10 §1454. Franchised dealers and distributors - Maine Statutes

Title 10: COMMERCE AND TRADE

Part 3: REGULATION OF TRADE

Chapter 215: MOTOR FUEL DISTRIBUTION AND SALES

§1454. Franchised dealers and distributors

1. Franchise agreements. When a franchise agreement between a refiner and a retail dealer or a distributor or between a distributor and a retail dealer covers more than 35% of the retail dealer's gross sales and such gross sales are more than $30,000 annually, every such franchise agreement shall be subject to the nonwaivable provisions set forth in this subsection, whether or not they are expressly set forth in the agreement.

A. Each retail dealer and each distributor as franchisee shall have the right to cancel a franchise agreement until midnight of the 7th business day after the day on which the agreement was signed, by giving the franchisor written notice of the cancellation. Upon giving the franchisor such notice, all money, equipment and merchandise loaned, sold or delivered to the franchisee under the agreement shall be returned to the franchisor for full credit, or the cash equivalent. If the franchisor is the owner of the real estate upon which the franchisee conducted his business, the franchisee shall deliver full possession of the real estate to the franchisor. [1975, c. 549, (NEW).]

B. No agreement shall contain any provision which in any way limits the right of either party to trial by jury, the interposition of counterclaims or crossclaims. [1975, c. 549, (NEW).]

C. The price at which a franchisee sells products shall not be fixed or maintained by a franchisor, nor shall any person seek to do so, nor shall the price of products be subject to enforcement or coercion by any person in any manner. Nothing herein shall be construed to prohibit a franchisor from suggesting prices and counseling with franchisees concerning prices. Each agreement shall have, in ten-point type, the legend: "PRICE FIXING OR MANDATORY PRICES FOR ANY PRODUCTS COVERED IN THIS AGREEMENT IS PROHIBITED. A SERVICE STATION DEALER OR WHOLESALE DISTRIBUTOR MAY SELL ANY PRODUCTS LISTED IN THIS AGREEMENT FOR A PRICE WHICH HE ALONE MAY DECIDE." [1975, c. 549, (NEW).]

D. No franchisor shall withhold his consent to any assignment, transfer or sale of the franchise agreement, provided that the assignee, transferee or purchaser of the franchise agreement meets the qualifications required in the franchise agreement. [1975, c. 549, (NEW).]

E. If the franchise agreement requires the franchisee to provide a cash deposit in advance for the use of the service station or delivery of fuel, except as advance payment in whole or in part for product ordered, such deposit shall be held by the franchisor, may be used by the franchisor in his business, and shall be retained for the term of the agreement unless it is sooner terminated. Interest at a rate of at least 6% shall be paid to the franchisee at least annually. Within 90 days after the termination of the agreement, the deposit shall be returned, together with any unpaid interest on such deposit at the rate of at least 6% per year. [1975, c. 549, (NEW).]

F. No agreement shall provide for the use of any promotion, premium, coupon, give-away or rebate in the operation of the business, except that a dealer may participate in a promotion, premium, coupon, give-away or rebate sponsored by the franchisor, if the dealer so desires. [1975, c. 549, (NEW).]

[ 1975, c. 549, (NEW) .]

2. Termination of franchise agreements. No refiner or distributor, as franchisor, shall, directly or through any officer, agent or employee, terminate, cancel or fail to renew a franchise agreement, except for good cause. For purposes of this section, good cause shall include, but not be limited to:

A. With respect to franchise agreements wherein the franchisor leases real property and improvements to the franchisee,

(1) The sale or lease of such real property and improvements by the franchisor to other than a subsidiary or affiliate of the franchisor for any use;

(2) The sale or lease of such real property and improvements to a subsidiary or affiliate of the franchisor, for a purpose other than the wholesale distribution or the retail sale of motor fuels;

(3) The conversion of such real property and improvements to a use other than the wholesale distribution or the retail sale of motor fuels; or

(4) The lawful termination of lease, license or other nonownership under which the franchisor is entitled to possession or control of such real property and improvements; [1975, c. 549, (NEW).]

B. Mutual agreement to terminate; [1975, c. 549, (NEW).]

C. Criminal misconduct or violation of law relating to the business or premises of the dealer; [1975, c. 549, (NEW).]

D. Fraud, which shall include, but not be limited to the following:

(1) Adulteration of the franchisor's products;

(2) Commingling of funds;

(3) Misleading or misbranding of gasoline;

(4) Trademark violations;

(5) Intentionally overcharging or deceiving customers as to repairs which are not needed;

(6) Intentionally deceiving the franchisor regarding a term of the term of the lease; [1975, c. 549, (NEW).]

E. Failure of the dealer to open for business for 5 consecutive days, exclusive of holidays, and reasonable vacation and sick days. [1975, c. 549, (NEW).]

F. Bankruptcy or insolvency of the dealer. [1975, c. 549, (NEW).]

G. Nonpayment of rent, or loss by the franchisor of its legal right to grant possession of leased premises to the dealer, or [1975, c. 549, (NEW).]

H. Public condemnation or other public taking. [1975, c. 549, (NEW).]

I. Substantial noncompliance with the obligations of the franchise agreement. [1975, c. 623, §6-D (NEW).]

[ 1975, c. 623, §§6-C, 6-D (AMD) .]

3. Notice of termination. The franchisor shall give the franchisee advance written notice of termination, cancellation or intent not to renew. Notwithstanding any statute to the contrary, advance notice required by this subsection shall precede the effective date of such termination, cancellation or nonrenewal by at least:

A. 45 days where the asserted cause is substantial noncompliance with the obligations of the franchise agreement; [1975, c. 549, (NEW).]

B. 120 days where the asserted cause is among those specified in subsection 2, paragraph A; or [1975, c. 549, (NEW).]

C. 7 days where the asserted cause is among those specified in subsection 2, paragraphs C, D and E. [1975, c. 549, (NEW).]

[ 1975, c. 549, (NEW) .]

4. Compensation on termination of franchise. Upon the termination of any franchise, the franchisee shall be entitled to fair and reasonable compensation by the franchisor for the franchisee's inventory, supplies, equipment and furnishings purchased by the franchisee from the franchisor or its approved sources and costs and expenses paid to the franchisor under the terms of the franchise or any ancillary or collateral agreement; provided no compensation shall be allowed for personalized items which have no value to the franchisor.

[ 1975, c. 549, (NEW) .]

SECTION HISTORY

1975, c. 549, (NEW). 1975, c. 623, §§6-C,6-D (AMD).