Text: H01189 Text: H01191 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. Except as otherwise provided by this
1 5 section, a franchisor shall not terminate a franchise
1 6 prior to the expiration of its term except for good
1 7 cause. For purposes of this subsection, "good cause"
1 8 is cause based upon a legitimate business reason.
1 9 "Good cause" includes the failure of the franchisee to
1 10 comply with any material lawful requirement of the
1 11 franchise agreement, provided that the termination by
1 12 the franchisor is not arbitrary or capricious when
1 13 compared to the actions of the franchisor in other
1 14 similar circumstances. The burden of proof of showing
1 15 that action of the franchisor is arbitrary or
1 16 capricious shall rest with the franchisee.
1 17 b. Prior to termination of a franchise for good
1 18 cause, a franchisor shall provide a franchisee with
1 19 written notice stating the basis for the proposed
1 20 termination. After service of written notice, the
1 21 franchisee shall have a reasonable period of time to
1 22 cure the default, which in no event shall be less than
1 23 thirty days or more than ninety days. In the event of
1 24 nonpayment of moneys due under the franchise
1 25 agreement, the period to cure need not exceed thirty
1 26 days.
1 27 c. Notwithstanding paragraph "b", a franchisor may
1 28 terminate a franchisee upon written notice and without
1 29 an opportunity to cure if any of the following apply:
1 30 (1) The franchisee or the business to which the
1 31 franchise relates is declared bankrupt or judicially
1 32 determined to be insolvent.
1 33 (2) All or a substantial part of the assets of the
1 34 franchise or the business to which the franchisee
1 35 relates are assigned to or for the benefit of any
1 36 creditor which is subject to chapter 681. An
1 37 assignment for the benefit of any creditor pursuant to
1 38 this subparagraph does not include the granting of a
1 39 security interest in the normal course of business.
1 40 (3) The franchisee voluntarily abandons the
1 41 franchise by failing to operate the business for five
1 42 consecutive business days during which the franchisee
1 43 is required to operate the business under the terms of
1 44 the franchise, or any shorter period after which it is
1 45 not unreasonable under the facts and circumstances for
1 46 the franchisor to conclude that the franchisee does
1 47 not intend to continue to operate the franchise,
1 48 unless the failure to operate is due to circumstances
1 49 beyond the control of the franchisee.
1 50 (4) The franchisor and franchisee agree in writing
2 1 to terminate the franchise.
2 2 (5) The franchisee knowingly makes any material
2 3 misrepresentations or knowingly omits to state any
2 4 material facts relating to the acquisition or
2 5 ownership or operation of the franchise business.
2 6 (6) After three material breaches of a franchise
2 7 agreement occurring within a twelve-month period, for
2 8 which the franchisee has been given notice and an
2 9 opportunity to cure, the franchisor may terminate upon
2 10 any subsequent material breach within the twelve-month
2 11 period without providing an opportunity to cure,
2 12 provided that the action is not arbitrary and
2 13 capricious.
2 14 (7) The franchised business or business premises
2 15 of the franchisee are lawfully seized, taken over, or
2 16 foreclosed by a government authority or official.
2 17 (8) The franchisee is convicted of a felony or any
2 18 other criminal misconduct which materially and
2 19 adversely affects the operation, maintenance, or
2 20 goodwill of the franchise in the relevant market.
2 21 (9) The franchisee operates the franchised
2 22 business in a manner that imminently endangers the
2 23 public health and safety."
2 24
2 25
2 26
2 27 WEIGEL of Chickasaw
2 28 HF 334.503 77
2 29 mj/jw/28
Text: H01189 Text: H01191 Text: H01100 - H01199 Text: H Index Bills and Amendments: General Index Bill History: General Index
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