Underneath the Golden Boy - Robson Hall Faculty of Law

Response to Consultation Paper on Franchise Law 331
(a) The franchisor, during the 180-day period after giving notice offers such
franchisee a right of first refusal of at least 30 days’ duration of a bona fide
offer, made by another to purchase such franchisor’s interest in such premises; or
(b) In the case of the sale, transfer, or assignment to another person of the
franchisor’s interest in one or more other controlled marketing premises, such other
person in good faith offers the franchisee a franchise on substantially the same terms
and conditions currently being offered by such other person to other franchisees. 121
Lastly, in addition to the 180-day notice, the Act allows for non-renewal
when the franchisor and franchisee fail to agree to changes or additions to the
terms and conditions of the franchise agreement, if such changes or additions
would result in renewal of the franchise agreement on substantially the same
terms and conditions on which the franchisor is then customarily granting
original franchises. In such instances, the franchisor may give the franchisee
written notice of a date which is at least 30 days from the date of such notice, on
or before which a proposed written agreement of the terms and conditions of the
renewal franchise shall be accepted in writing by the franchisee. Such notice,
which given no less than 180 days before the end of the franchise term, may
state that in the event of failure of such acceptance by the franchisee, the notice
shall be deemed a notice of intention not to renew at the end of the franchise
term. 122
Under the Illinois Franchise Disclosure Act of 1987, it is deemed a violation
of the Act for a franchisor to refuse to renew a franchise of a franchised business
without compensating the franchisee either by repurchase or by other means for
the diminution in the value of the franchised business caused by the expiration
of the franchise. This shall be so where (a) the franchisee is barred by the
franchise agreement (or by the refusal of the franchisor at least six months prior
to the expiration date of the franchise to waive any portion of the franchise
agreement which prohibits the franchisee) from continuing to conduct
substantially the same business under another trademark, servicemark, trade
name or commercial symbol in the same area subsequent to the expiration of the
franchise; or (b) the franchisee has not been sent notice of the franchisor’s
intent not to renew the franchise at least six months prior to the expiration date
or any extension thereof of the franchise. 123
Iowa’s 1992 Franchises Act establishes that a franchisor shall not refuse to
renew a franchise unless both of the following apply: (a) the franchisee has been
notified of the franchisor’s intent not to renew at least six months prior to the
121
Ibid. at §20025(e).
122
Ibid. at §20025(f).
123
Ill. Comp. Stat. §705/20.