CHAPTER 739

TRADING STAMPS, MAIL ORDERS, FRANCHISES,
CREDIT PROGRAMS AND SUBSCRIPTIONS

Table of Contents

Sec. 42-126. Sale of merchandise with trading stamps, coupons or other similar devices.

Sec. 42-126a. Trading stamps.

Sec. 42-126b. Unsolicited sending of goods. Cancellation of trial offers and introductory rate offers. Automatic renewals. Unfair trade practices.

Sec. 42-126c. Disclosure requirements for mail order businesses in advertising or promotional materials.

Secs. 42-127 and 42-127a. Transferred

Sec. 42-127b. Licensing of persons in business on October 1, 1971.

Sec. 42-128. Bond required.

Secs. 42-128a to 42-129a. Transferred

Sec. 42-130. Use of terms.

Secs. 42-131 to 42-131d. Transferred

Secs. 42-132 and 42-133. Application in case of pretended purchase or assignment. Penalty.

Sec. 42-133a. Transferred

Sec. 42-133b. Forfeiture of consumer credit charges on failure to respond to debtor’s inquiry. Liability for damages if amount in error.

Sec. 42-133c. Finance charge applied by retail sellers on open-end credit plans.

Sec. 42-133d. Annual statement of interest imposed and paid under open-end credit plan.

Sec. 42-133e. Franchises: Definitions.

Sec. 42-133f. Termination, or cancellation of, or failure to renew a franchise.

Sec. 42-133g. Action for violation. Right to occupy franchise premises where lease expires upon termination of franchise. Items filed with court by franchisor seeking possession of franchise premises.

Sec. 42-133h. Applicability of sections 42-133e to 42-133g, inclusive.

Sec. 42-133i. Notice of expiration date of magazine subscription. Magazine subscription offer in the form of an invoice or bill. Unfair trade practice.

Sec. 42-133j. Legislative finding concerning petroleum product franchises.

Sec. 42-133k. Definitions.

Sec. 42-133l. Franchise agreements. Termination. Good cause. Notice required. Prohibited conduct. Terms.

Sec. 42-133m. Assignment of franchise. Automatic termination.

Sec. 42-133n. Remedies. Effect of judgment. Limitation of actions.

Secs. 42-133o and 42-133p. Reserved

Sec. 42-133q. Motor homes dealer, manufacturer or distributor: Applicable provisions of Secs. 42-133r to 42-133ee.

Sec. 42-133r. Definitions.

Sec. 42-133s. Obligations of manufacturers and distributors. Retail rate for parts and labor. Establishment, rebuttal and protest. Hearings. Dealer’s claims.

Sec. 42-133t. Liability of manufacturers and distributors for damages. Allocation of risk of loss.

Sec. 42-133u. Manufacturers or dealers to indemnify franchised dealers.

Sec. 42-133v. Cancellation, termination or nonrenewal of franchise. “Good cause” requirement. Notice. Appeal.

Sec. 42-133w. Manufacturer or distributor to compensate dealer upon termination, nonrenewal or cancellation.

Sec. 42-133x. Effects of a franchise termination, cancellation or nonrenewal.

Sec. 42-133y. Succession to ownership interest in dealership by family member upon owner’s death or incapacity.

Sec. 42-133z. Refusal to honor succession by family member. Notice.

Sec. 42-133aa. Burden of proof for succession refusal on manufacturer or distributor.

Sec. 42-133bb. Prohibited acts by manufacturer or distributor re dealer.

Sec. 42-133cc. Prohibited acts by manufacturer or distributor.

Sec. 42-133dd. Establishment of new franchises within a market area. Notice of intention. Protests. Procedure. Hearing.

Sec. 42-133ee. Civil action for injunction and damages.

Sec. 42-133ff. Surcharge based on method of payment prohibited. Acceptance of bank credit card bearing a trade name. Discount not prohibited. Contracts not to prohibit discounts based on method of payment for gasoline. Minimum purchase policy. Purchase of travel services using a credit card.

Sec. 42-133gg. Sale or transfer of names of credit cardholders.

Sec. 42-133hh. Restriction on information that may be printed on credit and debit card receipts.

Secs. 42-133ii to 42-133ll. Reserved

Sec. 42-133mm. Sale, transfers or assignment of franchisor’s interest.


Sec. 42-126. Sale of merchandise with trading stamps, coupons or other similar devices. Section 42-126 is repealed.

(1949 Rev., S. 6727; 1959, P.A. 528, S. 9.)

Sec. 42-126a. Trading stamps. (a) As used in this section: (1) “Trading stamp” means any stamp or similar device issued in connection with the retail sale of merchandise or service, as a cash discount or for any other marketing purpose, which entitles the rightful holder, on its presentation for redemption, to receive merchandise, service or cash. “Trading stamp” shall not mean any redeemable device used by the manufacturer or packer of an article, in advertising or selling it, or any redeemable device issued and redeemed by a newspaper, magazine or other publication; (2) “trading stamp company” means any person engaged in distributing trading stamps for retail issuance by others, or in redeeming trading stamps for retailers, in any manner; and (3) “person” means any individual, partnership, corporation, limited liability company, association or other organization.

