1. U.S. Code
  2. title 15
  3. chapter 55
  4. subchapter I
  5. § 2804

Collapse to view only § 2804. Notification of termination or nonrenewal of franchise relationship

§ 2801. DefinitionsAs used in this subchapter:
(1)
(A) The term “franchise” means any contract—
(i) between a refiner and a distributor,
(ii) between a refiner and a retailer,
(iii) between a distributor and another distributor, or
(iv) between a distributor and a retailer,
under which a refiner or distributor (as the case may be) authorizes or permits a retailer or distributor to use, in connection with the sale, consignment, or distribution of motor fuel, a trademark which is owned or controlled by such refiner or by a refiner which supplies motor fuel to the distributor which authorizes or permits such use.
(B) The term “franchise” includes—
(i) any contract under which a retailer or distributor (as the case may be) is authorized or permitted to occupy leased marketing premises, which premises are to be employed in connection with the sale, consignment, or distribution of motor fuel under a trademark which is owned or controlled by such refiner or by a refiner which supplies motor fuel to the distributor which authorizes or permits such occupancy;
(ii) any contract pertaining to the supply of motor fuel which is to be sold, consigned or distributed—(I) under a trademark owned or controlled by a refiner; or(II) under a contract which has existed continuously since May 15, 1973, and pursuant to which, on May 15, 1973, motor fuel was sold, consigned or distributed under a trademark owned or controlled on such date by a refiner; and
(iii) the unexpired portion of any franchise, as defined by the preceding provisions of this paragraph, which is transferred or assigned as authorized by the provisions of such franchise or by any applicable provision of State law which permits such transfer or assignment without regard to any provision of the franchise.
(2) The term “franchise relationship” means the respective motor fuel marketing or distribution obligations and responsibilities of a franchisor and a franchisee which result from the marketing of motor fuel under a franchise.
(3) The term “franchisor” means a refiner or distributor (as the case may be) who authorizes or permits, under a franchise, a retailer or distributor to use a trademark in connection with the sale, consignment, or distribution of motor fuel.
(4) The term “franchisee” means a retailer or distributor (as the case may be) who is authorized or permitted, under a franchise, to use a trademark in connection with the sale, consignment, or distribution of motor fuel.
(5) The term “refiner” means any person engaged in the refining of crude oil to produce motor fuel, and includes any affiliate of such person.
(6) The term “distributor” means any person, including any affiliate of such person, who—
(A) purchases motor fuel for sale, consignment, or distribution to another; or
(B) receives motor fuel on consignment for consignment or distribution to his own motor fuel accounts or to accounts of his supplier, but shall not include a person who is an employee of, or merely serves as a common carrier providing transportation service for, such supplier.
(7) The term “retailer” means any person who purchases motor fuel for sale to the general public for ultimate consumption.
(8) The term “marketing premises” means, in the case of any franchise, premises which, under such franchise, are to be employed by the franchisee in connection with sale, consignment, or distribution of motor fuel.
(9) The term “leased marketing premises” means marketing premises owned, leased, or in any way controlled by a franchisor and which the franchisee is authorized or permitted, under the franchise, to employ in connection with the sale, consignment, or distribution of motor fuel.
(10) The term “contract” means any oral or written agreement. For supply purposes, delivery levels during the same month of the previous year shall be prima facie evidence of an agreement to deliver such levels.
(11) The term “trademark” means any trademark, trade name, service mark, or other identifying symbol or name.
(12) The term “motor fuel” means gasoline and diesel fuel of a type distributed for use as a fuel in self-propelled vehicles designed primarily for use on public streets, roads, and highways.
(13) The term “failure” does not include—
(A) any failure which is only technical or unimportant to the franchise relationship;
(B) any failure for a cause beyond the reasonable control of the franchisee; or
(C) any failure based on a provision of the franchise which is illegal or unenforceable under the law of any State (or subdivision thereof).
(14) The terms “fail to renew” and “nonrenewal” mean, with respect to any franchise relationship, a failure to reinstate, continue, or extend the franchise relationship—
(A) at the conclusion of the term, or on the expiration date, stated in the relevant franchise;
(B) at any time, in the case of the relevant franchise which does not state a term of duration or an expiration date; or
(C) following a termination (on or after June 19, 1978) of the relevant franchise which was entered into prior to June 19, 1978, and has not been renewed after such date.
(15) The term “affiliate” means any person who (other than by means of a franchise) controls, is controlled by, or is under common control with, any other person.
(16) The term “relevant geographic market area” includes a State or a standard metropolitan statistical area as periodically established by the Office of Management and Budget.
(17) The term “termination” includes cancellation.
(18) The term “commerce” means any trade, traffic, transportation, exchange, or other commerce—
(A) between any State and any place outside of such State; or
(B) which affects any trade, transportation, exchange, or other commerce described in subparagraph (A).
(19) The term “State” means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, American Samoa, Guam, and any other commonwealth, territory, or possession of the United States.
(Pub. L. 95–297, title I, § 101, June 19, 1978, 92 Stat. 322; Pub. L. 103–371, § 6, Oct. 19, 1994, 108 Stat. 3486; Pub. L. 110–140, title II, § 241(c)(1), Dec. 19, 2007, 121 Stat. 1540.)

