An Act To Enact the Maine Small Business Investment Protection Act
Sec. 1. 10 MRSA c. 208-C is enacted to read:
MAINE SMALL BUSINESS INVESTMENT PROTECTION ACT
§ 1299. Short title
This chapter may be known and cited as "the Maine Small Business Investment Protection Act."
§ 1299-A. Definitions
As used in this chapter, unless the context otherwise indicates, the following terms have the following meanings.
§ 1299-B. Applicability of chapter
A person who engages directly or indirectly in purposeful contacts in this State in connection with the offering or advertising for sale of a franchise or has business dealings with respect to a franchise in this State is subject to this chapter and is subject to the jurisdiction of the courts of this State. This chapter does not apply to a franchisor or franchisee who is subject to chapter 204, 206-B or 211-A.
§ 1299-C. Franchise sales practices
(1) All information required to be disclosed by law and at the time and in the manner required; and
(2) A written statement specifying, prominently and in not less than 14-point type, whether the franchise agreement involved contains a right to renew such agreement; or
§ 1299-D. Unfair acts and practices
(1) That discrimination between franchisees is necessary to allow a particular franchisee to fairly meet competition in the open market;
(2) That discrimination does not adversely affect the business of any existing franchisee; and
(3) To the extent that the franchisor satisfies the burden of proving that any classification of or discrimination between franchisees is reasonable, that discrimination is based on franchises granted at materially different times and that discrimination is reasonably related to the difference in time or on other proper and justifiable distinctions and is not arbitrary or intended to be for the benefit of the franchisor at the expense of any franchisee.
Nothing in this paragraph may be construed as granting to a franchisor any right that may be limited by any other state or federal law;
§ 1299-E. Limited fiduciary duty
§ 1299-F. Good faith and fair dealing; duty of due care
§ 1299-G. Encroachment
§ 1299-H. Transfer of a franchise
A franchisor may not exercise any purported right of first refusal or right to purchase with regard to any franchise or interest or assets of a franchisee upon the happening of any event described in paragraphs A to E.
§ 1299-I. Renewal of the franchise; notice
§ 1299-J. Termination; good cause; notice; opportunity to cure
(1) Punishable by a term of imprisonment in excess of one year;
(2) Directly related to the business conduct pursuant to the franchise;
(3) That materially impairs the goodwill value of the franchise or the franchised trademark; and
(4) That is no longer appealable.
In the event of such a conviction, notice may be given at any time following the date on which the conviction is no longer appealable and is effective upon delivery and written receipt of the notice. In no event may any franchisor collect any financial penalty or fee, however delineated, as a consequence of the conviction.
§ 1299-K. Transfer of franchise system by franchisor
§ 1299-L. Effect of termination
§ 1299-M. Warranties; indemnification
§ 1299-N. Enforcement
§ 1299-O. Void provisions; arbitration; mediation; class action
§ 1299-P. Time limitations; cause of action
§ 1299-Q. Good faith; good cause
§ 1299-R. Waiver by contract prohibited
The effect of this chapter may not be varied, waived or disclaimed by contract or agreement. Any contract or agreement purporting to do so is void and unenforceable to that extent only.
This bill enacts the Maine Small Business Investment Protection Act to protect franchisees in the sale and operation of franchise businesses.