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--- version:As IntroducedOpens in a new window+++ version:(document, no version)@@ -1,519 +1,30 @@-BILL AS INTRODUCED H.733-2026 Page 1 of 22+H.733 (Act 82)-VT LEG #385547 v.1-H.733 1-Introduced by Representatives Marcotte of Coventry, Graning of Jericho, 2-Bosch of Clarendon, Carris Duncan of Whitingham, Duke of 3-Burlington, Micklus of Milton, Olson of Starksboro, Page of 4-Newport City, and White of Bethel 5-Referred to Committee on 6-Date: 7-Subject: Commerce and trade; franchise agreement regulation 8-Statement of purpose of bill as introduced: This bill proposes to regulate the 9-relationship between franchisors and franchisees in this State, including the 10-regulation of franchise agreements. 11-An act relating to the regulation of franchise agreements 12-It is hereby enacted by the General Assembly of the State of Vermont: 13-Sec. 1. 9 V.S.A. chapter 106 is added to read: 14-CHAPTER 106. FRANCHISE AGREEMENTS 15-§ 4051. DEFINITIONS 16-As used in this chapter: 17-(1)(A) “Agreement not to compete” means an agreement between a 18-franchisor and franchisee that restricts the franchisee after separating from the 19-franchisor from operating its business: 20-BILL AS INTRODUCED H.733-2026 Page 2 of 22+An act relating to designating a franchise relationship-VT LEG #385547 v.1-(i) in a certain geographic area; 1-(ii) for a certain period of time; or 2-(iii) in any other way that significantly impacts the ability of the 3-franchisee to compete with the franchisor. 4-(B) An agreement not to compete does not include an agreement that 5-prohibits the disclosure of trade secrets as defined in section 4601 of this title 6-or a nondisclosure agreement that protects confidential business information 7-that does not constitute a trade secret. 8-(2) “Franchise” means the brand, name, trademark, or other identifying 9-information owned and managed by a franchisor. 10-(3) “Franchise agreement” means an agreement in which a franchisor 11-grants a franchisee the right to operate a business or to offer, sell, or distribute 12-goods or services identified or associated with the franchisor’s trademark. 13-(4) “Franchised business” means a business that is being operated by a 14-franchisee that is subject to a franchise agreement with a franchisor. 15-(5) “Franchisee” means a person that currently operates or formerly 16-operated a business under a franchisor’s brand, name, trademark, or other 17-identifying information, pursuant to a franchise agreement. 18-(6) “Franchisor” means a person that sells the right to operate a business 19-to a franchisee pursuant to a franchise agreement. 20-BILL AS INTRODUCED H.733-2026 Page 3 of 22+Sponsors:-VT LEG #385547 v.1-§ 4052. TERMINATION BY FRANCHISOR 1-(a) Except as otherwise provided in this chapter, no franchisor shall 2-terminate a franchise agreement prior to the expiration of its term, except for 3-good cause. 4-(b) Except as provided in subsection (c) of this section, good cause shall be 5-limited to the failure of the franchisee to substantially comply with the lawful 6-requirements imposed upon the franchisee by the franchise agreement after 7-being given written notice not less than 60 days in advance of the termination 8-and a reasonable opportunity to cure the failure, which shall be not less than 60 9-days after receipt of the notice of noncompliance. 10-(c) If, during the period in which the franchise agreement is in effect, there 11-occurs any of the following events that are relevant to the franchised business, 12-immediate notice of termination by the franchisor without an opportunity to 13-cure shall be deemed reasonable: 14-(1) The franchisee is the subject of an order for relief in bankruptcy or 15-judicially determined to be insolvent, all or a substantial part of the assets 16-thereof are assigned to or for the benefit of any creditor, or the franchisee 17-admits the franchisee’s inability to pay the franchisee’s debts as they come 18-due. 19-(2) The franchisee abandons the franchised business by failing to 20-operate the business for five consecutive days during which the franchisee is 21-BILL AS INTRODUCED H.733-2026 Page 4 of 22+Rep. Michael Marcotte, Rep. Edye Graning,-VT LEG #385547 v.1-required to operate the business under the terms of the franchise agreement, 1-unless such failure to operate is due to fire, flood, earthquake, or other similar 2-causes beyond the franchisee’s control. 