TITLE XXXI
TRADE AND COMMERCE
Chapter 339-C
REGULATION OF GASOLINE FRANCHISES
Section 339-C:1
339-C:1 Definitions. –
In this chapter:
I. "Agreement" means any written agreement between a supplier and a dealer under which the dealer is granted the right to use a trademark, trade name, service mark or other identifying symbol or name owned by the supplier.
II. "Commission agent" means a person who receives remuneration for his services in the form of a commission. The commission may be in the form of a percentage, a set fee, or a rate.
III. "Dealer" means any person who is not a petroleum supplier and who is engaged in the retail sale of gasoline to the motoring public in the state under agreements entered into with a petroleum supplier.
IV. "Distributor" means a person, other than a major oil company, who is engaged in commerce in the state, marketing petroleum products through the sale, consignment or distribution of such products to wholesale and retail accounts.
V. "Franchise" means the right of a dealer to operate a business under an agreement, and shall include both dealers who own and dealers who lease the premises on which the franchise is operated.
VI. "Major brand" means the trademark name of a company's product which is sold, consigned, or distributed and which is controlled or owned by a supplier.
VII. "Person" means an individual, corporation, business trust, estate, trust, partnership, unincorporated association, 2 or more of the foregoing having a joint or common interest, or any other legal or commercial entity.
VIII. "Retail service station" means any service station, garage, or retail outlet which sells automotive gasoline and diesel fuel to the general public for ultimate consumption.
IX. "Secondary brand" means the trademark name of a second brand owned and controlled by a supplier and which is sometimes used as an alternative operating brand name under certain circumstances.
X. "Special modification" means a temporary adjustment of the normal rental rate.
XI. "Supplier" means any person, other than a distributor, engaged in the sale, consignment or distribution of petroleum products to retail service stations.
XII. "Unbranded station" means any retail service station, which sells gasoline under a private label trade name.
Source. 1974, 24:1. 1983, 456:1, eff. Oct. 1, 1983.
Section 339-C:2
339-C:2 Agreements Regulated. –
This chapter shall apply to agreements pertaining to the sale of gasoline and related products when (a) more than 20 percent of the dealer's gross sales are covered by such agreement and (b) such gross sales covered by such agreement are more than $25,000 yearly.
Source. 1974, 24:1, eff. June 1, 1974.
Section 339-C:3
339-C:3 Supplier's Disclosure to Dealer. –
A supplier shall disclose in writing to any prospective dealer the following information, before any agreement is concluded:
I. The gallonage volume history, if any, of the location under negotiation for and during the 3 year period immediately past or for the entire period which the location has been supplied by the supplier, whichever is shorter.
II. The name and last known address of the previous dealers for the last 3 years, or for the entire period during which the location has been supplied by the supplier, whichever is shorter, and the reason for the termination of each dealer's agreement.
III. Any legally binding commitments for the sale, demolition or other disposition of the location in effect prior to the termination date of the agreement.
IV. The training programs, if any, and the specific goods and services the supplier will provide without cost to the dealer.
V. Full disclosure of any and all obligations which will be required of the dealer, including, but not limited to, any obligation to exclusively deal in any of the products of the supplier, its subsidiaries or any other company or any advertising and promotional items that the dealer must accept.
VI. Full disclosure of all restrictions on the sale, transfer, renewal and termination of the agreement.
Source. 1974, 24:1, eff. June 1, 1974.
Section 339-C:4
339-C:4 Supplier's Right to Terminate Agreement. –
I. A supplier who enters into an agreement for the purpose of conducting a gas station business, which may include a lease with options to renew said agreement or to renew said lease if one is included, may terminate, cancel or refuse to renew such agreement or lease, by submitting notice to the dealer at least 90 days before the effective date of such termination, cancellation or refusal to renew.
II. A supplier shall not impose any conditions on a dealer which are not stated in the agreement between the parties, unless mutually amended or modified.
