AI-assisted research summary: Motor vehicle lessor franchisors generally may not end a franchise before its term expires unless there is good cause, and lease-related disclosures must be made to lessees in the required form.
§1266. Motor vehicle lessors; appointment of motor vehicle lease facilitators A.(1) Except as otherwise provided by this Chapter, a motor vehicle lessor franchisor may not terminate a franchise prior to the expiration of its term, except for good cause. Good cause shall include but not be limited to the failure of the franchisee to comply with any lawful requirement of the franchise, after being given notice thereof, and a reasonable opportunity, which in no event need be more than thirty days, to cure the failure. Nothing herein shall permit the cancellation of a franchise solely for failure to meet performance standards based on a survey of sales penetration in a regional, national, territorial, or other geographic area. (2) If during the period in which the franchise granted by a motor vehicle lessor franchisor is in effect, there occurs any of the following events, which is relevant to the franchise, immediate notice of termination without opportunity to cure shall be reasonable: (a) The franchisee abandons the franchise by failing to operate the business for five consecutive days during which the franchisee is required to operate the business under the terms of the franchise, unless such failure to operate is due to fire, flood, or storms beyond the franchisee's control. (b) The motor vehicle lessor franchisor and the franchisee agree in writing to terminate the franchise. (c) The franchisee fails, for a period of ten days following notification of noncompliance, to comply with any federal, state, or local law or regulation applicable to the operation of the franchise. (d) The franchised business or business premises of the franchise is seized, taken over, or foreclosed on by a creditor, lienholder, or lessor, provided that a final judgment against the franchisee remains unsatisfied for thirty days, unless an appeal bond has been filed. (e) The franchisee fails to pay any franchise fees or other amounts due to the franchisor within ten days of receiving written notice that such fees are overdue. (3)(a) No motor vehicle lessor franchisor shall fail to renew a franchise unless the franchisor provides the following: (i) Written notice to the franchisee at least one hundred eighty days prior to his intention not to renew. (ii) The franchisee with an opportunity to sell his business, during the one hundred eighty days prior to the expiration of the franchise, to a purchaser meeting the franchisor's then current requirements for granting new franchises, or if not granting a significant number of new franchises, then the current requirements for granting renewal franchises. (iii) That the refusal not 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 Section shall prohibit a franchisor from exercising a right of first refusal to purchase a franchisee's business. (iv) That upon expiration of the franchise, the franchisor agrees not to seek to enforce any covenant of the unrenewed franchisee not to compete with the franchisor or franchisees of the franchisor. (b) Termination of a franchise shall be permitted pursuant to Paragraphs (1) and (2) of this Subsection, or if the franchisee and the franchisor agree not to renew the franchise. B.(1) A motor vehicle lessor may appoint one or more lease facilitators licensed pursuant to the terms of this Chapter to represent the motor vehicle lessor in obtaining prospective lease customers. An appointment complies with the requirements of this Subsection if it is in writing, discloses its terms, and otherwise complies with the rules of the commission. (2) In a lease contract or agreement between a motor vehicle lessor and a lessee solicited, procured, or produced by a lease facilitator, the motor vehicle lessor shall disclose to the lessee that a fee was paid, or will be paid to the lease facilitator for the solicitation, procurement, or production of the lessee or the lease. The motor vehicle lessor shall include the disclosure required by this Paragraph in a prominent position in one or both of the following manners: (a) On the face of the written memorandum of the lease, contract, or agreement. (b) On a separate instrument signed by the lessee at the same time as the signing of the lease contract or agreement. C.(1) Except as otherwise provided by this Section, a lease facilitator may accept a fee for procuring a vehicle lessee or prospective vehicle lessee for or on behalf of a lessor. (2) Nothing in this Section shall limit the ability of a lease facilitator to accept an appointment from more than one lessor. (3) Nothing in this Section shall prohibit a lease facilitator from representing a lessor or lessee in the acquisition of a motor vehicle for the purpose of leasing the vehicle to another person. Acts 2005, No. 500, §1, eff. July 12, 2005.