(b) No trading stamp company shall distribute or redeem trading stamps issued after October 1, 1959, in this state unless (1) each stamp has legibly printed upon its face in cents or any fraction thereof a cash value determined by the company and (2) the holders may, at their option, redeem the stamps in cash when duly presented to the company for redemption in a number having an aggregate cash value of not less than twenty-five cents.

(c) No trading stamp company shall distribute trading stamps in this state or shall redeem trading stamps issued after October 1, 1959, therein until it has, on or before January first annually, paid to the Secretary of the State a license fee of one per cent of the principal sum of the bond required to be filed under subdivision (2) of this subsection and has filed with said secretary: (1) A statement of registration accompanied by representative samples of its stamps, stamp collection books, stamp redemption catalogs and stamp distribution and redemption agreement forms, currently used in this state. Each such statement shall provide the following information: (A) The name and principal address of the company; (B) the state of its incorporation or origin; (C) the names and addresses of its principal officers, partners or proprietors; (D) the address of its principal office in this state; (E) the name and address of its principal officer, employee or agent therein; (F) the addresses of the places where its stamps are redeemable therein; (G) a short form of its balance sheet as of the end of its last fiscal year prior to such filing, certified by an independent public accountant; and (H) unless the principal sum of the bond required by subdivision (2) of this subsection to be filed by the company is the maximum amount required under subsection (d), a statement of its gross income from its business in this state as a trading stamp company during such last fiscal year, certified by an independent public accountant; and (2) a bond payable to this state and executed by the company and a corporate surety qualified to do business in this state, which is conditioned upon the performance by the company of its obligation to redeem trading stamps issued by retailers in this state, when they are presented for redemption by the rightful holders. Each trading stamp company shall notify the Secretary of the State of any change in the addresses of the places where its stamps are redeemable in this state within ten days of any such change. If the company defaults in performing such obligations, all rightful holders of trading stamps of such company, including retailers in possession of such stamps for issuance to customers, shall be entitled to make claim against said bond. Any such holder may, within three months after such default, file a complaint with the Secretary of the State, who shall forthwith make a determination whether there has been a default. If said secretary determines that there has been such a default, he shall give notice of such determination to the company and, if such default is not corrected within ten days, he shall publish notice of such default in three consecutive publications of one or more newspapers having general circulation throughout this state and therein require that proof of all claims for redemption of the trading stamps of such company be filed with him, together with the trading stamps upon which the claim is based, within three months after the date of the first such publication. Said secretary promptly after the expiration of such period shall determine the validity of all claims so filed. Thereupon said secretary shall be paid by the surety such amount, not exceeding in the aggregate the principal sum of the bond, as is necessary to satisfy all valid claims so filed together with reasonable administrative expenses incident to the determination and payment of such claims. Said secretary shall promptly thereafter make an equitable distribution of the proceeds of the bond, less such reasonable administrative expenses, to such claimants and shall destroy the trading stamps so surrendered. If the amount paid by the surety is not sufficient to satisfy in full all valid claims and administrative expenses, the secretary may bring an action in a court of competent jurisdiction against the trading stamp company to recover, on behalf of the claimants, the difference between the aggregate value of such claims, including such administrative expenses, and the amount paid by the surety.

(d) The principal sum of the bond to be filed shall be as follows: If the company has not previously done business as a trading stamp company in this state, or if the company’s gross income from such business in this state during its last fiscal year was not in excess of two hundred and fifty thousand dollars, thirty-five thousand dollars; if such gross income exceeded two hundred and fifty thousand dollars but did not exceed five hundred thousand dollars, fifty thousand dollars; if such gross income exceeded five hundred thousand dollars but was not in excess of seven hundred and fifty thousand dollars, seventy-five thousand dollars; and if such gross income exceeded seven hundred and fifty thousand dollars, one hundred thousand dollars. On the effective date of each new bond, any and all liability on all bonds previously filed under the provision of subsection (c) shall terminate, and all rightful holders of trading stamps who prosecute their claims under said subsection shall prosecute such claims solely against the new bond and only by filing proofs of claim with the Secretary of the State in the manner provided in said subsection.

(e) No trading stamp company shall cease or suspend the redemption of trading stamps in this state without filing with the Secretary of the State at least ninety days’ prior written notice of its intention so to do and concurrently mailing a copy of such notice to each retailer within this state which has at any time theretofore within one year issued trading stamps which the company is obligated to redeem.

(f) Notwithstanding the provisions of subsection (b), a trading stamp company may redeem trading stamps if issued within the state prior to October 1, 1959, notwithstanding the fact that any such trading stamp does not have legibly printed upon its face in cents or any fraction thereof a cash value as determined by such trading stamp company.

(g) No person shall issue to his customers in connection with the sale of merchandise any trading stamp, coupon or similar device which has previously been issued in such connection by any other person responsible for the redemption thereof, unless the consent of the latter has been first obtained.

(h) The Secretary of the State shall investigate compliance with this section and shall notify the Attorney General of any violations of which he may have knowledge. Any trading stamp company which violates any provision of this section shall be fined not more than one thousand dollars, and the Superior Court shall have jurisdiction in equity on the complaint of any interested person to restrain and enjoin the violation of any of said provisions.

