Code of Virginia § 59.1-21.14. Producer or refiner not to terminate, etc., agreement without notice and reasonable cause; nonrenewal by franchisor.
660 words·~3 min read·
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A. A producer or refiner shall not terminate, cancel, or fail to renew a petroleum products franchise unless he furnishes prior written notification pursuant to this paragraph to each dealer affected thereby. Such notification shall contain a statement of intention to terminate, cancel, or not renew with the reasons therefor; the date on which such action shall take effect; and shall be sent to such dealer by certified mail not less than sixty days prior to the date on which such petroleum products franchise will be terminated, canceled, or not renewed.
In circumstances where it would not be reasonable to provide advance notice of sixty days, the producer or refiner shall provide notice at the earliest date as is reasonably practicable. Termination, cancellation, or failure to renew shall be effective immediately upon notice given by certified mail to the dealer at his last known address in situations involving:
1. Failure of the dealer to open for business during reasonable business hours for five consecutive days, or
2. Criminal conduct or violations of law by the dealer involving moral turpitude, or
3. Bankruptcy, an assignment for the benefit of creditors by the dealer, or a petition for reorganization by the dealer, or
4. Condemnation or other taking of the premises, in whole or in part, pursuant to the power of eminent domain, or
5. Mutual agreement of the parties to terminate the franchise, or
6. Death, incapacity, or permanent and total disability of the dealer.
B. A producer or refiner shall not terminate, cancel, or fail to renew, a petroleum products franchise, except for reasonable cause.
C. Reasonable cause shall include, but not be limited to:
1. A failure of the dealer to comply substantially with the express provisions of such petroleum products franchise, or
2. A failure of the dealer to act in good faith in carrying out the terms of such petroleum products franchise, and federal and state laws, which shall include, but not be limited to:
(a)Adulteration of the producer's or refiner's products, or
(b)Misbranding of gasoline, or
(c)Misleading or deceiving consumers, or
(d)Trademark violations, or
(e)False or deceptive representations to the producer or refiner, or
3. Receipt and documentation by the supplier of repeated customer complaints uncorrected by the dealer within a reasonable time, or
4. A total withdrawal by the producer or refiner from the sale of motor fuels in commerce for sale in the county, city or standard statistical metropolitan area in which the franchise is situated, or
5. The occurrence of any of the situations set out in subsection A hereof, not requiring sixty days' notice.
D. A franchisor may elect not to renew a franchise which involves the lease by the franchisor to the franchisee of premises, in the event the franchisor:
1. Sells or leases such premises to other than a subsidiary or affiliate of the franchisor for any use; or
2. Sells or leases such premises to a subsidiary or affiliate of the franchisor, except such subsidiary or affiliate shall not use such premises for the retail sale of motor fuels; or
3. Converts such premises to a use other than the retail sale of motor fuels; or
4. Has leased such premises from a person not the franchisee and such lease is terminated, canceled or not renewed; or
5. Determines, in the case of any retail service station opened after July 1, 1979, under a franchise term of at least three years, in good faith and in the normal course of business that renewal of the petroleum products franchise is likely to be uneconomical to the producer or refiner despite any reasonable changes or reasonable additions to the provisions of the franchise which may be acceptable to the dealer.
E. The provisions of this section shall apply to any petroleum products franchise entered into or renewed on and after July 1, 1976.
1973, c. 423; 1976, c. 645; 1979, c. 306; 1997, c. 801 .