Bill > H0733

This bill establishes new regulations for franchise agreements in Vermont, defining key terms like "franchise agreement" (an agreement where a franchisor grants a franchisee the right to operate a business under the franchisor's brand) and "agreement not to compete" (a restriction on a franchisee's ability to compete after leaving the franchisor). It outlines specific grounds for a franchisor to terminate a franchise agreement, generally requiring "good cause" and providing the franchisee with notice and an opportunity to fix any issues, with exceptions for severe situations like bankruptcy or abandonment. The bill also mandates that upon lawful termination or non-renewal, franchisors must repurchase inventory, supplies, and equipment from the franchisee at market value, with certain exceptions. Furthermore, it sets requirements for non-renewal, including advance notice and allowing the franchisee time to sell the business, and grants franchisees the right to terminate without penalty under specific circumstances of substantial negative impact. The bill also addresses the transfer or sale of a business by a franchisee, including provisions for the death of a franchisee and requiring franchisors to approve qualified buyers, while also allowing franchisors a right of first refusal. It prohibits unfair and deceptive practices by franchisors, such as misrepresentation, requiring unreasonable capital expenditures, or discriminating between franchisees, and prohibits mandatory pre-dispute arbitration clauses and venue restrictions outside of Vermont. Finally, the bill allows franchisees to sue franchisors for violations, with the laws of Vermont governing franchise agreements located in the state, and provides for damages and injunctive relief for unlawful termination or non-renewal. This act will take effect on July 1, 2026.

Business and Industry

https://legislature.vermont.gov/bill/status/2026/H.733