(1959, P.A. 528, S. 1–8; 1961, P.A. 320; 1967, P.A. 640; 747; P.A. 95-79, S. 160, 189.)

History: 1961 act amended Subsec. (c) re payment of administrative expenses from bond proceeds and added provision re court action against trading stamp company to recover claims not paid by surety; 1967 acts raised bond for companies which have not previously done business in state or which had gross income of $250,000 or less from $25,000 to $35,000 in Subsec. (d), required that trading stamp company notify secretary of the state of change in address of any redemption location within ten days in Subsec. (c) and added provision in Subsec. (h) re secretary of the state’s duty to investigate compliance and notify attorney general of violations; P.A. 95-79 amended Subsec. (a) to redefine “person” to include a limited liability company, effective May 31, 1995.

Cited. 153 C. 213.

Sec. 42-126b. Unsolicited sending of goods. Cancellation of trial offers and introductory rate offers. Automatic renewals. Unfair trade practices. (a) No person, firm, partnership, association or corporation, or agent or employee thereof, shall, in any manner, or by any means, offer for sale goods, wares or merchandise, where the offer includes the voluntary and unsolicited sending of goods, wares or merchandise not actually ordered or requested by the recipient, either orally or in writing. The receipt of any such unsolicited goods, wares or merchandise shall for all purposes be deemed an unconditional gift to the recipient who may use or dispose of the same in any manner such recipient sees fit without any obligation on such recipient’s part to the sender.

(b) Any person, firm, partnership, association or corporation that sells or offers to sell any products or services used primarily for personal, family or household purposes pursuant to a trial offer or at an introductory rate that will change at the end of the introductory rate period, shall provide the recipient of such products or services with clear and conspicuous written notice that the recipient may cancel such products or services upon the expiration of such trial offer or introductory rate period. Such notice shall include the procedure for such cancellation and shall be provided with any written promotional material for such products or services furnished to the recipient before the start of the trial offer or the introductory rate period or with the initial delivery of such products or services to the recipient. Any such products or services furnished to the recipient after the expiration of such trial offer or introductory rate period, where such trial offer or introductory rate period is cancelled or not otherwise renewed or continued by the recipient, shall be deemed an unconditional gift under subsection (a) of this section. The provisions of this subsection shall not apply to (1) any trial offer or introductory rate period provided by a public service company, as defined in section 16-1, an affiliate or subsidiary of such public service company, or any certified telecommunications provider, as defined in section 16-1, to any consumer with whom such public service company, affiliate or subsidiary, or certified telecommunications provider has an established and ongoing business relationship, provided such public service company, affiliate or subsidiary, or certified telecommunications provider shall inform such consumer of the procedure to cancel such trial offer or to cancel after the expiration of the introductory rate period, (2) any transaction involving the use of a negative option plan that is governed by 16 CFR Part 425, (3) any contract subject to the provisions of sections 36a-675 to 36a-685, inclusive, and (4) any introductory rate where the rate paid by the consumer after the end of the introductory rate period has been clearly and conspicuously disclosed to the consumer in the contract.

(c) (1) Any person, firm, partnership, association or corporation that sells or offers to sell any products or services used primarily for personal, family or household purposes for a specified period of time of more than one hundred eighty days pursuant to a written contract that contains a provision for automatic renewal of the contract for a period of time of more than thirty-one days at the end of the period of time specified in the contract shall provide the recipient of such products or services with a clear and conspicuous written notice that the recipient may cancel such contract. Such notice shall include the procedure for such cancellation. Such notice shall be given at least fifteen days but not more than sixty days prior to: (A) The date upon which the contract will be renewed, or (B) the expiration of the time period for cancellation by the recipient, whichever time period is earlier. Mailing of the written notice required by this subdivision by United States mail to the address of the recipient listed in the contract shall satisfy the notice requirements of this subdivision. If a contract subject to the provisions of this subsection is entered into electronically or the consumer agrees to receive notice electronically, the written notice required by this subsection may be transmitted by electronic mail.

(2) Any person, firm, partnership, association or corporation that sells or offers to sell any products or services used primarily for personal, family or household purposes for a specified period of time of one hundred eighty days or less pursuant to a written contract that contains a provision for automatic renewal of the contract for a period of time of more than thirty-one days at the end of the period of time specified in the contract, shall include in such contract a clear and conspicuous written notice that the recipient of such products or services may cancel such contract and the procedure for such cancellation, provided the recipient shall not be required to exercise such right of cancellation more than sixty days prior to the expiration of the specified period of time.

(3) If such notice is not provided to the recipient in accordance with subdivision (1) of this subsection or included in the contract in accordance with subdivision (2) of this subsection, as the case may be, any such products or services furnished to the recipient after the expiration of the period of time specified in the contract shall be deemed an unconditional gift under subsection (a) of this section.

(4) Nothing in this subsection shall be construed to apply to a health club contract subject to the provisions of section 21a-219, a contract subject to the provisions of sections 36a-675 to 36a-685, inclusive, or any contract between a condominium or housing association and a person other than an individual.