CITE AS: 15 USC 2801

§ 2802. Franchise relationship
(a) General prohibition against termination or nonrenewalExcept as provided in subsection (b) and section 2803 of this title, no franchisor engaged in the sale, consignment, or distribution of motor fuel in commerce may—
(1) terminate any franchise (entered into or renewed on or after June 19, 1978) prior to the conclusion of the term, or the expiration date, stated in the franchise; or
(2) fail to renew any franchise relationship (without regard to the date on which the relevant franchise was entered into or renewed).
(b) Precondition and grounds for termination or nonrenewal
(1) Any franchisor may terminate any franchise (entered into or renewed on or after June 19, 1978) or may fail to renew any franchise relationship, if—
(A) the notification requirements of section 2804 of this title are met; and
(B) such termination is based upon a ground described in paragraph (2) or such nonrenewal is based upon a ground described in paragraph (2) or (3).
(2) For purposes of this subsection, the following are grounds for termination of a franchise or nonrenewal of a franchise relationship:
(A) A failure by the franchisee to comply with any provision of the franchise, which provision is both reasonable and of material significance to the franchise relationship, if the franchisor first acquired actual or constructive knowledge of such failure—
(i) not more than 120 days prior to the date on which notification of termination or nonrenewal is given, if notification is given pursuant to section 2804(a) of this title; or
(ii) not more than 60 days prior to the date on which notification of termination or nonrenewal is given, if less than 90 days notification is given pursuant to section 2804(b)(1) of this title.
(B) A failure by the franchisee to exert good faith efforts to carry out the provisions of the franchise, if—
(i) the franchisee was apprised by the franchisor in writing of such failure and was afforded a reasonable opportunity to exert good faith efforts to carry out such provisions; and
(ii) such failure thereafter continued within the period which began not more than 180 days before the date notification of termination or nonrenewal was given pursuant to section 2804 of this title.
(C) The occurrence of an event which is relevant to the franchise relationship and as a result of which termination of the franchise or nonrenewal of the franchise relationship is reasonable, if such event occurs during the period the franchise is in effect and the franchisor first acquired actual or constructive knowledge of such occurrence—
(i) not more than 120 days prior to the date on which notification of termination or nonrenewal is given, if notification is given pursuant to section 2804(a) of this title; or
(ii) not more than 60 days prior to the date on which notification of termination or nonrenewal is given, if less than 90 days notification is given pursuant to section 2804(b)(1) of this title.
(D) An agreement, in writing, between the franchisor and the franchisee to terminate the franchise or not to renew the franchise relationship, if—
(i) such agreement is entered into not more than 180 days prior to the date of such termination or, in the case of nonrenewal, not more than 180 days prior to the conclusion of the term, or the expiration date, stated in the franchise;
(ii) the franchisee is promptly provided with a copy of such agreement, together with the summary statement described in section 2804(d) of this title; and
(iii) within 7 days after the date on which the franchisee is provided a copy of such agreement, the franchisee has not posted by certified mail a written notice to the franchisor repudiating such agreement.
(E) In the case of any franchise entered into prior to June 19, 1978, and in the case of any franchise entered into or renewed on or after such date (the term of which is 3 years or longer, or with respect to which the franchisee was offered a term of 3 years or longer), a determination made by the franchisor in good faith and in the normal course of business to withdraw from the marketing of motor fuel through retail outlets in the relevant geographic market area in which the marketing premises are located, if—
(i) such determination—(I) was made after the date such franchise was entered into or renewed, and(II) was based upon the occurrence of changes in relevant facts and circumstances after such date;
(ii) the termination or nonrenewal is not for the purpose of converting the premises, which are the subject of the franchise, to operation by employees or agents of the franchisor for such franchisor’s own account; and
