No franchisor may fail to renew a franchise unless such franchisor provides the franchisee at least sixty (60) days’ prior written notice of its intention not to renew, such failure to renew is for good cause, and the franchisor has provided written notice of the facts and circumstances upon which it alleges that good cause exists to fail to renew. Any modification of an existing franchise agreement proposed by a franchisor must be disclosed no later than sixty (60) days prior to the proposed effective date of the modification unless the franchisee consents, in writing, within the sixty-day period, to waive such requirement. If failure to renew is for good cause, such nonrenewal may not be effective unless:

(1) During the sixty (60) days prior to expiration of the franchise, the franchisor permits the franchisee to sell the business or a portion thereof relating to the franchisee, to a purchaser meeting the franchisor’s then current requirements for granting new franchises, or, if the franchisor is not granting a significant number of new franchises, the then current requirements for granting renewal franchises;

Terms Used In Tennessee Code 47-25-1505

  • Franchise: means a written or oral agreement for a definite or indefinite period, in which a person grants to another person authority to use a trade name, trademark, service mark or related characteristic within an exclusive territory, or to sell or distribute goods or services, within an exclusive territory, at wholesale, retail, by lease agreement or otherwise. See Tennessee Code 47-25-1502
  • Franchisee: means a person to whom a franchise is offered or granted only if such person is required to be licensed under §. See Tennessee Code 47-25-1502
  • Franchisor: means a person who grants a franchise to another person where such person is the holder of a permit issued pursuant to §. See Tennessee Code 47-25-1502
  • Good cause: means :
    (A) Failure by a franchisee to comply substantially with the requirements imposed or sought to be imposed upon the franchisee by the franchisor, which requirements are not discriminatory as compared with the requirements imposed on other similarly situated franchisees, either by their terms or in the manner of their enforcement, and which requirements are not in violation of any law or regulation. See Tennessee Code 47-25-1502
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
  • written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
(2)

(A) The refusal to renew is not for the purpose of converting the franchisee’s business premises to operation by employees or agents of the franchisor for such franchisor’s own account; provided, that nothing in this subdivision (2)(A) shall prohibit a franchisor from exercising a right of first refusal to purchase the franchisee’s business; and
(B) Upon expiration of the franchise, the franchisor agrees not to seek to enforce any covenant of the nonrenewed franchisee not to compete with the franchisor or franchisees of the franchisor;
(3) The franchisee and the franchisor agree not to renew the franchise; or
(4) The franchisor withdraws from distributing the products or services through franchises in the state of Tennessee for a period of not less than two (2) years; provided, that:

(A) Upon expiration of the franchise, the franchisor agrees not to seek to enforce any covenant of the nonrenewed franchisee not to compete with the franchisor or franchisee of the franchisor; and
(B) The failure to renew is not for the purpose of converting the business conducted by the franchisee pursuant to the franchise agreement to operation by employees or agents of the franchisor for such franchisor’s own account.
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