67th Legislature HB 558.1
1 HOUSE BILL NO. 558
2 INTRODUCED BY M. NOLAND
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4 A BILL FOR AN ACT ENTITLED: “AN ACT PROHIBITING A FRANCHISOR FROM ALTERING A CONTRACT
5 IN THE EVENT OF A TRANSFER BY THE FRANCHISEE; AND PROVIDING AN APPLICABILITY DATE.”
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7 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
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9 NEW SECTION. Section 1. Transfer or sale of a franchise -- continuance of contracts. (1)
10 Unless otherwise prohibited under a franchise agreement and in the event of a transfer between a franchisee
11 and a third party, the franchisor may not unilaterally alter existing contracts between the franchisor and the
12 franchisee and the transferee. A violation of this section constitutes an unfair trade practice subject to a
13 $10,000 fine for each violation.
14 (2) This section does not apply to:
15 (a) motorsports dealer contracts under Title 30, chapter 14, part 25;
16 (b) new motor vehicle franchise agreements under Title 61, chapter 4; or
17 (c) farm implement dealership agreements under Title 30, chapter 11.
18 (3) For the purposes of this section, "franchise agreement" means a contract or agreement by which:
19 (a) a franchisee is granted the right to engage in business under a marketing plan prescribed in
20 substantial part by the franchisor;
21 (b) the operation of the franchisee's business is substantially associated with the franchisor's
22 trademark, trade name, logotype, or other commercial symbol or advertising designating the franchisor; and
23 (c) the franchisee is required to pay, directly or indirectly, a fee for the right to operate under the
24 agreement.
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26 NEW SECTION. Section 2. Codification instruction. [Section 1] is intended to be codified as an
27 integral part of Title 30, chapter 14, and the provisions of Title 30, chapter 14, apply to [section 1].
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-1- Authorized Print Version – HB 558
67th Legislature HB 558.1
1
2 NEW SECTION. Section 3. Applicability. [This act] applies to franchise agreements entered into or
3 renewed on or after [the effective date of this act].
4 - END -
-2- Authorized Print Version – HB 558