March 8, 2012, Introduced by Rep. MacMaster and referred to the Committee on Regulatory Reform.
A bill to amend 1974 PA 269, entitled
"Franchise investment law,"
by amending section 27 (MCL 445.1527), as amended by 1984 PA 92.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 27. Each of the following provisions is void and
unenforceable
if it is contained in any documents document relating
to a franchise:
(a) A prohibition on the right of a franchisee to join an
association of franchisees.
(b) A requirement that a franchisee assent to a release,
assignment,
novation, waiver, or estoppel which that deprives a
franchisee
of rights and protections provided in this act. This
shall
However, this subdivision
does not preclude prevent a
franchisee, after entering into a franchise agreement, from
settling any and all claims.
(c) A provision that permits a franchisor to terminate a
franchise
prior to before the expiration of its term except for
good
cause. Good cause shall include includes
the failure of the
franchisee to comply with any lawful provision of the franchise
agreement
and to cure such that failure after being given the
franchisee
receives written notice thereof of it and
is given a
reasonable
opportunity , which in no event need be more than 30
days,
to cure such that failure. As used in this subdivision,
"reasonable opportunity to cure" does not require a time period of
more than 30 days to cure a failure to comply described in this
subdivision.
(d) A provision that permits a franchisor to refuse to renew a
franchise without fairly compensating the franchisee, by repurchase
or
other means, for the fair market value at the time of
expiration
of the franchisee's inventory, supplies, equipment, fixtures, and
furnishings, as determined at the time the franchise expires.
Personalized
However, personalized materials which that have
no
value to the franchisor and inventory, supplies, equipment,
fixtures, and furnishings that are not reasonably required in the
conduct
of the franchise business are not subject to compensation .
This
subsection under this
subdivision and this subdivision applies
only
if both of the following are met: (i)
(i) The term of the franchise
is less than 5 years. and (ii)
the
(ii) The franchisee is
prohibited by the franchise or agreement
or any other agreement from continuing to conduct substantially the
same business under another trademark, service mark, trade name,
logotype, advertising, or other commercial symbol in the same area
subsequent
to after the expiration of the franchise or the
franchisee
does not receive at least 6 months months'advance notice
of the franchisor's intent not to renew the franchise.
(e) A provision that permits the franchisor to refuse to renew
a franchise on terms generally available to other franchisees of
the
same class or type under similar circumstances. This section
However, this subdivision does not require a renewal provision in a
franchise.
(f)
A provision requiring that requires
the conduct of
arbitration
or litigation be conducted occur
outside this state.
This
shall subdivision does not preclude the a franchisee
from
entering into an agreement, at the time of arbitration, to conduct
arbitration at a location outside this state.
(g)
A provision which that permits a franchisor to refuse to
permit a transfer of ownership of a franchise, except for good
cause. This subdivision does not prevent a franchisor from
exercising
a right of first refusal to purchase the franchise. Good
As
used in this subdivision, "good cause"
shall include, includes,
but is not limited to, any of the following:
(i) The failure of the proposed transferee to meet the
franchisor's then current reasonable qualifications or standards.
(ii) The fact that That the
proposed transferee is a competitor
of the franchisor or subfranchisor.
(iii) The unwillingness of the proposed transferee to agree in
writing to comply with all of a franchisee's lawful obligations.
(iv) The failure of the franchisee or proposed transferee to
pay
any sums money owing to the franchisor or to cure any default
in
the franchise agreement existing that exists at the time of
the
proposed transfer.
(h) A provision that requires the franchisee to resell to the
franchisor items that are not uniquely identified with the
franchisor. This subdivision does not prohibit a provision that
grants to a franchisor a right of first refusal to purchase the
assets of a franchise on the same terms and conditions as a bona
fide third party willing and able to purchase those assets, nor
does this subdivision prohibit a provision that grants the
franchisor the right to acquire the assets of a franchise for the
market
or appraised value of such those
assets if the franchisee
has breached the lawful provisions of the franchise agreement and
has failed to cure the breach in the manner provided in subdivision
(c).
(i)
A provision which that permits the franchisor to directly
or indirectly convey, assign, or otherwise transfer its obligations
to fulfill contractual obligations to the franchisee unless
provision
has been is made for providing the required contractual
services.
(j) A provision that permits a franchisor to refuse to allow a
franchisee to obtain equipment, fixtures, supplies, or services
used in the establishment and operation of the franchise business
from sources of the franchisee's choosing, if that equipment or
those fixtures, supplies, or services meet standards concerning the
nature and quality of equipment, fixtures, supplies, or services
established by the franchisor. This subdivision does not apply to a
provision that requires that the franchisee obtain reasonable
quantities of inventory goods or services, including display and
sample items, from the franchisor or an affiliate of the
franchisor, but only if those goods or services are central to the
franchise business, and the goods or services are actually
manufactured or produced by the franchisor or affiliate or
incorporate a trade secret of the franchisor or affiliate.