III. Grounds for termination, cancellation or refusal to renew an agreement or lease which are not contained in the agreement between the supplier and the dealer may be decided by negotiation between the supplier and the dealer or any negotiating agent designated by the dealer.
IV. Abandonment of a franchise for more than 2 weeks by the dealer shall constitute waiver by the dealer of any rights under this section.
Source. 1974, 24:1, eff. June 1, 1974.
Section 339-C:5
339-C:5 Repurchase by Supplier Upon Termination. –
In the event of any termination, cancellation or refusal to renew, whether by mutual agreement or otherwise, a supplier shall make or cause to be made an offer in good faith to repurchase from the dealer at then current wholesale prices any and all merchantable products purchased by said dealer from the supplier; provided, however, that in such event, the supplier shall have the right to apply the proceeds against any existing indebtedness owed to him by the dealer and further provided that such repurchase obligation is conditioned upon there being no other claims or liens against such products by or on behalf of other creditors of the dealer. Any deposit held by the supplier is to be returned to said dealer within 120 days from the date of termination, cancellation, or refusal to renew the agreement or lease, in the event of no prior claims or liens.
Source. 1974, 24:1, eff. June 1, 1974.
Section 339-C:6
339-C:6 Dealer Trade Associations. –
No supplier shall hinder, coerce or threaten any dealer for the purpose of preventing him from joining any trade association made up of dealers. Dealers shall have a right to select bargaining agents to negotiate and deal with suppliers on matters having to do with their supplier-dealer relationship. Suppliers shall be obliged to bargain in good faith with agents so selected by the dealers. Such bargaining activity shall be pursued to the maximum extent permitted by law.
Source. 1974, 24:1, eff. June 1, 1974.
Section 339-C:7
339-C:7 Dealer's Action for Damages; Attorney Fees. –
I. A dealer may bring an action for damages sustained as a result of:
(a) Failure to make such disclosures as are required in RSA 339-C:3; or
(b) Failure to make an offer in good faith to repurchase as required in RSA 339-C:5; or
(c) Wrongful termination of or refusal to renew his agreement as set forth in RSA 339-C:4; or
(d) Any violation of RSA 339-C:6.
II. The remedy provided for in this section is in addition to all other remedies available under contract or as provided by law or equity, including injunctive relief. If the court finds that the violation of this chapter has been wilful, the court may allow reasonable attorney fees.
Source. 1974, 24:1, eff. June 1, 1974.
Section 339-C:8
339-C:8 Void Agreement Provisions. –
Any of the following provisions in an agreement or lease, if one is included, whether oral or written, between a supplier and dealer, shall be void as against public policy:
I. Provisions requiring a dealer to take part in any advertising or promotional campaigns which will require the dealer to accept any posters, stamps, tickets, gifts, bonuses, premiums, or any other promotional items; or
II. Provisions requiring a dealer to restrict the time spent on the repair and maintenance of automobiles in the course of business; or
III. Provisions requiring a dealer to purchase any products of the supplier other than gasoline or diesel fuel. The dealer may, however, agree to accept such products on consignment, but not exclusive as to like products; or
III-a. Provisions restricting a dealer from reusing motor oil or waste oil for heating purposes; or
IV. Provisions requiring a dealer to assent to any release, assignment, novation, waiver, or estoppel which would relieve any person from liability imposed by this chapter.
Source. 1974, 24:1. 1990, 88:1, eff. June 9, 1990.
Section 339-C:9
339-C:9 Limitation of Actions. –
No action may be brought under this chapter for a cause of action which arose more than one year prior to the date such action is brought.
Source. 1974, 24:1, eff. June 1, 1974.
Continuation of a Franchise
Section 339-C:10
339-C:10 Prohibited Agreements. –
No agreement between a supplier and a dealer may provide that a dealer's franchise shall be terminated upon the death of the dealer if the dealer has designated a successor as provided for in this subdivision.