(d) The provisions of this section shall not apply to any banking, insurance or securities product or service, the provision of which is subject to regulation or licensing by the state or a federal agency.

(e) A violation of any provision of this section shall be deemed an unfair or deceptive trade practice under subsection (a) of section 42-110b.

(1969, P.A. 13; P.A. 98-109, S. 1; P.A. 99-286, S. 16, 19; P.A. 04-207, S. 1; P.A. 07-215, S. 2.)

History: Sec. 42-126b was first published as 42-133a in the 1969 Supplement to the General Statutes of Connecticut; P.A. 98-109 designated existing provisions as Subsec. (a), added new Subsec. (b) re trial offers and new Subsec. (c) re unfair trade practice; P.A. 99-286 amended Subsec. (b) by changing reference to person, firm or corporation certified to provide intrastate telecommunications services to certified telecommunications provider and by making conforming technical changes, effective July 19, 1999; P.A. 04-207 made technical changes in Subsec. (a) for purposes of gender neutrality, amended Subsec. (b) to provide that the products or services are used primarily for personal, family or household use, and to add reference to introductory rate, amended Subsec. (b)(1) by adding “or to cancel after the expiration of the introductory rate period”, added Subsec. (b)(3) excluding from applicability of Subsec. any contract subject to the provisions of Secs. 36a-675 to 35a-685, inclusive, and added Subsec. (b)(4) excluding from applicability of Subsec. any introductory rate where the rate after the end of the introductory period has been clearly and conspicuously disclosed to the consumer, added new Subsec. (c) concerning the automatic renewal of contracts for products or services used primarily for personal, family or household purposes, excluding in Subsec. (c)(4) health club contracts subject to Sec. 21a-219, contracts subject to Secs. 36a-675 to 36a-685, inclusive, or contracts between condominium or housing associations and a person other than an individual, added new Subsec. (d) excluding from applicability of Sec. banking, insurance or securities products or services subject to regulation or licensing by the state or federal agency, and relettered former Subsec. (c) as Subsec. (e); P.A. 07-215 replaced “the end of such specified period of time” with provisions re notice requirements and electronic contracts in Subsec. (c)(1).

Cited under original public act number. 158 C. 543.

Sec. 42-126c. Disclosure requirements for mail order businesses in advertising or promotional materials. Each person or business entity conducting a mail order or catalog business in or from this state or advertising a Connecticut mailing address shall disclose the legal name of such person or entity and the complete street address of the location from which such business is actually conducted in all of its advertising or promotional materials. Failure to comply with the provisions of this section shall be deemed to be an unfair or deceptive trade practice under subsection (a) of section 42-110b. The provisions of this section shall not apply to a mail order book or record business and the provision of this section requiring disclosure of the complete street address of the location from which business is conducted shall not apply to a business which is located in Connecticut and which is registered with the Secretary of the State under any applicable provision of law.

(P.A. 82-418, S. 1, 4; P.A. 83-158, S. 1.)

History: P.A. 83-158 amended section to exempt businesses located in Connecticut and registered with the secretary of the state from required disclosure of street address.

Cited. 231 C. 707.

Secs. 42-127 and 42-127a. Transferred to Chapter 669, Part XII, Secs. 36a-800 and 36a-801.

Sec. 42-127b. Licensing of persons in business on October 1, 1971. Section 42-127b is repealed, effective January 1, 1995.

(1971, P.A. 539, S. 13; P.A. 94-122, S. 339, 340.)

Sec. 42-128. Bond required. Section 42-128 is repealed.

(1953, S. 3311d; 1971, P.A. 539, S. 14.)

Secs. 42-128a to 42-129a. Transferred to Chapter 669, Part XII, Secs. 36a-802 to 36a-804, inclusive.

Sec. 42-130. Use of terms. Section 42-130 is repealed.

(1953, S. 3313d; 1971, P.A. 539, S. 14.)

Secs. 42-131 to 42-131d. Transferred to Chapter 669, Part XII, Secs. 36a-805 to 36a-809, inclusive.

Secs. 42-132 and 42-133. Application in case of pretended purchase or assignment. Penalty. Sections 42-132 and 42-133 are repealed.

(1953, S. 3315d, 3316d; 1961, P.A. 517, S. 78; 1971, P.A. 539, S. 14.)

Sec. 42-133a. Transferred to Chapter 669, Part XII, Sec. 36a-810.

Sec. 42-133b. Forfeiture of consumer credit charges on failure to respond to debtor’s inquiry. Liability for damages if amount in error. Section 42-133b is repealed.

(1971, P.A. 774; P.A. 73-384, S. 1; P.A. 76-169, S. 16.)

