View all text of Part IV [§ 1231 - § 1260]
§ 1253. Transfers of franchises, trademarks, and trade names
(a) General rule
(b) DefinitionsFor purposes of this section—
(1) Franchise
(2) Significant power, right, or continuing interestThe term “significant power, right, or continuing interest” includes, but is not limited to, the following rights with respect to the interest transferred:
(A) A right to disapprove any assignment of such interest, or any part thereof.
(B) A right to terminate at will.
(C) A right to prescribe the standards of quality of products used or sold, or of services furnished, and of the equipment and facilities used to promote such products or services.
(D) A right to require that the transferee sell or advertise only products or services of the transferor.
(E) A right to require that the transferee purchase substantially all of his supplies and equipment from the transferor.
(F) A right to payments contingent on the productivity, use, or disposition of the subject matter of the interest transferred, if such payments constitute a substantial element under the transfer agreement.
(3) Transfer
(c) Treatment of contingent payments by transferor
(d) Treatment of payments by transferee
(1) Contingent serial payments
(A) In general
(B) Amounts to which paragraph appliesAn amount is described in this subparagraph if it—
(i) is contingent on the productivity, use, or disposition of the franchise, trademark, or trade name, and
(ii) is paid as part of a series of payments—(I) which are payable not less frequently than annually throughout the entire term of the transfer agreement, and(II) which are substantially equal in amount (or payable under a fixed formula).
(2) Other payments
(3) Renewals, etc.
(Added Pub. L. 91–172, title V, § 516(c)(1), Dec. 30, 1969, 83 Stat. 647; amended Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 101–239, title VII, § 7622(a)–(c), Dec. 19, 1989, 103 Stat. 2377; Pub. L. 101–508, title XI, § 11701(i), Nov. 5, 1990, 104 Stat. 1388–508; Pub. L. 103–66, title XIII, § 13261(c), Aug. 10, 1993, 107 Stat. 539; Pub. L. 104–188, title I, § 1704(t)(47), Aug. 20, 1996, 110 Stat. 1889; Pub. L. 108–357, title VIII, § 886(b)(3), Oct. 22, 2004, 118 Stat. 1641.)