523H.8 - NONRENEWAL OF A FRANCHISE.
523H.8 NONRENEWAL OF A FRANCHISE. 1. A franchisor shall not refuse to renew a franchise unless both of the following apply: a. The franchisee has been notified of the franchisor's intent not to renew at least six months prior to the expiration date or any extension of the franchise agreement. b. Any of the following circumstances exist: (1) Good cause exists, provided that the refusal of the franchisor to renew is not arbitrary or capricious. For purposes of this section, "good cause" means cause based on a legitimate business reason. (2) The franchisor and franchisee agree not to renew the franchise. (3) The franchisor completely withdraws from directly or indirectly distributing its products or services in the geographic market served by the franchisee, provided that upon expiration of the franchise, the franchisor agrees not to seek to enforce any covenant of the nonrenewed franchisee not to compete with the franchisor or franchisees of the franchisor. 2. As a condition of renewal of the franchise, a franchise agreement may require that the franchisee meet the then current requirements for franchises and that the franchisee execute a new agreement incorporating the then current terms and fees for new franchises.
Section History: Recent Form 92 Acts, ch 1134, § 8; 95 Acts, ch 117, §5