Source. 1983, 456:2, eff. Oct. 1, 1983.
Section 339-C:11
339-C:11 Designation of Successor. –
The dealer may designate a successor who shall be either the dealer's surviving spouse or adult child. The successor shall meet the reasonable qualifications then required of dealers by the supplier for the operation of a franchise.
Source. 1983, 456:2, eff. Oct. 1, 1983.
Section 339-C:12
339-C:12 Primary and Alternate Successor. –
A dealer may designate one primary and one alternate successor. If the dealer designates an alternate successor, the alternate successor shall have no rights under this subdivision unless the primary successor notifies the alternate successor within 21 days of the death of the dealer that the primary successor does not intend to send written notice of intent to assume and operate the franchise. Either the primary successor or the alternate successor, whichever is to assume and operate the franchise, shall give notice of election within the 21 day period required in RSA 339-C:13 if he wishes to assume control as provided in this subdivision.
Source. 1983, 456:2, eff. Oct. 1, 1983.
Section 339-C:13
339-C:13 Election to Assume a Franchise. –
A designated successor is allowed 21 days after the death of the dealer to send written notice to the supplier of an election to assume and operate the franchise. The notice shall contain information reasonably required by the supplier regarding business experience and financial responsibility. The successor shall offer to assume the franchise 3 days, not including Saturdays, Sundays or state holidays, after the election and shall begin operation of the franchise within 7 days after it has been assumed.
Source. 1983, 456:2, eff. Oct. 1, 1983.
Section 339-C:14
339-C:14 Deposit for Rent; Discharge of Franchise Obligations. –
I. A supplier may require a dealer designating a successor to deposit with the supplier a sum equal to a reasonable estimate of 21 days' rent to the supplier. This deposit, if made, may be used only to compensate the supplier if the designated successor does not assume the franchise within the time required under RSA 339-C:13.
II. If any portion of the deposit is not used because the successor gives notice of election to assume the franchise within the 21 day period after the dealer's death or because the supplier temporarily operates the franchise during the 21 day period, the supplier shall refund the unused portion to the estate or legal representative of the dealer.
III. In addition to requiring a deposit under paragraph I, the supplier may require the dealer designating a successor to arrange for the discharge or performance of other franchise obligations, including, but not limited to, insurance payments. The supplier may not require the dealer to arrange for the service station to be kept open to the public during the 21 days following his death. Failure of a franchise to operate after the death of a dealer and before a successor has assumed control and operation shall not constitute an abandonment of the franchise under RSA 339-C:4, IV.
Source. 1983, 456:2, eff. Oct. 1, 1983.
Section 339-C:15
339-C:15 Extent of Successor's Franchise. –
The franchise available to the successor under this subdivision shall be no more or less than the franchise held by the dealer at the time of his death. This subdivision is not intended to expand or diminish the rights of suppliers or dealers under state or federal law.
Source. 1983, 456:2, eff. Oct. 1, 1983.
Section 339-C:16
339-C:16 Operation of Franchise After Dealer's Death. –
I. Unless the supplier agrees otherwise in writing, a franchise shall not be operated after the death of a dealer by anyone other than the supplier for its own account until all parts of the franchise have been expressly assumed as provided in this subdivision.
II. Assumption of a franchise includes, but is not limited to:
(a) Lease or leases;
(b) Products agreements;
(c) Loaned equipment agreements;
(d) Federal and state environmental law compliance agreements; and
(e) Required licenses or tax permits.
III. A supplier may operate a franchise by contract or otherwise for its own account after the death of a dealer and before the operation of the franchise by the dealer's successor. Under these circumstances, the supplier shall have no obligation to the heirs or estate of the dealer or to the successor, except that the supplier must account to the heirs or the estate of the dealer for:
(a) The unused portion of any prepaid rent;
(b) Unused sums prepaid by the dealer for any reason; and
(c) Any physical inventory salvaged from the franchise and used or sold by the supplier.
