94TH CONGRESS 1ST SESSION H. R. 5663 IN THE HOUSE OF REPRESENTATIVES APRIL 7, 1975 Mr. SISK introduced the following bill; which was referred to the Committee on Interstate and Foreign Commerce A BILL To provide for the protection of franchised distributors and retailers of motor fuel. 1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 3 That this Act may be cited as the "Fair Marketing of Motor 4 Fuel Act". ст 5 6 7 со SECTION 1. As used in this Act (1) the term "distributor” means a person who purchases motor fuel for sale, consignment, or distribution to another, and includes any person who controls, is con 9 trolled by, or is under common control with, a person 10 11 who purchases motor fuels for sale, consignment, or distribution to another; 2 (2) the term "franchise" means any agreement or contract (A) between a refiner and a distributor, (B) between a refiner and a retailer, or (C) between a distributor and a retailer, under which such retailer or distributor is granted by a refiner or distributor (as the case may be) the authority to use in connection with the sale of a motor fuel, a trademark, trade name, service mark, or other identifying symbol or name which is owned or controlled by a refiner. In the case where there is an agreement or contract to so use a trademark, trade name, service mark, or other identifying symbol or name, the term "franchise" shall include any agree ment or contract under which such retailer or distributor is granted authority to occupy premises owned, leased, or in any way controlled by a refiner or a distributor which premises are to be employed for the sale or distribution of motor fuel under the motor fuel trademark, trade name, service mark, or other identifying symbol or name which is owned or controlled by a refiner; (3) the term "franchisor" means a refiner or distributor who grants a distributor or retailer (as the case may be) the authority to use a motor fuel trademark, trade name, service mark, or other identifying symbol or name under a franchise; (4) the term "franchisee" means a distributor or 3 retailer (as the case may be) who is granted the author ity under a franchise to use a motor fuel trademark, trade name, service mark, or other identifying symbol or name; (5) the term "refiner" means a person engaged in the refining or importing of motor fuel, and includes any person who controls, is controlled by (other than by means of a franchise), or is under common control with, a person engaged in the refining or importing of motor fuel; (6) the term "retailer" means a person engaged in the sale of a motor fuel for purposes other than resale; (7) the term "motor fuel" means gasoline and diesel fuel for use in motor vehicles; (8) the term "essential" means a term of a franchise which is reasonably necessary and related to the franchise relationship; (9) the phrase "failure to comply" does not include any failure which is only technical or unimportant; and 16 17 18 19 20 21 22 ify an expiration date. SEC. 2. (1) Except as otherwise provided in this sec 25 tion 2 or in section 5, every franchise and any renewal (10) the phrase "failure to renew" includes a termination or cancellation of a franchise which does not spec 4 1 thereof offered or granted by a franchisor shall be for a term 2 of not less than five years' duration and shall not be termi 3 nated or canceled by the franchisor during any such term. 4 (2) A franchise for a term of less than five years' du5 ration may be offered or granted by a franchisor in either of 6 the following instances: 7 8 9 10 11 12 13 14 15 16 17° 18 (a) where the franchisor holds as lessee and not as owner premises to be subleased to the franchisee, the franchisor shall not be required to offer or to grant a franchise for a term extending beyond the thirtieth day preceding the expiration of the term of the lease under which such franchisor holds the premises at the time of such offer or grant; or (b) where the franchisee has rejected an offer of a franchise for a term of not less than five years' duration, the franchisor may offer and grant a franchise for any shorter term in the franchisor's discretion. SEC. 3. (a) A franchisor may not, prior to the expiration date specified in the franchise, terminate or cancel such 20 franchise, unless 19 223 21 (1) the franchisee failed to act in good faith in carrying out the terms of the franchise; (2) the franchisee failed to comply without reasonable excuse or justification with essential and reasonable terms of the franchise; 1 2 3 4 5 6 7 8 5 (3) a circumstance occurs which is specified in the franchise which circumstance is relevant to the operation of the franchise relationship and where termination or cancellation before the expiration date specified in the franchise is reasonable in light of such circumstance; or (4) the franchisor and the franchisce mutually agree to terminate or cancel the franchise. (b) A franchisor may not fail to renew a franchise 9 unless 10 11 12 23 (1) the provisions of paragraph (1), (2), (3), or (4) of subsection (a) are met, or (2) the franchisor and the franchisee fail to agree 13 to reasonable changes or reasonable additions to the 15 (c) (1) A franchisor may not terminate or cancel a 16 franchise (prior to the expiration date specified in the 17 franchise), or fail to renew a franchise, unless such fran18 chisor furnishes notification pursuant to this subsection to 19 the franchisee affected thereby. Such notification shall be 20 in writing and sent to such franchisee by certified mail not 21 less than ninety days prior to the date on which such fran22 chise is to be terminated or canceled, or not renewed, unless, 23 in light of the circumstances, it would not be reasonable to 24 provide notice ninety days in advance of such cancellation, 25 termination, or failure to renew. In circumstances where it |