3-(3) The franchisor and franchisee agree in writing to terminate the 4-franchise agreement. 5-(4) The franchisee makes any material misrepresentations relating to the 6-acquisition of the franchised business or the franchisee engages in conduct that 7-reflects materially and unfavorably upon the operation and reputation of the 8-franchised business. 9-(5) The franchisee fails, for a period of 10 days after notification of 10-noncompliance, to comply with any federal, State, or local law or regulation, 11-including all health, safety, building, and labor laws or regulations applicable 12-to the operation of the franchised business. 13-(6) The franchisee, after curing any failure pursuant to subsection (b) of 14-this section, engages in the same noncompliance, whether or not such 15-noncompliance is corrected after notice, in excess of three times in a calendar 16-year. 17-(7) The franchisee repeatedly fails to substantially comply with the 18-lawful requirements of the franchise agreement, whether or not corrected after 19-notice. 20-BILL AS INTRODUCED H.733-2026 Page 5 of 22+,+Rep. David Bosch, Rep. Emily Carris Duncan, Rep. Abbey Duke, Rep. Anthony Micklus, Rep. Herb Olson, Rep. Woodman Page, Rep. Kirk White,-VT LEG #385547 v.1-(8) The franchisee or business premises of the franchisee are seized, 1-taken over, or foreclosed by a government official in the exercise the official’s 2-duties or seized, taken over, or foreclosed by a creditor, lienholder, or lessor, 3-provided that a final judgment against the franchisee remains unsatisfied for 30 4-days, unless a supersedeas or other appeal bond has been filed or a levy of 5-execution has been made upon the license granted by the franchise agreement 6-or upon any property used in the franchised business and it is not discharged 7-within five days following such levy. 8-(9) The franchisee is convicted of a felony or any other criminal 9-misconduct that is relevant to the operation of the franchise. 10-(10) The franchisee fails to pay any franchise fees or other amounts due 11-to the franchisor or its affiliate not less than 10 days after receiving written 12-notice that such fees are overdue. 13-(11) The franchisor is able to meet the burden of proof that the 14-continued operation of the franchised business by the franchisee will result in 15-an imminent danger to public health or safety. 16-§ 4053. INVENTORY AFTER TERMINATION OR NONRENEWAL 17-(a) Except as provided in this section, upon a lawful termination or 18-nonrenewal of a franchise agreement pursuant to this chapter, the franchisor 19-shall purchase from the franchisee, at the then-current market value, all 20-inventory, supplies, equipment, fixtures, furnishings, and improvements 21-BILL AS INTRODUCED H.733-2026 Page 6 of 22+Last Recorded Action: 4/22/2026 - House message: Governor approved bill on April 20, 2026-VT LEG #385547 v.1-purchased or paid for under the terms of the franchise agreement or any 1-ancillary or collateral agreement by the franchisee from or to the franchisor or 2-its approved suppliers and sources, that are, at the time of the notice of 3-termination or nonrenewal, in the possession of the franchisee or used by the 4-franchisee in the franchised business. The franchisor shall have the right to 5-receive clear title to and possession of all items purchased from the franchisee 6-pursuant to this section. 7-(b) This section shall not require the franchisor to purchase any 8-personalized items or inventory, supplies, equipment, fixtures, or furnishings: 9-(1) not reasonably required to conduct the operation of the franchised 10-business in accordance with the franchise agreement or any ancillary or 11-collateral agreement; or 12-(2) to which the franchisee, at the cessation of operation of the 13-franchised business by the franchisee, cannot lawfully, or does not, grant the 14-franchisor clear title and possession upon the franchisor’s payment to the 15-franchisee for the inventory, supplies, equipment, fixtures, or furnishings. 