Delaware Code Title 6 Sec. 2552 – Unjust termination of, or failure to renew, a franchise
(a) Termination of a franchise by a franchisor shall be deemed to be “unjust,” or to have been made “unjustly,” if such termination is without good cause or in bad faith. Any termination of a franchise which is not unjust shall be deemed to be “just,” or to have been made “justly.”
Terms Used In Delaware Code Title 6 Sec. 2552
- Franchise: means a contract or other arrangement governing the business relationship within this State between a franchised distributor and a franchisor where the franchised distributor is required to pay more than $100 to enter into such contract or other arrangement; provided, however, that a franchised distributor as defined under paragraph (2)(d) of this section shall not be required to have paid any consideration to enter into such contract or other arrangement. See Delaware Code Title 6 Sec. 2551
- Franchised distributor: means an individual, partnership, corporation, or unincorporated association with a place of business within the State, and engaged in the business of:
(a) Purchasing or taking on consignment products which bear the trademark or trade name of the manufacturer, producer or publisher for the primary purpose of selling such products to retail outlets; or
(b) Selling in or through retail outlets products which bear the trademark or trade name of no more than 3 manufacturers, producers, publishers, trademark licensors, or trade name licensors; or
(c) Purchasing or taking on consignment, books, magazines, journals, newspapers, or other publications for the primary purpose of selling such publications to retail outlets; or
(d) Operating a service station, filling station, store, garage or other place of business for the sale of motor fuel for delivery into the service tank or tanks of any vehicle propelled by an internal combustion engine. See Delaware Code Title 6 Sec. 2551
- Franchisor: means an individual, partnership, corporation or unincorporated association in the business of:
(a) Distributing or selling to one or more franchised distributors, on its own behalf or on behalf of another, products which bear the trademark or trade name of the manufacturer, producer or publisher; or
(b) Licensing the use of one or more trademarks or trade names to one or more franchised distributors; or
(c) Distributing or selling to one or more franchised distributors, on its own behalf or on behalf of another, books, magazines, journals, newspapers, and/or other publications published by it or by another; or
(d) Producing or refining of petroleum products, or the producer or fabricator of any automotive products sold or distributed by a service station. See Delaware Code Title 6 Sec. 2551
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Personal property: All property that is not real property.
- State: means the District of Columbia or the Commonwealth of Puerto Rico or any state, territory, possession, or other jurisdiction of the United States other than the State of Delaware. See Delaware Code Title 6 Sec. 17-101
(b) The failure of a franchisor to renew a franchise shall be deemed to be “unjust,” or to have been made “unjustly,” if such failure to renew is without good cause or in bad faith. Any failure to renew a franchise which is not unjust shall be deemed to be “just,” or to have been made “justly.”
(c) A provision of a franchise which permits a franchisor to terminate that franchise, which provision does not specify the grounds upon which such termination may be made, shall be construed to permit the franchisor to make only a just termination.
(d) A provision of a franchise which permits a franchisor to fail to renew that franchise, which provision does not specify the grounds upon which such failure to renew may be made, shall be construed to permit the franchisor only justly to fail or refuse to renew.
(e) A provision in a franchise permitting a franchisor to make an unjust termination of a franchise is against the public policy of this State and shall not be enforced in the courts of this State.
(f) A provision in a franchise permitting a franchisor unjustly to fail or refuse to renew a franchise is against the public policy of this State and shall not be enforced in the courts of this State.
(g) No franchisor may unjustly terminate a franchise.
(h) No franchisor may unjustly fail or refuse to renew a franchise.
(i) No franchisor may unjustly refuse to deal with a franchised distributor with whom the franchisor has been dealing for at least 2 years.
(j) Notwithstanding any terms of the franchise agreement to the contrary, no franchisor who leases real or personal property to a franchised distributor may charge the franchised distributor a rent or other charge for the use or occupancy of such real or personal property which is unreasonable or excessive in light of the franchisor’s interest in such real or personal property, and the purpose to which the real or personal property is being used. The refusal of the franchisor to renew a lease for real or personal property except upon the payment of a rent or other charge which is unreasonable or excessive in light of the use to which the property has been placed by the franchisor and/or the interest of the franchisor in the real or personal property shall be deemed to be an unjust termination of the franchise.
6 Del. C. 1953, § ?2552; 57 Del. Laws, c. 693; 62 Del. Laws, c. 352, § ?4;