Sec. 42-133c. Finance charge applied by retail sellers on open-end credit plans. (a) Except as provided in subsection (b) of this section, notwithstanding any contrary provision of law, a retail seller under an open-end credit plan, as defined in subdivision (8) of subsection (a) of section 36a-676, in connection with a transaction arising out of the retail sale of consumer goods or services on sales made on or after October 1, 1993, may contract for and, if so contracted for, the retail seller or holder may charge and collect a finance charge under the plan and may calculate such finance charge in the manner and at the rate or rates agreed to by the retail buyer. For purposes of this section, (1) “retail seller” means a person who (A) sells or agrees to sell one or more articles of goods or furnishes services under an open-end credit plan and (B) is the creditor to whom the debt is initially payable on the face of the agreement of indebtedness, and (2) “holder” means a finance agency or other assignee who has purchased the open-end credit plan agreement or obligation. Regardless of any agreement to the contrary, a transaction under an open-end credit plan is subject to this section whenever a solicitation for the extension of credit is made by a retail seller whose primary activity in Connecticut is soliciting Connecticut customers through the mails, and such solicitation originates outside Connecticut but is directed to and received by a customer who resides, and responds to such solicitation, in Connecticut.

(b) The maximum finance charge which may be applied by a retail seller under an open-end credit plan used in connection with a transaction arising out of the retail sale of motor fuel, as defined in section 14-327a, shall not exceed one and one-half per cent per month on the average daily balance of the account or the unpaid balance outstanding as of the end of the current billing cycle.

(1972, P.A. 40, S. 1; P.A. 77-391, S. 2; P.A. 79-127; P.A. 80-69, S. 1, 3; 80-483, S. 115, 186; P.A. 81-362, S. 3, 4; P.A. 82-105, S. 1, 3; P.A. 83-226, S. 1, 3; P.A. 85-522, S. 2; 85-613, S. 117, 154; P.A. 86-216, S. 2, 3; P.A. 87-589, S. 81, 87; P.A. 89-37; P.A. 90-18, S. 1, 2; P.A. 92-12, S. 106; P.A. 93-400; P.A. 95-106.)

History: P.A. 77-391 raised maximum finance charge from 1% per month “on the average daily balance of the account or that part of the outstanding unpaid balance as of the end of the billing cycle” to 1.25% per month “on that part of the average daily balance of the account or unpaid balance outstanding as of the end of the current billing cycle” which does not exceed $250, retaining 1% rate on larger balances, and in exception substituted “state bank and trust company” for “bank or trust company” and included savings banks and buildings or savings and loan associations; P.A. 79-127 specified applicability of section to transactions under open-end credit plans; P.A. 80-69 established maximum finance charge at 1.25% without exception, deleting provisions re charge on amounts over $250 and re plans operated by various banking institutions; P.A. 80-483 would have referred to savings and loan associations rather than “building or” savings and loan associations in deleted provision re finance charge on plans operated by various banking institutions; P.A. 81-362 increased the maximum finance charge to 1.5% per month on sales made on or after July 1, 1981, and prior to March 1, 1983; P.A. 82-105 extended from March 1, 1983, to October 1, 1983, the expiration date for the increase in finance charges enacted in 1981; P.A. 83-226 extended the sunset date for the current statutory interest rate for open-end credit plans from October 1, 1983, to October 1, 1985; P.A. 85-522 extended the sunset date for the current maximum finance charge for open-end credit plans from October 1, 1985, to October 1, 1987; P.A. 85-613 made technical changes; P.A. 86-216 lowered the maximum interest rate on credit card purchases from 18% to 15% annually, reducing monthly rate from 1.5% to 1.25%; P.A. 87-589 amended the section by adding new Subsecs. (b) and (c) re application of the finance charge ceiling to certain out-of-state financial institutions; P.A. 89-37 added provisions concerning retail sellers; P.A. 90-18 made the provisions of this section applicable only to finance charges applied by retail sellers under open-end credit plans in connection with retail sales of consumer goods or services, and deleted Subsecs. (b) and (c); P.A. 92-12 made a technical change; P.A. 93-400 designated existing provisions as Subsec. (a) and replaced existing ceiling on finance charges with new provisions and defined “holder”, and added Subsec. (b) re the maximum finance charge applied by a retail seller under an open-end credit plan used in connection with a transaction arising out of the retail sale of motor fuel; P.A. 95-106 deleted the specified maximum finance charge that would have become effective on October 1, 1995.

Sec. 42-133d. Annual statement of interest imposed and paid under open-end credit plan. The creditor of any account under an open-end credit plan, as defined in subdivision (8) of subsection (a) of section 36a-676, on which interest aggregating ten dollars or more has been imposed in any calendar year, shall furnish to the obligor of such account, on or before January thirty-first of the following year, a statement of the interest charges so imposed and the aggregate amount paid by such obligor.

(1972, P.A. 17, S. 1; P.A. 73-362, S. 1, 2; P.A. 88-65, S. 57; P.A. 92-12, S. 107.)

History: P.A. 73-362 added Subsec. (b); P.A. 88-65 deleted obsolete Subsec. (b) which provided that the first statement of interest was due on January 31, 1974; P.A. 92-12 made a technical change.