16-(c) This section shall not apply: 17-(1) when the franchisee declines a bona fide offer of renewal from the 18-franchisor, which does not include an agreement that is substantially different 19-than the original contract, including royalties and fees paid, split of revenue 20-share, or term of contract; 21-BILL AS INTRODUCED H.733-2026 Page 7 of 22+Committee Activity - Witnesses Who Testified-VT LEG #385547 v.1-(2) if the franchisor does not prevent the franchisee from retaining 1-control of the principal place of the franchised business; 2-(3) to any termination or nonrenewal of a franchise due to a publicly 3-announced and nondiscriminatory decision by the franchisor to completely 4-withdraw from all franchise activity within the relevant geographic market area 5-in which the franchised business is located; 6-(4) if the franchisor and franchisee mutually agree in writing to 7-terminate or not renew the franchise agreement; and 8-(5) to any inventory, supplies, equipment, fixtures, or furnishings that 9-are sold by the franchisee between the date of the notice of termination or 10-nonrenewal and the cessation of operation of the franchised business, by the 11-franchisee, pursuant to the termination or nonrenewal. 12-(d) Upon the termination or nonrenewal of a franchise agreement, a 13-franchisor may offset against the amounts owed to a franchisee under this 14-section any amounts owed by the franchisee to the franchisor if the: 15-(1) franchisee agrees to the amount owed; or 16-(2) franchisor has received a final adjudication of any amounts owed. 17-§ 4054. NONRENEWAL 18-(a) Advance notice. No franchisor shall fail to renew a franchise agreement 19-unless such franchisor provides the franchisee with written notice of its 20-BILL AS INTRODUCED H.733-2026 Page 8 of 22+Regular Session 2025-2026-VT LEG #385547 v.1-intention not to renew at least 180 days before the termination date of the 1-agreement; and 2-(1) during the 180 days prior to termination of the franchise agreement 3-the franchisor permits the franchisee to sell the franchisee’s business to a 4-purchaser meeting the franchisor’s then-current requirements for granting new 5-franchises, or if the franchisor is not granting a significant number of new 6-franchises, the then-current requirements for granting renewal franchises; or 7-(2) the refusal to renew is not for the purpose of converting the 8-franchisee’s business premises to operation by employees or agents of the 9-franchisor for such franchisor’s own account, provided that nothing in this 10-subdivision or subdivision (1) of this subsection shall prohibit a franchisor 11-from exercising a right of first refusal to purchase the franchisee’s business; 12-and 13-(A) termination would be permitted pursuant to section 4052 of this 14-title; 15-(B) the franchisee and the franchisor agree not to renew the 16-franchise; or 17-(C) the franchisor withdraws from distributing its products or 18-services through franchises in the geographic market served by the franchisee, 19-provided that: 20-BILL AS INTRODUCED H.733-2026 Page 9 of 22+House Committee on Commerce and Economic Development-VT LEG #385547 v.1-(i) the franchisor, during the period of time after giving notice 1-pursuant to this subsection (a), offers such franchisee a right of first refusal of 2-not less than 30 days of a bona fide offer made by another to purchase such 3-franchisor’s interest in such premises; 4-(ii) in the case of the sale, transfer, or assignment to another 5-person of the franchisor’s interest in one or more other controlled marketing 6-premises, such other person in good faith offers the franchisee a franchise on 7-substantially the same terms and conditions currently being offered by such 8-other person to other franchisees; or 9-(iii) the franchisor and the franchisee fail to agree to changes or 10-additions to the terms and conditions of the franchise agreement, if such 11-changes or additions would result in renewal of the franchise agreement on 12-substantially the same terms and conditions on which the franchisor is then 13-customarily granting renewal franchises, or if the franchisor is not then 14-granting a significant number of renewal franchises, the terms and conditions 15-on which the franchisor is then customarily granting new franchises. 16-(b) Nothing in subsection (a) of this section shall prohibit a franchisor from 17-offering or agreeing before expiration of the current franchise term to extend 18-the term of the franchise for a limited period in order to satisfy the time of 19-notice of nonrenewal requirement of this section. 