(iii) in the case of leased marketing premises—(I) the franchisor, during the 180-day period after notification was given pursuant to section 2804 of this title, either made a bona fide offer to sell, transfer, or assign to the franchisee such franchisor’s interests in such premises, or, if applicable, offered the franchisee a right of first refusal of at least 45 days duration of an offer, made by another, to purchase such franchisor’s interest in such premises; or(II) in the case of the sale, transfer, or assignment to another person of the franchisor’s interest in such premises in connection with the sale, transfer, or assignment to such other person of the franchisor’s interest in one or more other marketing premises, if such other person offers, in good faith, a franchise to the franchisee on terms and conditions which are not discriminatory to the franchisee as compared to franchises then currently being offered by such other person or franchises then in effect and with respect to which such other person is the franchisor.
(3) For purposes of this subsection, the following are grounds for nonrenewal of a franchise relationship:
(A) The failure of the franchisor and the franchisee to agree to changes or additions to the provisions of the franchise, if—
(i) such changes or additions are the result of determinations made by the franchisor in good faith and in the normal course of business; and
(ii) such failure is not the result of the franchisor’s insistence upon such changes or additions for the purpose of converting the leased marketing premises to operation by employees or agents of the franchisor for the benefit of the franchisor or otherwise preventing the renewal of the franchise relationship.
(B) The receipt of numerous bona fide customer complaints by the franchisor concerning the franchisee’s operation of the marketing premises, if—
(i) the franchisee was promptly apprised of the existence and nature of such complaints following receipt of such complaints by the franchisor; and
(ii) if such complaints related to the condition of such premises or to the conduct of any employee of such franchisee, the franchisee did not promptly take action to cure or correct the basis of such complaints.
(C) A failure by the franchisee to operate the marketing premises in a clean, safe, and healthful manner, if the franchisee failed to do so on two or more previous occasions and the franchisor notified the franchisee of such failures.
(D) In the case of any franchise entered into prior to June 19, 1978, (the unexpired term of which, on such date, is 3 years or longer) and, in the case of any franchise entered into or renewed on or after such date (the term of which was 3 years or longer, or with respect to which the franchisee was offered a term of 3 years or longer), a determination made by the franchisor in good faith and in the normal course of business, if—
(i) such determination is—(I) to convert the leased marketing premises to a use other than the sale or distribution of motor fuel,(II) to materially alter, add to, or replace such premises,(III) to sell such premises, or(IV) that renewal of the franchise relationship is likely to be uneconomical to the franchisor despite any reasonable changes or reasonable additions to the provisions of the franchise which may be acceptable to the franchisee;
(ii) with respect to a determination referred to in subclause (II) or (IV), such determination is not made for the purpose of converting the leased marketing premises to operation by employees or agents of the franchisor for such franchisor’s own account; and
(iii) in the case of leased marketing premises such franchisor, during the 90-day period after notification was given pursuant to section 2804 of this title, either—(I) made a bona fide offer to sell, transfer, or assign to the franchisee such franchisor’s interests in such premises; or(II) if applicable, offered the franchisee a right of first refusal of at least 45-days duration of an offer, made by another, to purchase such franchisor’s interest in such premises.
(c) DefinitionAs used in subsection (b)(2)(C), the term “an event which is relevant to the franchise relationship and as a result of which termination of the franchise or nonrenewal of the franchise relationship is reasonable” includes events such as—
(1) fraud or criminal misconduct by the franchisee relevant to the operation of the marketing premises;
(2) declaration of bankruptcy or judicial determination of insolvency of the franchisee;
(3) continuing severe physical or mental disability of the franchisee of at least 3 months duration which renders the franchisee unable to provide for the continued proper operation of the marketing premises;
(4) loss of the franchisor’s right to grant possession of the leased marketing premises through expiration of an underlying lease, if—
