Text: H01188 Text: H01190 Text: H01100 - H01199 Text: H Index Bills and Amendments: General Index Bill History: General Index
PAG LIN
1 1 Amend House File 334 as follows:
1 2 #1. Page 3, by inserting after line 14 the
1 3 following:
1 4 "6. a. A franchisee may transfer the franchised
1 5 business and franchise to a transferee, provided that
1 6 the transferee satisfies the reasonable current
1 7 qualifications of the franchisor for new franchisees.
1 8 For the purposes of this subsection, a reasonable
1 9 current qualification for a new franchisee is a
1 10 qualification based upon a legitimate business reason.
1 11 If the proposed transferee does not meet the
1 12 reasonable current qualifications of the franchisor,
1 13 the franchisor may refuse to permit the transfer,
1 14 provided that the refusal of the franchisor to consent
1 15 to the transfer is not arbitrary or capricious.
1 16 b. Except as otherwise provided in this
1 17 subsection, a franchisor may exercise a right of first
1 18 refusal contained in a franchise agreement after
1 19 receipt of a proposal from the franchisee to transfer
1 20 the franchise.
1 21 c. A franchisor may require as a condition of a
1 22 transfer any of the following:
1 23 (1) That the transferee successfully complete a
1 24 reasonable training program.
1 25 (2) That a reasonable transfer fee be paid to
1 26 reimburse the franchisor for the franchisor's
1 27 reasonable and actual expenses directly attributable
1 28 to the transfer.
1 29 (3) That the franchisee pay or make provision
1 30 reasonably acceptable to the franchisor to pay any
1 31 amount due the franchisor or the franchisor's
1 32 affiliate.
1 33 (4) That the financial terms of the transfer
1 34 comply at the time of the transfer with the
1 35 franchisor's current financial requirements for
1 36 franchisees.
1 37 d. A franchisee may transfer the franchisee's
1 38 interest in the franchise, for the unexpired term of
1 39 the franchise agreement, and a franchisor shall not
1 40 require the franchisee or the transferee to enter into
1 41 a new or different franchise agreement as a condition
1 42 of the transfer.
1 43 e. A franchisee shall give the franchisor no less
1 44 than sixty days' written notice of a transfer which is
1 45 subject to the provisions of this subsection, and on
1 46 request from the franchisor shall provide in writing
1 47 the ownership interests of all persons holding or
1 48 claiming an equitable or beneficial interest in the
1 49 franchise subsequent to the transfer or the
1 50 franchisee, as appropriate. A franchisee shall not
2 1 circumvent the intended effect of a contractual
2 2 provision governing the transfer of the franchise or
2 3 an interest in the franchise by means of a management
2 4 agreement, lease, profit-sharing agreement,
2 5 conditional assignment, or other similar device.
2 6 f. A franchisor shall not transfer its interest in
2 7 a franchise unless the franchisor makes reasonable
2 8 provision for the performance of the franchisor's
2 9 obligations under the franchise agreement by the
2 10 transferee. For purposes of this paragraph,
2 11 "reasonable provision" means that upon the transfer,
2 12 the entity assuming the franchisor's obligations has
2 13 the financial means to perform the franchisor's
2 14 obligations in the ordinary course of business, but
2 15 does not mean that the franchisor transferring the
2 16 franchise is required to guarantee obligations of the
2 17 underlying franchise agreement.
2 18 g. A transfer by a franchisee is deemed to be
2 19 approved sixty days after the franchisee submits the
2 20 request for consent to the transfer unless the
2 21 franchisor withholds consent to the transfer as
2 22 evidenced in writing, specifying the reason or reasons
2 23 for withholding the consent. The written notice must
2 24 be delivered to the franchisee prior to the expiration
2 25 of the sixty-day period. Any such notice is
2 26 privileged and is not actionable based upon a claim of
2 27 defamation.
2 28 h. A franchisor shall not discriminate against a
2 29 proposed transferee of a franchise on the basis of
2 30 race, color, national origin, religion, sex, or
2 31 disability.
2 32 i. A franchisor, as a condition to a transfer of a
2 33 franchise, shall not obligate a franchisee to
2 34 undertake obligations or relinquish any rights
2 35 unrelated to the franchise proposed to be transferred,
2 36 or to enter into a release of claims broader than a
2 37 similar release of claims by the franchisor against
2 38 the franchisee which is entered into by the
2 39 franchisor.
