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) the franchisee of which has not pre- viously 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 inten- tion not to renew the franchise relation- ship; and (iv) that the provisions of section 2802 of this title, limiting the right of a franchisor to fail to renew a franchise rela- tionship, are not applicable to such trial franchise. (2) The term ‘‘trial franchise’’ does not in- clude any unexpired period of any term of any franchise (other than a trial franchise, as de- fined by paragraph (1)) which was transferred or assigned by a franchisee to the extent au- thorized 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 be- tween the franchisor and the franchisee, does not exceed 3 years; (C) the effective date of which occurs im- mediately after the expiration of a prior franchise, applicable to the marketing prem- ises, which was not renewed if such non- renewal— (i) was based upon a determination de- scribed 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 fran- chise; (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 notifica- tion 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 conclu- sion of the initial term of such trial franchise; and (2) under any interim franchise, at the con- clusion of the term of such interim franchise, if— (A) such nonrenewal is based upon a deter- mination 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 sat- isfied. (Pub. L. 95–297, title I, § 103, June 19, 1978, 92 Stat. 328.) § 2804. Notification of termination or nonrenewal of franchise relationship (a) General requirements applicable to franchisor Prior to termination of any franchise or non- renewal of any franchise relationship, the