(A) the franchisee was notified in writing, prior to the commencement of the term of the then existing franchise—
(i) of the duration of the underlying lease; and
(ii) of the fact that such underlying lease might expire and not be renewed during the term of such franchise (in the case of termination) or at the end of such term (in the case of nonrenewal);
(B) during the 90-day period after notification was given pursuant to section 2804 of this title, the franchisor offers to assign to the franchisee any option to extend the underlying lease or option to purchase the marketing premises that is held by the franchisor, except that the franchisor may condition the assignment upon receipt by the franchisor of—
(i) an unconditional release executed by both the landowner and the franchisee releasing the franchisor from any and all liability accruing after the date of the assignment for—(I) financial obligations under the option (or the resulting extended lease or purchase agreement);(II) environmental contamination to (or originating from) the marketing premises; or(III) the operation or condition of the marketing premises; and
(ii) an instrument executed by both the landowner and the franchisee that ensures the franchisor and the contractors of the franchisor reasonable access to the marketing premises for the purpose of testing for and remediating any environmental contamination that may be present at the premises; and
(C) in a situation in which the franchisee acquires possession of the leased marketing premises effective immediately after the loss of the right of the franchisor to grant possession (through an assignment pursuant to subparagraph (B) or by obtaining a new lease or purchasing the marketing premises from the landowner), the franchisor (if requested in writing by the franchisee not later than 30 days after notification was given pursuant to section 2804 of this title), during the 90-day period after notification was given pursuant to section 2804 of this title—
(i) made a bona fide offer to sell, transfer, or assign to the franchisee the interest of the franchisor in any improvements or equipment located on the premises; or
(ii) if applicable, offered the franchisee a right of first refusal (for at least 45 days) of an offer, made by another person, to purchase the interest of the franchisor in the improvements and equipment.
(5) condemnation or other taking, in whole or in part, of the marketing premises pursuant to the power of eminent domain;
(6) loss of the franchisor’s right to grant the right to use the trademark which is the subject of the franchise, unless such loss was due to trademark abuse, violation of Federal or State law, or other fault or negligence of the franchisor, which such abuse, violation, or other fault or negligence is related to action taken in bad faith by the franchisor;
(7) destruction (other than by the franchisor) of all or a substantial part of the marketing premises;
(8) failure by the franchisee to pay to the franchisor in a timely manner when due all sums to which the franchisor is legally entitled;
(9) failure by the franchisee to operate the marketing premises for—
(A) 7 consecutive days, or
(B) such lesser period which under the facts and circumstances constitutes an unreasonable period of time;
(10) willful adulteration, mislabeling or misbranding of motor fuels or other trademark violations by the franchisee;
(11) knowing failure of the franchisee to comply with Federal, State, or local laws or regulations relevant to the operation of the marketing premises; and
(12) conviction of the franchisee of any felony involving moral turpitude.
(d) Compensation, etc., for franchisee upon condemnation or destruction of marketing premisesIn the case of any termination of a franchise (entered into or renewed on or after June 19, 1978), or in the case of any nonrenewal of a franchise relationship (without regard to the date on which such franchise relationship was entered into or renewed)—
(1) if such termination or nonrenewal is based upon an event described in subsection (c)(5), the franchisor shall fairly apportion between the franchisor and the franchisee compensation, if any, received by the franchisor based upon any loss of business opportunity or good will; and
(2) if such termination or nonrenewal is based upon an event described in subsection (c)(7) and the leased marketing premises are subsequently rebuilt or replaced by the franchisor and operated under a franchise, the franchisor shall, within a reasonable period of time, grant to the franchisee a right of first refusal of the franchise under which such premises are to be operated.
(Pub. L. 95–297, title I, § 102, June 19, 1978, 92 Stat. 324; Pub. L. 103–371, §§ 2, 3, Oct. 19, 1994, 108 Stat. 3484.)