Sec. 42-133e. Franchises: Definitions. As used in sections 42-133e to 42-133g, inclusive:

(a) “Person” means a natural person, corporation, limited liability company, partnership or other entity and, in case of an entity, includes any other entity which has a majority interest in such entity or effectively controls such other entity as well as the individual officers, directors and other persons in active control of the activities of such entity;

(b) “Franchise” means an oral or written agreement or arrangement in which (1) a franchisee is granted the right to engage in the business of offering, selling or distributing goods or services under a marketing plan or system prescribed in substantial part by a franchisor, provided nothing contained herein shall be deemed to create a franchisor-franchisee relationship between the grantor and grantee of a lease, license or concession to sell goods or services upon or appurtenant to the premises of the grantor, which premises are occupied by the grantor primarily for its own independent merchandising activities; and (2) the operation of the franchisee’s business pursuant to such plan or system is substantially associated with the franchisor’s trademark, service mark, trade name, logotype, advertising or other commercial symbol designating the franchisor or its affiliate, and includes any agreement between a manufacturer, refiner or producer and a distributor, wholesaler or jobber, between a manufacturer, refiner or producer and a retailer, or between a distributor, wholesaler or jobber and a retailer;

(c) “Franchisor” means a person who grants a franchise to another person, including a manufacturer, refiner or producer or a distributor, wholesaler or jobber who grants to a distributor, wholesaler or jobber or retailer, as the case may be, the authority to use a trademark, tradename, service mark or other identifying symbol or name under a franchise;

(d) “Franchisee” means a person to whom a franchise is granted, including a distributor, wholesaler or jobber or retailer who is granted the authority under a franchise to use a trademark, tradename, service mark or other identifying symbol or name.

(1972, P.A. 287, S. 1; P.A. 73-500, S. 1; P.A. 75-560, S. 1; P.A. 95-79, S. 161, 189.)

History: P.A. 73-500 redefined “franchise” to delete reference to agreements or arrangements “for a definite or indefinite period”; P.A. 75-560 redefined “franchise”, “franchisor” and “franchisee” to include specific references to manufacturers, refiners, producers, distributors, wholesalers, jobbers and retailers; P.A. 95-79 redefined “person” to include a limited liability company, effective May 31, 1995.

See Sec. 42-133h re applicability of sections.

Cited. 179 C. 471.

Cited. 1 CA 439.

Subsec. (b):

Since plaintiff’s business was not “substantially associated” with a trademark of defendant no franchise arrangement existed under pre-1975 statute. 180 C. 720. Parties’ actions, in addition to terms of written agreement, held to constitute an agreement or arrangement for purposes of determining whether a franchise exists. 250 C. 334. “Substantial” association of franchisee with franchisor for purposes of this section does not mean exclusive or complete association. Id.

Cited. 38 CS 495.

Subsec. (c):

Defendant, a wholesaler, distributor and jobber of gasoline and petroleum products, was not a franchisor under pre-1975 statute since plaintiff’s business was not “substantially associated” with a trademark of defendant. 180 C. 720.

Subsec. (d):

Cited. 180 C. 720.

Sec. 42-133f. Termination, or cancellation of, or failure to renew a franchise. (a) No franchisor shall, directly, or through any officer, agent or employee, terminate, cancel or fail to renew a franchise, except for good cause which shall include, but not be limited to the franchisee’s refusal or failure to comply substantially with any material and reasonable obligation of the franchise agreement or for the reasons stated in subsection (e) of this section. The franchisor shall give the franchisee written notice of such termination, cancellation or intent not to renew, at least sixty days in advance to such termination, cancellation or failure to renew with the cause stated thereon; provided, in the event the franchisor elects not to renew a franchise pursuant to subsection (e) of this section, the franchisor shall give the franchisee written notice of such intent not to renew at least six months prior to the expiration of the current franchise agreement. The provisions of this section shall not apply (1) where the alleged grounds are voluntary abandonment by the franchisee of the franchise relationship, in which event, such notice may be given thirty days in advance of such termination, cancellation or failure to renew, or (2) where the alleged grounds are the conviction of the franchisee in a court of competent jurisdiction of an offense punishable by a term of imprisonment in excess of one year and directly related to the business conducted pursuant to the franchise, in which event, such notice may be given at any time following such conviction and shall be effective upon delivery and written receipt of such notice.

(b) If the franchise which is the subject of a notice of termination, cancellation or failure to renew provided for in subsection (a) of this section is operated on premises leased by the franchisor to the franchisee under a lease which terminates upon termination of the franchise, and if the franchisor seeks to terminate the lease, the notice shall be served upon the franchisee by a state marshal or indifferent person and shall expressly state that said lease shall terminate upon termination of the franchise, and shall further state that the franchisee may have certain rights under sections 42-133f and 42-133g, which sections shall be reproduced and attached to the notice.

(c) Upon termination of any franchise the franchisee shall be allowed fair and reasonable compensation by the franchisor for the franchisee’s inventory, supplies, equipment and furnishings purchased by the franchisee from the franchisor or its approved sources under the terms of the franchise or any ancillary or collateral agreement; provided no compensation shall be allowed for personalized items which have no value to the franchisor.

(d) Notwithstanding the provisions of section 52-550, no franchise entered into or renewed on or after October 1, 1973, whether oral or written, shall be for a term of less than three years and for successive terms of not less than three years thereafter unless cancelled, terminated or not renewed pursuant to subsections (a) and (d) of this section.

