Text: H01516 Text: H01518 Text: H01500 - H01599 Text: H Index Bills and Amendments: General Index Bill History: General Index
PAG LIN
1 1 Amend Senate File 324, as amended, passed, and
1 2 reprinted by the Senate, as follows:
1 3 #1. Page 6, by inserting after line 12 the
1 4 following:
1 5 " . A franchisee may transfer the franchisee's
1 6 interest in the franchise, for the unexpired term of
1 7 the franchise agreement, and a franchisor shall not
1 8 require the franchisee or the transferee to enter into
1 9 a new or different franchise agreement as a condition
1 10 of the transfer."
1 11 #2. Page 6, by inserting after line 23 the
1 12 following:
1 13 " . A franchisor shall not transfer its interest
1 14 in a franchise unless the franchisor makes reasonable
1 15 provision for the performance of the franchisor's
1 16 obligations under the franchise agreement by the
1 17 transferee. For purposes of this section "reasonable
1 18 provision" means that upon the transfer, the entity
1 19 assuming the franchisor's obligation has the financial
1 20 means to perform the franchisor's obligations in the
1 21 ordinary course of business, but does not mean that
1 22 the franchisor transferring the franchise is required
1 23 to guarantee obligations of the underlying franchise
1 24 agreement."
1 25 #3. Page 6, by inserting after line 32 the
1 26 following:
1 27 " . A franchisor, as a condition to a transfer
1 28 of a franchise, shall not obligate a franchisee to
1 29 undertake obligations or relinquish any rights
1 30 unrelated to the franchise proposed to be transferred,
1 31 or to enter into a release of claims broader than a
1 32 similar release of claims by the franchisor against
1 33 the franchisee which is entered into by the
1 34 franchisor.
1 35 . A franchisor shall not discriminate against a
1 36 proposed transferee of a franchise on the basis of
1 37 race, color, national origin, religion, sex, or
1 38 disability.
1 39 . A franchisor, after a transfer of a
1 40 franchise, shall not seek to enforce any convenant of
1 41 the transferred franchise against the transferor which
1 42 prohibits the transferor from engaging in any lawful
1 43 occupation or enterprise. However, this subsection
1 44 does not prohibit the franchisor from enforcing a
1 45 contractual convenant against the transferor not to
1 46 exploit the franchisor's trade secrets or intellectual
1 47 property rights, unless otherwise agreed to by the
1 48 parties."
1 49 #4. Page 7, by striking lines 34 and 35 and
1 50 inserting the following: "franchisees. If less than
2 1 fifty".
2 2 #5. Page 8, by inserting after line 5 the
2 3 following:
2 4 "j. A franchisor shall not interfere or attempt to
2 5 interfere with any permissible disposition of an
2 6 interest in a franchise or franchised business."
2 7 #6. Page 8, line 31, by striking the word "six"
2 8 and inserting the following: "five".
2 9 #7. Page 9, by striking lines 4 through 6.
2 10 #8. Page 9, line 35, by striking the words "no
2 11 more".
2 12 #9. Page 10, line 1, by striking the words "than
2 13 three years of proven".
2 14 #10. Page 10, line 6, by striking the word "Six"
2 15 and inserting the following: "Five".
2 16 #11. Page 10, line 29, by inserting after the word
2 17 "capricious" the following: "when compared to the
2 18 actions of the franchisor in other similar
2 19 circumstances".
2 20 #12. By striking page 11, line 33, through page
2 21 12, line 2, and inserting the following:
2 22 "(6) After three material breaches of a franchise
2 23 agreement occurring within a twelve-month period, for
2 24 which the franchisee has been given notice and an
2 25 opportunity to cure, the franchisor may terminate upon
2 26 any subsequent material breach within the twelve-month
2 27 period without providing an opportunity to cure,
2 28 provided that the action is not arbitrary and
2 29 capricious."
2 30 #13. Page 13, line 2, by inserting after the word
2 31 "supplies," the following: "equipment, fixtures,".
2 32 #14. Page 13, line 5, by inserting after the word
2 33 "supplies," the following: "equipment, fixtures,".
2 34 #15. Page 13, line 9, by inserting after the word
2 35 "supplies," the following: "equipment, fixtures,".
2 36 #16. Page 13, line 10, by inserting after the word
2 37 "supplies," the following: "equipment, fixtures,".
2 38 #17. Page 13, line 16, by inserting after the word
2 39 "supplies," the following: "equipment, fixtures,".
2 40 #18. Page 13, line 17, by inserting after the word
2 41 "supplies," the following: "equipment, fixtures,".
2 42 #19. Page 13, by inserting after line 24 the
2 43 following:
2 44 "10A. LIMITED FIDUCIARY DUTY. Without regard to
2 45 whether a fiduciary duty is imposed generally on the
2 46 franchisor by virtue of a franchise agreement, the
2 47 franchisor owes a fiduciary duty to its franchisees
2 48 and is obligated to exercise the highest standards of
2 49 care for franchisee interests where the franchisor
2 50 does any of the following:
3 1 a. Undertakes to perform bookkeeping, collection,
3 2 payroll, or accounting services on behalf of the
3 3 franchisee.
3 4 b. Administers, controls, or supervises, either
3 5 directly or through any subsidiary or affiliate, any
3 6 advertising, marketing, or promotional fund or program
3 7 to which franchisees are required to, or routinely,
3 8 contribute."
3 9 #20. Page 13, by striking lines 25 through 32 and
3 10 inserting the following:
3 11 "11. DUTY OF GOOD FAITH. A franchise imposes on
3 12 the parties a duty of good faith in performance and
3 13 enforcement of the franchise agreement. "Good faith"
3 14 means honesty in fact and the observance of reasonable
3 15 commercial standards of fair dealing in the trade.
3 16 The duty of good faith is imposed in situations
3 17 including, but not limited to, where the franchisor
3 18 opens a new outlet, location, or channel of
3 19 distribution that has an adverse impact on an existing
3 20 franchisee."
3 21 #21. Page 13, by inserting before line 33 the
3 22 following:
3 23 " . REPURCHASE OF ASSETS. A franchisor shall
3 24 not terminate or refuse to renew a franchise without
3 25 fairly compensating the franchisee for the fair market
3 26 value, at the time of termination or expiration of the
3 27 franchise, of the franchisee's inventory, supplies,
3 28 equipment, and furnishings purchased from the
3 29 franchisor or approved supplier, and good will,
3 30 exclusive of personalized materials which have no
3 31 value to the franchisor, and inventory, supplies,
3 32 equipment, and furnishings not reasonably required in
3 33 the conduct of the franchise business. However,
3 34 compensation need not be made to a franchisee for good
3 35 will if the franchisee is given one year's notice of
3 36 nonrenewal and the franchisor agrees in writing not to
3 37 enforce any covenant which restrains the franchisee
3 38 from competing with the franchisor. A franchisor may
3 39 offset against amounts owed to a franchisee under this
3 40 subsection any amounts owed by such franchisee to the
3 41 franchisor."
3 42 #22. Page 14, by inserting after line 3 the
3 43 following:
3 44 "Punitive damages may also be awarded if an act or
3 45 omission of the franchisor, which constitutes the
3 46 violation of this section, occurs with malice or
3 47 reckless disregard for the statutory or contractual
3 48 rights of the franchisee."
3 49 #23. By renumbering as necessary.
3 50
4 1
4 2
4 3 WEIGEL of Chickasaw
4 4 SF 324.512 78
4 5 mj/jw
Text: H01516 Text: H01518 Text: H01500 - H01599 Text: H Index Bills and Amendments: General Index Bill History: General Index
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