States without franchise relationship laws

Texas, Florida, New York and Maryland have no general franchise termination statute, per the sources read. What that means, and what was not confirmed.

A franchise relationship law limits when and how a franchisor can end an agreement. Many states have none. In those states the franchise agreement, and general contract law, set the notice and cure terms. Four states are covered below where the sources read found no general termination statute, followed by states that were not confirmed.

The International Franchise Association (IFA) is an industry association, and its statements below are labelled as its own. Its chart lists Texas, Florida and New York as having "no generally applicable franchise relationship or disclosure statute" and points to "the required notice and cure period under the agreement." The IFA's "or disclosure" wording is wrong for New York and Florida, which have disclosure-type laws, so this page relies on the chart only for the relationship point.

What each of the four states has instead

StateWhat its franchise statute doesTermination notice or cure rule
TexasNo relationship statute, per the IFA chart. The Texas Secretary of State says a franchisor complying with the FTC disclosure rules files an exemption notice before offering or selling, instead of registering.None found
FloridaFla. Stat. 817.416 makes it unlawful, when selling or establishing a franchise, to intentionally misrepresent matters such as prospects for success or the required total investment. A franchisee who proves a violation may receive a judgment for all moneys invested, plus costs and possibly attorney's fees.None in 817.416
New YorkThe Franchise Sales Act (General Business Law Article 33) requires registration of the offering prospectus before a franchise is offered or sold, and voids provisions that waive compliance. Section 691 gives a damages claim for sale violations.None found in the sections read (680, 681, 683, 687, 691)
MarylandThe Maryland Franchise Registration and Disclosure Law (Business Regulation 14-201 to 14-233) concerns registration and sale. Section 14-226 bars requiring a prospective franchisee to waive liability under it as a condition of sale.None for ordinary franchises. A separate law (Commercial Law 11-1301 to 11-1306) covers wholesale distributors of commercial goods, with 60 days' notice and a cure-plan process

Texas Business and Commerce Code chapter 51 (business opportunities), Florida's Sale of Business Opportunities Act and sections of New York's Article 33 and Maryland's franchise subtitle that were not opened are not covered here.

What a missing statute does and does not mean

The absence of a relationship statute means no state law sets a minimum notice or cure period for ordinary franchise terminations. It does not mean the agreement is the only source of rules. Federal rules, the contract's own good-faith terms, other state laws and court decisions may all matter, and a lawyer licensed in the state is the person to say which. See state franchise relationship laws for the comparison and the FTC franchise rule for the federal side.

In these states, the notice itself and the termination clause become the main documents to read. What a default notice states lists what such a notice normally contains.

Virginia is different

Virginia has a franchise relationship statute, the Retail Franchising Act. Va. Code 13.1-564 says: "It shall be unlawful for a franchisor to cancel a franchise without reasonable cause." The section does not define reasonable cause and sets no notice period, cure period or non-renewal rule. The IFA chart gives a figure of "30 days or the required notice/cure period under the agreement" for Virginia, but that number is not in the statute text read, so this site does not state a Virginia notice period.

The Act applies where the franchise contemplates or requires a place of business in Virginia and a franchise fee of $500 or more is paid (13.1-559). Under 13.1-571, a franchisee damaged by a violation of 13.1-564 may sue for damages plus costs and reasonable attorney's fees, within four years. Waivers of the chapter are void, but agreements to binding arbitration are not barred.

States not confirmed from statute text

Three more states appear on the IFA's list of 20 jurisdictions with relationship laws, but this site did not read their statutes.

  • Arkansas: the Arkansas Franchise Practices Act is cited in the IFA chart. The official code text could not be opened, so no day counts are given here.
  • Mississippi: the IFA chart and a law firm article refer to Miss. Code 75-24-53. The text could not be opened, so nothing is stated about good cause, cure or remedies.
  • South Dakota: one IFA document says there is no generally applicable franchise relationship or disclosure statute, while another lists the state among the 20 jurisdictions. The two do not agree and the statute text could not be read, so nothing is said about South Dakota.

Questions to look for in your own notice and agreement

  1. Which state's law does the agreement choose, and where is the business located?
  2. What notice and cure terms does the agreement itself set, in days and from which event?
  3. Does the notice cite a clause number, and does that clause say what the notice says it does?
  4. Does the agreement require arbitration or a particular court?

The notice and the franchise agreement control your own dates. A lawyer licensed in your state can advise on whether any other law applies.

Where this came from

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