2 40 j. A franchisor, after a transfer of a franchise,
2 41 shall not seek to enforce any covenant of the
2 42 transferred franchise against the transferor which
2 43 prohibits the transferor from engaging in any lawful
2 44 occupation or enterprise. However, this paragraph
2 45 does not prohibit the franchisor from enforcing a
2 46 contractual covenant against the transferor not to
2 47 exploit the franchisor's trade secrets or intellectual
2 48 property rights, unless otherwise agreed to by the
2 49 parties.
2 50 k. For purposes of this subsection, "transfer"
3 1 means any change in ownership or control of a
3 2 franchise, franchised business, or a franchisee.
3 3 l. The following occurrences shall not be
3 4 considered transfers requiring the consent of the
3 5 franchisor under a franchise agreement, and shall not
3 6 result in the imposition of any penalties or make
3 7 applicable any right of first refusal by the
3 8 franchisor:
3 9 (1) The succession of ownership of a franchise
3 10 upon the death or disability of a franchisee, or of an
3 11 owner of a franchise, to the surviving spouse, heir,
3 12 or a partner active in the management of the
3 13 franchisee unless the successor fails to meet within
3 14 one year the then current reasonable qualifications of
3 15 the franchisor for franchisees and the enforcement of
3 16 the reasonable current qualifications is not arbitrary
3 17 or capricious.
3 18 (2) Incorporation of a proprietorship franchisee,
3 19 provided that such incorporation does not prohibit a
3 20 franchisor from requiring a personal guaranty by the
3 21 franchisee of obligations related to the franchise.
3 22 (3) A transfer within an existing ownership group
3 23 of a franchise provided that more than fifty percent
3 24 of the franchise is held by persons who meet the
3 25 franchisor's reasonable current qualifications for
3 26 franchisees. If less than fifty percent of the
3 27 franchise would be owned by persons who meet the
3 28 franchisor's reasonable current qualifications, the
3 29 franchisor may refuse to authorize the transfer,
3 30 provided that enforcement of the reasonable current
3 31 qualifications is not arbitrary or capricious.
3 32 (4) A transfer of less than a controlling interest
3 33 in the franchise to the franchisee's spouse or child
3 34 or children, provided that more than fifty percent of
3 35 the entire franchise is held by those who meet the
3 36 franchisor's reasonable current qualifications. If
3 37 less than fifty percent of the franchise would be
3 38 owned by persons who meet the franchisor's reasonable
3 39 current qualifications, the franchisor may refuse to
3 40 authorize the transfer, provided that enforcement of
3 41 the reasonable current qualifications is not arbitrary
3 42 or capricious.
3 43 (5) A transfer of less than a controlling interest
3 44 in the franchise of an employee stock ownership plan,
3 45 or employee incentive plan, provided that more than
3 46 fifty percent of the entire franchise is held by those
3 47 who meet the franchisor's reasonable current
3 48 qualifications for franchisees. If less than fifty
3 49 percent would be owned by persons who meet the
3 50 franchisor's reasonable current qualifications, the
4 1 franchisor may refuse to authorize the transfer,
4 2 provided that enforcement of the reasonable current
4 3 qualifications is not arbitrary or capricious.
4 4 (6) A grant or retention of a security interest in
4 5 the franchised business or its assets, or an ownership
4 6 interest in the franchisee, provided the security
4 7 agreement establishes an obligation on the part of the
4 8 secured party enforceable by the franchisor to give
4 9 the franchisor notice of the secured party's intent to
4 10 foreclose on the collateral simultaneously with notice
4 11 to the franchisee, and a reasonable opportunity to
4 12 redeem the interests of the secured party and recover
4 13 the secured party's interest in the franchise or
4 14 franchised business by paying the secured obligation.
4 15 m. A franchisor shall not interfere or attempt to
4 16 interfere with any disposition of an interest in a
4 17 franchise or franchised business as described in
4 18 paragraph "l", subparagraphs (1) through (6)."
4 19
4 20
4 21
4 22 WEIGEL of Chickasaw
4 23
4 24
4 25
4 26 GARMAN of Story
4 27 HF 334.502 77
4 28 mj/jw/28
Text: H01188 Text: H01190 Text: H01100 - H01199 Text: H Index Bills and Amendments: General Index Bill History: General Index
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