SECTIONS 20025-20026 - California Statutes

BUSINESS AND PROFESSIONS CODE

SECTION 20025-20026

20025. No franchisor may fail to renew a franchise unless such
franchisor provides the franchisee at least 180 days prior written
notice of its intention not to renew; and
(a) During the 180 days prior to expiration of the franchise the
franchisor permits the franchisee to sell his business to a purchaser
meeting the franchisor's then current requirements for granting new
franchises, or if the franchisor is not granting a significant number
of new franchises, the then current requirements for granting
renewal franchises; or
(b) (1) The refusal to renew is not for the purpose of converting
the franchisee's business premises to operation by employees or
agents of the franchisor for such franchisor's own account, provided,
that nothing in this paragraph shall prohibit a franchisor from
exercising a right of first refusal to purchase the franchisee's
business; and
(2) 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; or
(c) Termination would be permitted pursuant to Section 20020 or
20021; or
(d) The franchisee and the franchisor agree not to renew the
franchise; or
(e) The franchisor withdraws from distributing its products or
services through franchises in the geographic market served by the
franchisee, provided that:
(1) 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; and
(2) The failure to renew is not for the purpose of converting the
business conducted by the franchisee pursuant to the franchise
agreement to operation by employees or agents of the franchisor for
such franchisor's own account; and
(3) Where the franchisor determines to sell, transfer, or assign
its interest in a marketing premises occupied by a franchisee whose
franchise agreement is not renewed pursuant to this paragraph:
(A) The franchisor, during the 180-day period after giving notice
offers such franchisee a right of first refusal of at least 30 days'
duration of a bona fide offer, made by another to purchase such
franchisor's interest in such premises; or
(B) In the case of the sale, transfer, or assignment to another
person of the franchisor's interest in one or more other controlled
marketing premises, such other person in good faith offers the
franchisee a franchise on substantially the same terms and conditions
currently being offered by such other person to other franchisees;
or
(f) The franchisor and the franchisee fail to agree to changes or
additions to the terms and conditions of the franchise agreement, if
such changes or additions would result in renewal of the franchise
agreement on substantially the same terms and conditions on which the
franchisor is then customarily granting renewal franchises, or if
the franchisor is not then granting a significant number of renewal
franchises, the terms and conditions on which the franchisor is then
customarily granting original franchises. The franchisor may give the
franchisee written notice of a date which is at least 30 days from
the date of such notice, on or before which a proposed written
agreement of the terms and conditions of the renewal franchise shall
be accepted in writing by the franchisee. Such notice, when given not
less than 180 days before the end of the franchise term, may state
that in the event of failure of such acceptance by the franchisee,
the notice shall be deemed a notice of intention not to renew at the
end of the franchise term.

20026. Nothing in Section 20025 shall prohibit a franchisor from
offering or agreeing before expiration of the current franchise term
to extend the term of the franchise for a limited period in order to
satisfy the time of notice of nonrenewal requirement of that section.