CITE AS: 15 USC 2802

§ 2803. Trial and interim franchises
(a) Nonapplicability of statutory nonrenewal provisionsThe provisions of section 2802 of this title shall not apply to the nonrenewal of any franchise relationship—
(1) under a trial franchise; or
(2) under an interim franchise.
(b) DefinitionsFor purposes of this section—
(1) The term “trial franchise” means any franchise—
(A) which is entered into on or after June 19, 1978;
(B) the franchisee of which has not previously been a party to a franchise with the franchisor;
(C) the initial term of which is for a period of not more than 1 year; and
(D) which is in writing and states clearly and conspicuously—
(i) that the franchise is a trial franchise;
(ii) the duration of the initial term of the franchise;
(iii) that the franchisor may fail to renew the franchise relationship at the conclusion of the initial term stated in the franchise by notifying the franchisee, in accordance with the provisions of section 2804 of this title, of the franchisor’s intention not to renew the franchise relationship; and
(iv) that the provisions of section 2802 of this title, limiting the right of a franchisor to fail to renew a franchise relationship, are not applicable to such trial franchise.
(2) The term “trial franchise” does not include any unexpired period of any term of any franchise (other than a trial franchise, as defined by paragraph (1)) which was transferred or assigned by a franchisee to the extent authorized by the provisions of the franchise or any applicable provision of State law which permits such transfer or assignment, without regard to any provision of the franchise.
(3) The term “interim franchise” means any franchise—
(A) which is entered into on or after June 19, 1978;
(B) the term of which, when combined with the terms of all prior interim franchises between the franchisor and the franchisee, does not exceed 3 years;
(C) the effective date of which occurs immediately after the expiration of a prior franchise, applicable to the marketing premises, which was not renewed if such nonrenewal—
(i) was based upon a determination described in section 2802(b)(2)(E) of this title, and
(ii) the requirements of section 2802(b)(2)(E) of this title were satisfied; and
(D) which is in writing and states clearly and conspicuously—
(i) that the franchise is an interim franchise;
(ii) the duration of the franchise; and
(iii) that the franchisor may fail to renew the franchise at the conclusion of the term stated in the franchise based upon a determination made by the franchisor in good faith and in the normal course of business to withdraw from the marketing of motor fuel through retail outlets in the relevant geographic market area in which the marketing premises are located if the requirements of section 2802(b)(2)(E)(ii) and (iii) of this title are satisfied.
(c) Nonrenewal upon meeting statutory notification requirementsIf the notification requirements of section 2804 of this title are met, any franchisor may fail to renew any franchise relationship—
(1) under any trial franchise, at the conclusion of the initial term of such trial franchise; and
(2) under any interim franchise, at the conclusion of the term of such interim franchise, if—
(A) such nonrenewal is based upon a determination described in section 2802(b)(2)(E) of this title; and
(B) the requirements of section 2802(b)(2)(E)(ii) and (iii) of this title are satisfied.
(Pub. L. 95–297, title I, § 103, June 19, 1978, 92 Stat. 328.)