Source. 1983, 456:2, eff. Oct. 1, 1983.
Section 339-C:17
339-C:17 Account Required of Successor. –
If a successor assumes a franchise and there has been no intervening operation of the franchise by the supplier, the successor shall account to the heirs or estate of the dealer for the value of and for the disposition of personal property of the dealer located at or related to the franchise.
Source. 1983, 456:2, eff. Oct. 1, 1983.
Section 339-C:18
339-C:18 Time Within Which Performance is Required. –
All actions to be performed by a supplier or by a successor shall be performed within a reasonable time unless otherwise specifically provided in this subdivision.
Source. 1983, 456:2, eff. Oct. 1, 1983.
Sale, Transfer or Assignment of a Franchise
Section 339-C:19
339-C:19 Supplier's Consent to Sale of Franchise. –
I. Notwithstanding the terms of any franchise, a supplier may not refuse to consent to the sale, transfer or assignment of a franchise by a dealer unless:
(a) The proposed purchaser, transferee or assignee:
(1) Has less business experience and training than that normally required by the supplier of prospective dealers;
(2) Has fewer financial resources than those normally required;
(3) Does not satisfy uniform requirements, if any, required by the supplier of prospective dealers at the time of the proposed sale, transfer or assignment; or
(4) Operates a franchise under an agreement with a supplier other than the supplier to whom the sale, transfer or assignment is proposed if the supplier requires that prospective dealers not operate under an agreement with another supplier; or
(b) The dealer has not offered in writing to sell, transfer or assign the franchise to the supplier on terms and conditions which are the same as those of the proposed sale, transfer or assignment, and the dealer has allowed the supplier at least 30 days in which to accept or decline his offer prior to the sale, transfer or assignment of the franchise.
II. Notwithstanding the terms of any franchise which is held by a corporation, a supplier shall consent to the sale, transfer or assignment of a franchise by a dealer if:
(a) The dealer has a controlling interest in the corporation; or
(b) The dealer offers in writing to guarantee personally the corporation's performance of its obligations under the franchise.
Source. 1983, 456:2, eff. Oct. 1, 1983.
Section 339-C:20
339-C:20 Transfer Fee. –
If a supplier consents to a proposed sale, transfer or assignment of a franchise, the supplier may require the dealer to pay a transfer fee to the supplier. The transfer fee shall be reasonable in relationship to the sale price of the franchise and shall not exceed one percent of the gross sale price. The transfer fee may not be required to frustrate a proposed sale, transfer or assignment.
Source. 1983, 456:2, eff. Oct. 1, 1983.
Section 339-C:21
339-C:21 Restraint of Trade. –
I. Notwithstanding RSA 339-C:19, a supplier may refuse to consent to the sale, transfer or assignment of a franchise if the transaction would result in restraint of trade in the sale of petroleum products.
II. For the purposes of this section, trade in the sale of petroleum products is presumed to be restrained if, as a result of the transaction, the proposed purchaser, transferee or assignee would sell on the average more than:
(a) Five percent of the petroleum products sold in the county in which the dealer's premises are located; or
(b) Ten percent of the petroleum products sold under the supplier's trademark, trade name or logo in the county in which the dealer's premises are located.
Source. 1983, 456:2, eff. Oct. 1, 1983.
Section 339-C:22
339-C:22 Hours of Operation. –
No agreement between a dealer and a supplier shall require a dealer to keep his retail service station open for business any specified number of hours per day or any specified number of days per week.
Source. 1983, 456:2, eff. Oct. 1, 1983.
Section 339-C:23
339-C:23 Void Terms. –
The terms of any franchise entered into after October 1, 1983, shall be void if they conflict with any provision of this subdivision or RSA 339-C:10 through 17.
Source. 1983, 456:2, eff. Oct. 1, 1983.