20-BILL AS INTRODUCED H.733-2026 Page 10 of 22+David Hall, Director of Business Services, Secretary of State's Office-VT LEG #385547 v.1-§ 4055. TERMINATION BY FRANCHISEE 1-A franchisee may terminate a franchise agreement without penalty or fees, 2-in the event of changes to the franchise system or the competitive 3-circumstances of the franchised business that would cause substantial negative 4-impact or substantial financial hardship to the franchisee in the operation of its 5-franchised business. 6-§ 4056. TRANSFER OR SALE OF BUSINESS BY FRANCHISEE 7-(a) Death of franchisee. No franchisor shall deny the surviving spouse, 8-heirs, or estate of a deceased franchisee the opportunity to participate in the 9-ownership of the franchise under a valid franchise agreement for not less than 10-12 months after the death of the franchisee or majority shareholder of the 11-franchisee. During that time, the surviving spouse, heirs, or estate of the 12-deceased shall either satisfy all of the then-current qualifications for a 13-purchaser of a franchised business or sell, transfer, or assign the franchise to a 14-person that satisfies the franchisor’s then-current standards for new 15-franchisees. The rights granted pursuant to this section shall be granted subject 16-to the surviving spouse, heirs, or estate of the deceased maintaining all 17-standards and obligations of the franchise agreement. 18-(b) Freedom to sell. 19-(1) It is unlawful for a franchisor to prevent a franchisee from selling or 20-transferring a franchise, all or substantially all of the assets of the franchised 21-BILL AS INTRODUCED H.733-2026 Page 11 of 22+Rik Sehgal, Legislative Counsel, Office of Legislative Counsel-VT LEG #385547 v.1-business, or a controlling or noncontrolling interest in the franchised business 1-to another person provided that the person is qualified under the franchisor’s 2-then-existing standards for the approval of new or renewing franchisees. 3-These standards shall be made available to the franchisee and shall be 4-consistently applied to similarly situated franchisees operating within the 5-franchise brand. 6-(2) Notwithstanding subdivision (1) of this subsection, a franchisee shall 7-not have the right to sell, transfer, or assign the franchise, all or substantially 8-all of the assets of the franchised business, or a controlling or noncontrolling 9-interest in the franchised business without the written consent of the franchisor, 10-except that the consent shall not be withheld unless the: 11-(A) buyer, transferee, or assignee does not meet the standards for 12-new or renewing franchisees described in subdivision (1) of this subsection (b); 13-or 14-(B) franchisee and the buyer, transferee, or assignee do not comply 15-with the transfer conditions specified in the franchise agreement. 16-(c) Right of first refusal. This section does not prohibit a franchisor from 17-exercising the contractual right of first refusal to purchase a franchised 18-business, all or substantially all of the assets of a franchised business, or a 19-controlling or noncontrolling interest in a franchised business after receipt of a 20-bona fide offer from a proposed purchaser to purchase the franchised business, 21-BILL AS INTRODUCED H.733-2026 Page 12 of 22+Senate Committee on Finance-VT LEG #385547 v.1-assets, or interest. A franchisor exercising the contractual right of first refusal 1-shall offer the seller payment at least equal to the value offered in the bona fide 2-offer. This section does not require a franchisor to exercise a contractual right 3-of first refusal. 4-(d) Notification of intent to sell. 5-(1) The franchisee shall, prior to the sale, assignment, or transfer of a 6-franchised business, all or substantially all of the assets of a franchised 7-business, or a controlling or noncontrolling interest in the franchised business 8-to another person, notify the franchisor of the franchisee’s intent to sell, 9-transfer, or assign the franchise, all or substantially all of the assets of the 10-franchised business, or the controlling or noncontrolling interest in the 11-franchised business. The notice shall be in writing and delivered to the 12-franchisor by business courier or by receipted mail and include all of the 13-following: 14-(A) The proposed transferee’s name and address. 