CITE AS: 15 USC 2803

§ 2804. Notification of termination or nonrenewal of franchise relationship
(a) General requirements applicable to franchisorPrior to termination of any franchise or nonrenewal of any franchise relationship, the franchisor shall furnish notification of such termination or such nonrenewal to the franchisee who is a party to such franchise or such franchise relationship—
(1) in the manner described in subsection (c); and
(2) except as provided in subsection (b), not less than 90 days prior to the date on which such termination or nonrenewal takes effect.
(b) Additional requirements applicable to franchisor
(1) In circumstances in which it would not be reasonable for the franchisor to furnish notification, not less than 90 days prior to the date on which termination or nonrenewal takes effect, as required by subsection (a)(2)—
(A) such franchisor shall furnish notification to the franchisee affected thereby on the earliest date on which furnishing of such notification is reasonably practicable; and
(B) in the case of leased marketing premises, such franchisor—
(i) may not establish a new franchise relationship with respect to such premises before the expiration of the 30-day period which begins—(I) on the date notification was posted or personally delivered, or(II) if later, on the date on which such termination or nonrenewal takes effect; and
(ii) may, if permitted to do so by the franchise agreement, repossess such premises and, in circumstances under which it would be reasonable to do so, operate such premises through employees or agents.
(2) In the case of any termination of any franchise or any nonrenewal of any franchise relationship pursuant to the provisions of section 2802(b)(2)(E) of this title or section 2803(c)(2) of this title, the franchisor shall—
(A) furnish notification to the franchisee not less than 180 days prior to the date on which such termination or nonrenewal takes effect; and
(B) promptly provide a copy of such notification, together with a plan describing the schedule and conditions under which the franchisor will withdraw from the marketing of motor fuel through retail outlets in the relevant geographic area, to the Governor of each State which contains a portion of such area.
(c) Manner and form of notificationNotification under this section—
(1) shall be in writing;
(2) shall be posted by certified mail or personally delivered to the franchisee; and
(3) shall contain—
(A) a statement of intention to terminate the franchise or not to renew the franchise relationship, together with the reasons therefor;
(B) the date on which such termination or nonrenewal takes effect; and
(C) the summary statement prepared under subsection (d).
(d) Preparation, publication, etc., of statutory summaries
(1) Not later than 30 days after June 19, 1978, the Secretary of Energy shall prepare and publish in the Federal Register a simple and concise summary of the provisions of this subchapter, including a statement of the respective responsibilities of, and the remedies and relief available to, any franchisor and franchisee under this subchapter.
(2) In the case of summaries required to be furnished under the provisions of section 2802(b)(2)(D) of this title or subsection (c)(3)(C) of this section before the date of publication of such summary in the Federal Register, such summary may be furnished not later than 5 days after it is so published rather than at the time required under such provisions.
(Pub. L. 95–297, title I, § 104, June 19, 1978, 92 Stat. 329.)