(e) A franchisor may elect not to renew a franchise which involves the lease by the franchisor to the franchisee of real property and improvement, in the event the franchisor (1) sells or leases such real property and improvements to other than a subsidiary or affiliate of the franchisor for any use; or (2) sells or leases such real property to a subsidiary or affiliate of the franchisor, except such subsidiary or affiliate shall not use such real property for the operation of the same business of the franchisee; or (3) converts such real property and improvements to a use not covered by the franchise agreement; or (4) has leased such real property from a person not the franchisee and such lease from such person is terminated or not renewed.

(f) Any waiver of the rights of a franchisee under sections 42-133f or 42-133g which is contained in any franchise agreement entered into or amended on or after June 12, 1975, shall be void.

(1972, P.A. 287, S. 2; P.A. 73-500, S. 2; P.A. 74-292, S. 1, 3; P.A. 75-360, S. 1, 2; P.A. 85-493, S. 1; P.A. 86-238, S. 1; P.A. 00-99, S. 84, 154.)

History: P.A. 73-500 specified that termination, cancellation or failure to renew of franchise must be “for good cause”, required that notice contain statement of cause and that copy be filed with consumer protection commissioner in Subsec. (a), changing wording slightly, and added Subsecs. (c) and (d) re term of franchise and arbitration of question of “good cause”; P.A. 74-292 specifically included franchisee’s noncompliance with obligations of franchise agreement and nonrenewal as in Subsec. (d) (see below) as “good cause”, added proviso in notice requirement and deleted requirement that copy be sent to commissioner in Subsec. (a), made Subsec. (c) provisions applicable to renewals and replaced former Subsec. (d) provisions re arbitration with new provisions setting forth conditions for nonrenewal involving lease of real property; P.A. 75-360 added Subsec. (e); P.A. 85-493 eliminated a provision requiring a franchisor to compensate a franchisee for costs and expenses paid to the franchisor upon the termination of a franchise; P.A. 86-238 amended Subsec. (a) by allowing termination or cancellation with 30 days’ notice instead of 15 days’ in the case of voluntary abandonment of a franchise, and inserted a new Subsec. (b) which provided notice requirements for termination of a franchise which terminates upon the termination of a lease, relettering previously existing Subsecs. as necessary; P.A. 00-99 replaced reference to sheriff with state marshal in Subsec. (b), effective December 1, 2000.

See Sec. 42-133h re applicability of section.

Cited. 179 C. 471. Cited. 180 C. 720.

Cited. 1 CA 439.

Cited. 38 CS 495.

Subsec. (a):

In order to prove “good cause” under this section, franchisor has to show that franchisee either failed to or refused to comply substantially with a material and reasonable term of the franchise agreement, or that franchisor had an equivalent business reason of a similar nature. 250 C. 334.

Sec. 42-133g. Action for violation. Right to occupy franchise premises where lease expires upon termination of franchise. Items filed with court by franchisor seeking possession of franchise premises. (a) Any franchisee may bring an action for violation of sections 42-133e to 42-133g, inclusive, in the Superior Court to recover damages sustained by reason of such violation, which action shall be privileged in respect to its assignment for trial and, where appropriate, may apply for injunctive relief as provided in chapter 916. Such franchisee, if successful, shall be entitled to costs, including, but not limited to, reasonable attorneys’ fees.

(b) A franchisee who leases real property under a franchise agreement, which lease expires upon termination of the franchise, and who receives notice from the franchisor in accordance with the provisions of subsections (a) and (b) of section 42-133f that such franchise is terminated, shall have no right or privilege to occupy the premises which are the subject of such lease, as of the date specified in such notice for the termination of such franchise, unless such franchisee is granted a temporary injunction in accordance with the provisions of chapter 916.

(c) A franchisor who applies to a court to obtain possession of premises leased by the franchisor to the franchisee upon termination of the franchise, which premises the franchisee has no right or privilege to occupy under subsection (b) of this section, shall file with the court from which it seeks the order of possession: (1) An affidavit under oath from the clerk of such court, which affidavit shall state that the court records indicate that no temporary injunction has been granted to the franchisee, (2) the return of service of the notice required pursuant to subsection (b) of this section, (3) a copy of the notice served pursuant to subsection (b) of this section, and (4) an affidavit under oath, which affidavit shall state that the notice required by subsections (a) and (b) of section 42-133f, has been served, that the notice period required by said section has expired, and that no injunction to restrain termination has been issued.

(1972, P.A. 287, S. 3; P.A. 75-560, S. 2; P.A. 86-238, S. 2.)

History: P.A. 75-560 granted actions to recover damages privileged status in respect to assignment for trial; P.A. 86-238 added Subsecs. (b) and (c) providing that a franchisee who receives valid notice of the termination of a franchise and whose lease expires along with the franchise, has no right or privilege to occupy the franchise property, and requiring the franchisor to file certain items with the court when applying for possession of such property.

See Sec. 42-133h re applicability of section.

Cited. 179 C. 471.

Cited. 1 CA 439.

