19, 1978) prior to the conclusion of the term, or the expiration date, stated in the franchise; or (2) fail to renew any franchise relationship (without regard to the date on which the relevant franchise was entered into or renewed). **(b) Precondition and grounds for termination or nonrenewal** (1) Any franchisor may terminate any franchise (entered into or renewed on or after June 19, 1978) or may fail to renew any franchise relationship, if— (A) the notification requirements of [section 2804 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section2804&num=0&edition=prelim) are met; and (B) such termination is based upon a ground described in paragraph (2) or such nonrenewal is based upon a ground described in paragraph (2) or (3). (2) For purposes of this subsection, the following are grounds for termination of a franchise or nonrenewal of a franchise relationship: (A) A failure by the franchisee to comply with any provision of the franchise, which provision is both reasonable and of material significance to the franchise relationship, if the franchisor first acquired actual or constructive knowledge of such failure— (i) not more than 120 days prior to the date on which notification of termination or nonrenewal is given, if notification is given pursuant to [section 2804(a) of this title](https://uscode.house.gov/view.xh

Source: Supplied U.S. Code snapshot — release unconfirmed · 15 U.S.C. § 2802

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Federal law — U.S. Code and appendices · legal_authorities

15 U.S.C. § 2804 — Notification of termination or nonrenewal of franchise relationship

**(a) General requirements applicable to franchisor** Prior to termination of any franchise or nonrenewal of any franchise relationship, the franchisor shall furnish notification of such termination or such nonrenewal to the franchisee who is a party to such franchise or such franchise relationship— (1) in the manner described in subsection (c); and (2) except as provided in subsection (b), not less than 90 days prior to the date on which such termination or nonrenewal takes effect. **(b) Additional requirements applicable to franchisor** (1) In circumstances in which it would not be reasonable for the franchisor to furnish notification, not less than 90 days prior to the date on which termination or nonrenewal takes effect, as required by subsection (a)(2)— (A) such franchisor shall furnish notification to the franchisee affected thereby on the earliest date on which furnishing of such notification is reasonably practicable; and (B) in the case of leased marketing premises, such franchisor— (i) may not establish a new franchise relationship with respect to such premises before the expiration of the 30-day period which begins— (I) on the date notification was posted or personally delivered, or (II) if later, on the date on which such termination or nonrenewal takes effect; and (ii) may, if permitted to do so by the franchise agreement, repossess such premises and, in circumstances under which it would be reasonable to do so, operate such premises through employees or agents. (2) In the case of any termination of any franchise or any nonrenewal of any franchise relationship pursuant to the provisions of [section 2802(b)(2)(E) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section2802/b/2/E&num=0&edit

Source: Supplied U.S. Code snapshot — release unconfirmed · 15 U.S.C. § 2804

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Federal law — U.S. Code and appendices · legal_authorities

15 U.S.C. § 2803 — Trial and interim franchises

Page 1950 TITLE 15—COMMERCE AND TRADE § 2803 (1) if such termination or nonrenewal is based upon an event described in subsection (c)(5), the franchisor shall fairly apportion be- tween the franchisor and the franchisee com- pensation, if any, received by the franchisor based upon any loss of business opportunity or good will; and (2) if such termination or nonrenewal is based upon an event described in subsection (c)(7) and the leased marketing premises are subsequently rebuilt or replaced by the franchisor and operated under a franchise, the franchisor shall, within a reasonable period of time, grant to the franchisee a right of first refusal of the franchise under which such premises are to be operated. (Pub. L. 95–297, title I, § 102, June 19, 1978, 92 Stat. 324; Pub. L. 103–371, §§ 2, 3, Oct. 19, 1994, 108 Stat. 3484.) Editorial Notes AMENDMENTS 1994—Subsec. (b)(3)(A)(ii). Pub. L. 103–371, § 2, inserted ‘‘converting the leased marketing premises to oper- ation by employees or agents of the franchisor for the benefit of the franchisor or otherwise’’ after ‘‘purpose of’’. Subsec. (c)(4). Pub. L. 103–371, § 3, redesignated por- tion of introductory language of par. (4) as subpar. (A), redesignated former subpars. (A) and (B) as cls. (i) and (ii), respectively, of subpar. (A), and added subpars. (B) and (C). § 2803. Trial and interim franchises (a) Nonapplicability of statutory nonrenewal provisions The provisions of section 2802 of this title shall not apply to the nonrenewal of any fran- chise 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) th

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