CITE AS: 15 USC 2804

§ 2805. Enforcement provisions
(a) Maintenance of civil action by franchisee against franchisor; jurisdiction and venue; time for commencement of actionIf a franchisor fails to comply with the requirements of section 2802, 2803, or 2807 of this title, the franchisee may maintain a civil action against such franchisor. Such action may be brought, without regard to the amount in controversy, in the district court of the United States in any judicial district in which the principal place of business of such franchisor is located or in which such franchisee is doing business, except that no such action may be maintained unless commenced within 1 year after the later of—
(1) the date of termination of the franchise or nonrenewal of the franchise relationship; or
(2) the date the franchisor fails to comply with the requirements of section 2802, 2803, or 2807 of this title.
(b) Equitable relief by court; bond requirements; grounds for nonexercise of court’s equitable powers
(1) In any action under subsection (a), the court shall grant such equitable relief as the court determines is necessary to remedy the effects of any failure to comply with the requirements of section 2802, 2803, or 2807 of this title, including declaratory judgment, mandatory or prohibitive injunctive relief, and interim equitable relief.
(2) Except as provided in paragraph (3), in any action under subsection (a), the court shall grant a preliminary injunction if—
(A) the franchisee shows—
(i) the franchise of which he is a party has been terminated or the franchise relationship of which he is a party has not been renewed, and
(ii) there exist sufficiently serious questions going to the merits to make such questions a fair ground for litigation; and
(B) the court determines that, on balance, the hardships imposed upon the franchisor by the issuance of such preliminary injunctive relief will be less than the hardship which would be imposed upon such franchisee if such preliminary injunctive relief were not granted.
(3) Nothing in this subsection prevents any court from requiring the franchisee in any action under subsection (a) to post a bond, in an amount established by the court, prior to the issuance or continuation of any equitable relief.
(4) In any action under subsection (a), the court need not exercise its equity powers to compel continuation or renewal of the franchise relationship if such action was commenced—
(A) more than 90 days after the date on which notification pursuant to section 2804(a) of this title was posted or personally delivered to the franchisee;
(B) more than 180 days after the date on which notification pursuant to section 2804(b)(2) of this title was posted or personally delivered to the franchisee; or
(C) more than 30 days after the date on which the termination of such franchise or the nonrenewal of such franchise relationship takes effect if less than 90 days notification was provided pursuant to section 2804(b)(1) of this title.
(c) Burden of proof; burden of going forward with evidence
(d) Actual and exemplary damages and attorney and expert witness fees to franchisee; determination by court of right to exemplary damages and amount; attorney and expert witness fees to franchisor for frivolous actions
(1) If the franchisee prevails in any action under subsection (a), such franchisee shall be entitled—
(A) consistent with the Federal Rules of Civil Procedure, to actual damages;
(B) in the case of any such action which is based upon conduct of the franchisor which was in willful disregard of the requirements of section 2802, 2803, or 2807 of this title, or the rights of the franchisee thereunder, to exemplary damages, where appropriate; and
(C) to reasonable attorney and expert witness fees to be paid by the franchisor, unless the court determines that only nominal damages are to be awarded to such franchisee, in which case the court, in its discretion, need not direct that such fees be paid by the franchisor.
(2) The question of whether to award exemplary damages and the amount of any such award shall be determined by the court and not by a jury.
(3) In any action under subsection (a), the court may, in its discretion, direct that reasonable attorney and expert witness fees be paid by the franchisee if the court finds that such action is frivolous.
(e) Discretionary power of court to compel continuation or renewal of franchise relationship; grounds for noncompulsion; right of franchisee to actual damages and attorney and expert witness fees unaffected
(1) In any action under subsection (a) with respect to a failure of a franchisor to renew a franchise relationship in compliance with the requirements of section 2802 of this title, the court may not compel a continuation or renewal of the franchise relationship if the franchisor demonstrates to the satisfaction of the court that—
(A) the basis for such nonrenewal is a determination made by the franchisor in good faith and in the normal course of business—
(i) to convert the leased marketing premises to a use other than the sale or distribution of motor fuel,
(ii) to materially alter, add to, or replace such premises,
(iii) to sell such premises,
(iv) to withdraw from the marketing of motor fuel through retail outlets in the relevant geographic market area in which the marketing premises are located, or
(v) that renewal of the franchise relationship is likely to be uneconomical to the franchisor despite any reasonable changes or reasonable additions to the provisions of the franchise which may be acceptable to the franchisee; and
(B) the requirements of section 2804 of this title have been complied with.
(2) The provisions of paragraph (1) shall not affect any right of any franchisee to recover actual damages and reasonable attorney and expert witness fees under subsection (d) if such nonrenewal is prohibited by section 2802 of this title.
(f) Release or waiver of rights
(1) No franchisor shall require, as a condition of entering into or renewing the franchise relationship, a franchisee to release or waive—
(A) any right that the franchisee has under this subchapter or other Federal law; or
(B) any right that the franchisee may have under any valid and applicable State law.
(2) No provision of any franchise shall be valid or enforceable if the provision specifies that the interpretation or enforcement of the franchise shall be governed by the law of any State other than the State in which the franchisee has the principal place of business of the franchisee.
(Pub. L. 95–297, title I, § 105, June 19, 1978, 92 Stat. 331; Pub. L. 103–371, § 4, Oct. 19, 1994, 108 Stat. 3485; Pub. L. 110–140, title II, § 241(b), Dec. 19, 2007, 121 Stat. 1540.)