15-(B) A copy of all agreements related to the sale, assignment, or 16-transfer of the franchise, the assets of the franchised business, or the interest in 17-the franchised business. 18-(C) The proposed transferee’s application for approval to become the 19-successor franchisee, which shall include all forms, financial disclosures, and 20-related information generally utilized by the franchisor in reviewing 21-BILL AS INTRODUCED H.733-2026 Page 13 of 22+David Hall, Director of Business Services, Secretary of State's Office-VT LEG #385547 v.1-prospective new franchisees, if those forms are readily made available to the 1-existing franchisee. If the forms are not readily available, the franchisee shall 2-request and the franchisor shall deliver the forms to the franchisee not later 3-than 15 days after the request. 4-(2) As soon as practicable after the receipt of the proposed transferee’s 5-application, the franchisor shall notify, in writing, the franchisee and the 6-proposed transferee of any additional information or documentation necessary 7-to complete the transfer application. If the franchisor’s then-existing standards 8-for the approval of new or renewing franchisees are not readily available to the 9-franchisee when the franchisee notifies the franchisor of the franchisee’s intent 10-to sell, transfer, or assign the franchise, the assets of the franchised business, or 11-the controlling or noncontrolling interest in the franchised business, the 12-franchisor shall communicate the standards to the franchisee not later than 15 13-days after receiving the notification. 14-(e) Approval or disapproval of sale. 15-(1) The franchisor shall, not later than 60 days after the receipt of all of 16-the necessary information and documentation required pursuant to subsection 17-(d) of this section, or as specified by written agreement between the franchisor 18-and the franchisee, notify the franchisee of the approval or disapproval of the 19-proposed sale, assignment, or transfer. A proposed sale, assignment, or 20-transfer shall be deemed approved unless disapproved by the franchisor in the 21-BILL AS INTRODUCED H.733-2026 Page 14 of 22+Rep. Anthony "Tony" Micklus, Sponsor, House Committee on Commerce and Economic Development-VT LEG #385547 v.1-manner provided by this subsection. If the proposed sale, assignment, or 1-transfer is disapproved, the franchisor shall include in the notice of disapproval 2-a statement setting forth the reasons for the disapproval. 3-(2) In any action in which the franchisor’s disapproval of a sale, 4-assignment, or transfer pursuant to this section is an issue, the reasonableness 5-of the franchisor’s decision shall be a question of fact requiring consideration 6-of all existing circumstances. For purposes of this subsection, the finder of fact 7-may be an arbitrator specified in the franchise agreement or an arbitrator 8-chosen from a list of impartial arbitrators supplied by the American Arbitration 9-Association or another impartial person. Nothing in this subsection shall 10-prohibit summary judgment when the reasonableness of transfer approval or 11-disapproval can be decided as a matter of law. 12-§ 4057. RIGHTS AND PROHIBITIONS 13-The following rights and prohibitions govern the relationship between a 14-franchisor and its franchisee: 15-(1) The parties shall deal with each other in good faith and in a 16-commercially reasonable manner. 17-(2) A franchisor or franchisee, during the sale or establishment of a 18-franchised business, shall not misrepresent or fail to disclose any of the 19-following: 20-BILL AS INTRODUCED H.733-2026 Page 15 of 22--VT LEG #385547 v.1-(A) the prospects or chances for success of the proposed or existing 1-franchised business; 2-(B) the known total investment for such franchised business; or 3-(C) any effort to sell or establish more franchise locations than is 4-reasonable to expect the market or market area for the particular franchise to 5-sustain. 