Federal Fair Franchising Practices Act of 1997

Summary

Federal Fair Franchising Practices Act of 1997 - Requires a franchise (contract to enter into a franchised business) to include an implied duty to act in good faith in the performance and enforcement of rights and duties established in the franchise. (Sec. 3) Requires a franchisor to exercise the skill and knowledge normally possessed by franchisors in good standing in similar communities or trade areas, unless the franchisor: (1) represents that it has greater skill or knowledge; or (2) conspicuously disclaims that it has the normal skill or knowledge. (Sec. 4) Allows a franchisor to negotiate with a prospective franchisee concerning changes in franchise terms. (Sec. 5) Allows a franchisee to obtain equipment, fixtures, supplies, and services (goods) for the franchised business from any source, as long as they meet a reasonable standard of quality, except for: (1) a reasonable quantity of goods that the franchisor requires a franchisee to obtain from the franchisor; (2) goods that are a central feature of the franchised business; and (3) goods made by the franchisor that incorporate a trade secret. (Sec. 6) Prohibits a franchisor, without good cause, from terminating or refusing to renew a franchise whose terms are indeterminate. (Sec. 7) Authorizes a franchisee to transfer a transferable interest to a transferee who meets a franchisor's reasonable, essential, and nondiscriminatory standards for new franchisees or transferees. Requires appropriate notice of, and consent to, such a transfer. Outlines other transfer conditions, requirements, and prohibitions. (Sec. 8) States that a franchisor may not prohibit a franchisee from engaging in any lawful business at any location: (1) after expiration of the franchise term; (2) after termination of the franchise by the franchisee for good cause; or (3) after a transfer by the franchisee of its full franchise interest. (Sec. 9) Provides for freedom of association and collective bargaining rights for franchisees. (Sec. 10) Prohibits a franchisor from placing a new business outlet in unreasonable proximity to an established franchised outlet, with certain conditions and exceptions. (Sec. 11) Prohibits discrimination in the granting of franchises, the transfer of franchise interests, and the administration of a franchise system. (Sec. 12) Provides a private right of action for a franchise party who is injured by a violation of this Act or specified Federal regulations relating to business venture requirements.

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3 official files

• Introduced in House (text)

  Introduced in House · EN · 17 March 1997

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• Introduced in House (PDF)

  Introduced in House · EN · 17 March 1997

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• Introduced in House

  summary · EN · 17 March 1997

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