CITE AS: 15 USC 2805

§ 2806. Relationship of statutory provisions to State and local laws
(a) Termination or nonrenewal of franchise
(1) To the extent that any provision of this subchapter applies to the termination (or the furnishing of notification with respect thereto) of any franchise, or to the nonrenewal (or the furnishing of notification with respect thereto) of any franchise relationship, no State or any political subdivision thereof may adopt, enforce, or continue in effect any provision of any law or regulation (including any remedy or penalty applicable to any violation thereof) with respect to termination (or the furnishing of notification with respect thereto) of any such franchise or to the nonrenewal (or the furnishing of notification with respect thereto) of any such franchise relationship unless such provision of such law or regulation is the same as the applicable provision of this subchapter.
(2) No State or political subdivision of a State may adopt, enforce, or continue in effect any provision of law (including a regulation) that requires a payment for the goodwill of a franchisee on the termination of a franchise or nonrenewal of a franchise relationship authorized by this subchapter.
(b) Transfer or assignment of franchise
(1) Nothing in this subchapter authorizes any transfer or assignment of any franchise or prohibits any transfer or assignment of any franchise as authorized by the provisions of such franchise or by any applicable provision of State law which permits such transfer or assignment without regard to any provision of the franchise.
(2) Nothing in this subchapter shall prohibit any State from specifying the terms and conditions under which any franchise or franchise relationship may be transferred to the designated successor of a franchisee upon the death of the franchisee.
(Pub. L. 95–297, title I, § 106, June 19, 1978, 92 Stat. 332; Pub. L. 103–371, § 5, Oct. 19, 1994, 108 Stat. 3485.)

CITE AS: 15 USC 2806

§ 2807. Prohibition on restriction of installation of renewable fuel pumps
(a) Definition
In this section:
(1) Renewable fuel
The term “renewable fuel” means any fuel—
(A) at least 85 percent of the volume of which consists of ethanol; or
(B) any mixture of biodiesel and diesel or renewable diesel (as defined in regulations adopted pursuant to section 7545(o) of title 42 (40 CFR, part 80)), determined without regard to any use of kerosene and containing at least 20 percent biodiesel or renewable diesel.
(2) Franchise-related document
The term “franchise-related document” means—
(A) a franchise under this chapter; and
(B) any other contract or directive of a franchisor relating to terms or conditions of the sale of fuel by a franchisee.
(b) Prohibitions
(1) In general
No franchise-related document entered into or renewed on or after December 19, 2007, shall contain any provision allowing a franchisor to restrict the franchisee or any affiliate of the franchisee from—
(A) installing on the marketing premises of the franchisee a renewable fuel pump or tank, except that the franchisee’s franchisor may restrict the installation of a tank on leased marketing premises of such franchisor;
(B) converting an existing tank or pump on the marketing premises of the franchisee for renewable fuel use, so long as such tank or pump and the piping connecting them are either warranted by the manufacturer or certified by a recognized standards setting organization to be suitable for use with such renewable fuel;
(C) advertising (including through the use of signage) the sale of any renewable fuel;
(D) selling renewable fuel in any specified area on the marketing premises of the franchisee (including any area in which a name or logo of a franchisor or any other entity appears);
(E) purchasing renewable fuel from sources other than the franchisor if the franchisor does not offer its own renewable fuel for sale by the franchisee;
(F) listing renewable fuel availability or prices, including on service station signs, fuel dispensers, or light poles; or
(G) allowing for payment of renewable fuel with a credit card,
so long as such activities described in subparagraphs (A) through (G) do not constitute mislabeling, misbranding, willful adulteration, or other trademark violations by the franchisee.
(2) Effect of provision
(c) Exception to 3-grade requirement
(Pub. L. 95–297, title I, § 107, as added Pub. L. 110–140, title II, § 241(a), Dec. 19, 2007, 121 Stat. 1538.)

CITE AS: 15 USC 2807