6-(3) It is prohibited and deemed an unfair and deceptive act or practice, 7-or an unfair method of competition, and a violation of this chapter for a 8-franchisor, or an officer, agent, employee, or other representative of a 9-franchisor, to directly or indirectly do any of the following: 10-(A) terminate or fail to renew a franchise agreement in violation of 11-this chapter; 12-(B) allow a franchise agreement to expire without complying with 13-this chapter; 14-(C) fail to repurchase inventory, supplies, goods, fixtures, and 15-equipment as required by this chapter; 16-(D) violate Section 5(a) of the Federal Trade Commission Act, 15 17-U.S.C § 45, in connection with its business as a franchisor, or an officer, agent, 18-or other representative thereof; 19-BILL AS INTRODUCED H.733-2026 Page 16 of 22--VT LEG #385547 v.1-(E) resort to false or misleading advertising in connection with its 1-business as a franchisor, or an officer, agent, or other representative of a 2-franchisor; 3-(F) without prior written disclosure to a franchisee, obtain vendor 4-rebates, kickbacks, or similar payments from another person with which the 5-franchisee does business or that the franchisee employs on account of or in 6-relation to the transactions between the franchisee, the franchisor, and the other 7-person; 8-(G) require a franchisee to assent to a release, assignment, novation, 9-waiver, or estoppel that would relieve any person for liability imposed under 10-this chapter, including through the use of a disclaimer or checklist designed to 11-avoid protection under this chapter; 12-(H) require a franchisee to make any capital expenditure greater than 13-$5,000.00 without providing a validated business case to the franchisee 14-showing that such expenditure has a positive return on investment for the 15-franchisee; 16-(I) require a franchisee to purchase or lease goods or services of the 17-franchisor or from approved sources of supply unless and to the extent that the 18-franchisor satisfies the burden of proving that such restrictive purchasing 19-agreements are reasonably necessary for a lawful purpose justified on business 20-BILL AS INTRODUCED H.733-2026 Page 17 of 22--VT LEG #385547 v.1-grounds, and do not substantially affect competition, provided that this 1-subdivision (I) does not apply to the initial inventory of the franchise; 2-(J) discriminate between franchisees in the charges offered or made 3-for goods, services, equipment, rentals, or advertising services or in any other 4-business dealing, unless and to the extent that the franchisor satisfies the 5-burden of proving that any classification of or discrimination between 6-franchisees is: 7-(i) reasonable; 8-(ii) based on franchises granted at materially different times and 9-such discrimination is reasonably related to such difference in time, or is based 10-on other proper and justifiable distinctions considering the purposes of this 11-chapter; and 12-(iii) not arbitrary, provided that nothing in this subdivision (iii) 13-precludes negotiation of the terms and conditions of a franchise at the initiative 14-of the franchisees; 15-(K) sell, rent, or offer to sell to a franchisee any product or service for 16-more than a fair and reasonable price; 17-(L) obtain money, goods, services, anything of value, or any other 18-benefit from any other person with which the franchisee does business on 19-account of such business unless such benefit is disclosed to the franchisee; 20-BILL AS INTRODUCED H.733-2026 Page 18 of 22--VT LEG #385547 v.1-(M) restrict a franchisee from sourcing environmentally conscious 1-products that meet required specifications or products that use environmentally 2-conscious packaging; or 3-(N) fail to make readily available to franchisees, without charge, true, 4-accurate, and complete copies of all records of marketing, rewards programs, 5-and advertising funds and fees that have been paid by franchisees, vendors, 6-suppliers, and licensees. 7-§ 4058. FRANCHISE AGREEMENT PROVISIONS 8-(a) Pricing. A franchisor shall not require a franchisee to sell any product 9-or service for a price at a loss or otherwise not reasonably acceptable to the 10-franchisee. 11-(b) Liquidated damages. Liquidated damages clauses shall not be 12-enforceable in a case of termination of the franchise agreement by the 13-franchisor. 14-(c) No cross default. A default under one franchise agreement shall not in 15-and of itself constitute a default under another franchise agreement to which 16-the franchisee or an affiliate of the franchisee is a party. 17-(d) Control. No franchisor shall maintain direct or indirect control of the 18-franchisee’s employees or of the day-to-day operation of the franchised 19-business. 20-BILL AS INTRODUCED H.733-2026 Page 19 of 22--VT LEG #385547 v.1-(e) Hours of operation. No renewal of a franchise agreement or change in 1-the operations manual or like policy shall impose a change in the hours of 2-operation in which the franchisee deems that it is unprofitable or unsafe to 3-operate, or that interferes with a religious holiday. 4-(f) Notices. All notices of termination or nonrenewal required by this 5-chapter: 6-(1) shall be in writing; 7-(2) shall be posted by registered, certified, or other receipted mail; 8-delivered by telegram; or personally delivered to the franchisee; and 9-(3) shall contain a statement of intent to terminate or not renew the 10-franchised business together with: 11-(A) the reasons therefor; and 12-(B) the effective date of such termination or nonrenewal or 13-expiration. 14-(g) Negotiated franchise agreement. Any franchise agreement that differs 15-from the disclosed franchise agreement shall, in totality, have negotiated terms 16-that are to the benefit of the franchisee. 17-(h) Arbitration. Pre-dispute, mandatory arbitration clauses are forbidden in 18-a franchise agreement. 19-(i) Venue of disputes. A provision in a franchise agreement restricting 20-venue to a forum outside this State is void with respect to any claim arising 21-BILL AS INTRODUCED H.733-2026 Page 20 of 22--VT LEG #385547 v.1-under or relating to a franchise agreement involving a franchised business 1-operating within this State. 2-(j) Limitations of claims. No franchise agreement shall place a limitation 3-on claims that is in conflict with existing State law. 4-(k) Noncompete language. 5-(1) Any agreement not to compete, including an agreement not to 6-compete contained within a contract or franchise agreement, is void and 7-unenforceable. 8-(2) For existing agreements not to compete that violate subdivision (1) 9-of this subsection, the franchisor must notify each franchisee that is party to the 10-agreement that the agreement not to compete is void and legally unenforceable. 11-Notice shall be in the form of a written individualized communication 12-addressed to the franchisee or former franchisee and shall be delivered to the 13-last known address and email address of the franchisee or former franchisee. 14-§ 4059. LIABILITY 15-(a) Liability and governing law. 16-(1) If any franchisor violates any provision of this chapter, a franchisee 17-may bring an action against such franchisor in any court of competent 18-jurisdiction of this State for damages sustained by the franchisee as a 19-consequence of the franchisor’s violation, together with the actual costs of the 20-action, including reasonable actual attorney’s fees, and the franchisee also may 21-BILL AS INTRODUCED H.733-2026 Page 21 of 22--VT LEG #385547 v.1-be granted injunctive relief against unlawful termination, cancellation, 1-nonrenewal, or any other act or practice prohibited by this chapter. 2-(2) Notwithstanding any term or provision of a franchise agreement to 3-the contrary: 4-(A) the laws of this State shall govern the interpretation of the 5-franchise agreement of a franchise located in the State and the performance of 6-the parties thereunder; 7-(B) the courts of this State and the federal courts with jurisdiction 8-over cases filed in the State shall have exclusive jurisdiction with respect to 9-any action brought under this chapter or any action brought by a franchisor 10-concerning a franchise located in this State; and 11-(C) except as expressly provided herein, nothing in this chapter shall 12-abrogate the right of a franchisee to sue under any other law. 13-(b) Unlawful termination or nonrenewal. In the event a franchisor 14-terminates or fails to renew a franchisee in violation of this chapter, the 15-franchisee shall be entitled to receive from the franchisor the fair market value 16-of the franchised business and franchise assets and any other damages caused 17-by the violation of this chapter. 18-(c) Offset. The franchisor may offset against any remedies a prior recovery 19-by the franchisee and any sums owed to the franchisor or its subsidiaries by the 20-franchisee pursuant to the franchise agreement or any ancillary agreement. 21-BILL AS INTRODUCED H.733-2026 Page 22 of 22--VT LEG #385547 v.1-Sec. 2. EFFECTIVE DATE 1-This act shall take effect on July 1, 2026. 2+Rik Sehgal, Legislative Counsel, Office of Legislative Counsel
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