Sec. 42-133h. Applicability of sections 42-133e to 42-133g, inclusive. Sections 42-133e to 42-133g, inclusive, shall take effect October 1, 1972, and shall apply only to franchise agreements entered into, renewed or amended on or after that date, the performance of which contemplates or requires the franchisee to establish or maintain a place of business in this state.

(1972, P.A. 287, S. 4; P.A. 85-493, S. 2.)

History: P.A. 85-493 provided that Secs. 42-133e to 42-133g, inclusive, apply to franchise agreements “the performance of which contemplates or requires the franchisee to establish or maintain a place of business in this state”.

Cited. 179 C. 471.

Cited. 1 CA 439.

Sec. 42-133i. Notice of expiration date of magazine subscription. Magazine subscription offer in the form of an invoice or bill. Unfair trade practice. (a) Any publisher, distributor, dealer or seller of magazines on a subscription basis in this state shall include (1) on the mailing label and (2) in any notice to renew given to a subscription holder, the expiration date of the current subscription.

(b) Any publisher, distributor, dealer or seller of magazines on a subscription basis that mails or otherwise furnishes to any consumer in this state any written offer or solicitation for the sale of a magazine subscription, where such written offer or solicitation purports to be an invoice or a bill and is received by the consumer at any time prior to acceptance of such subscription by the consumer, shall include in such written offer or solicitation clear and conspicuous language indicating that such written offer or solicitation is not an invoice or a bill.

(c) A violation of any provision of this section shall be deemed an unfair or deceptive trade practice under subsection (a) of section 42-110b.

(P.A. 73-398; P.A. 98-109, S. 2.)

History: P.A. 98-109 designated existing provisions as Subsec. (a), deleted fine provision and made a technical change, added new Subsec. (b) re magazine subscription offers in the form of an invoice or bill, and added new Subsec. (c) re unfair trade practice.

Sec. 42-133j. Legislative finding concerning petroleum product franchises. (a) The legislature of the state of Connecticut finds and declares that the distribution and sales of gasoline and petroleum products through franchises within the state of Connecticut, including the rights and obligations of suppliers and dealers, vitally affects its general economy. In order to promote the public interest and public welfare, to avoid undue control of the dealer by suppliers, to foster and keep alive vigorous and healthy competition for the benefit of the public by prohibiting practices through which fair and honest competition is destroyed or prevented, to promote the public safety, to prevent deterioration of facilities for servicing motor vehicles on the highways of the state, to prevent dealers from unnecessarily going out of business thereby resulting in unemployment with loss of tax revenue to the state and its resultant undesirable consequences, and to offset evident abuses within the petroleum industry as a result of inequitable economic power, it is necessary to legislate standards pursuant to the exercise of the police power of this state governing the relationship between suppliers and distributors of gasoline and petroleum products and the dealers within the state who sell those products to the public.

(b) In recognition of the factors set forth in subsection (a) of this section, it is provided that all provisions of sections 42-133j to 42-133n, inclusive, to the extent permitted by law, shall be deemed effective as to those presently existing franchise agreements involving gasoline dealers within the state of Connecticut as of October 1, 1977.

(c) The legislature further finds and declares that the distribution and sales of motor vehicle fuels and oils in the state of Connecticut affects the general economy of the state, the public interest and the public welfare. Competition, freedom from unreasonable restraints on alienation and competitive pricing are essential to the functioning of a fair and efficient free market economy within the petroleum industry. The legislature finds and declares that existing petroleum franchise agreements as defined and regulated within sections 42-133e to 42-133h, inclusive, uniformly prohibit assignment of franchise interests without the consent of the franchisor, which consent may be unreasonably and arbitrarily withheld. Also, existing petroleum franchise agreements provide for their automatic termination upon the death of the franchisee. The legislature finds and declares that such provisions constitute unreasonable restraints on alienation and inhibit the fair and efficient functioning of a free market economy within the petroleum industry. Therefore, it is provided that the provisions of any franchise agreement which prohibit assignment without the consent of the franchisor and permit such consent to be unreasonably withheld are void and without effect as contrary to public policy. It is further provided that the provisions of any franchise agreement which terminate the franchise automatically upon the death of the franchisee are void and ineffective as contrary to public policy. The legislature finds and declares that provisions in certain existing petroleum franchise agreements prohibit gasoline retailers or distributors from offering a discount to a buyer based upon the method of payment by such buyer for gasoline. The legislature finds and declares that such provisions constitute unreasonable restraints on competitive pricing and inhibit the fair and efficient functioning of a free market economy within the petroleum industry. Therefore, it is provided that the provisions of any franchise agreement that prohibit gasoline retailers or distributors from offering a discount to a buyer based upon the method of payment by such buyer for gasoline are void and without effect as contrary to public policy.

(P.A. 77-493, S. 1; June 11 Sp. Sess. P.A. 08-2, S. 3.)

History: June 11 Sp. Sess. P.A. 08-2 amended Subsec. (c) to add “competitive pricing” re functioning of free market economy within petroleum industry and add legislative finding and declaration re petroleum franchise agreement provisions banning buyer discounts based on method of payment for gasoline, effective June 17, 2008.

Sec. 42-133k. Definitions. For the purposes of sections 42-133j to 42-133n, inclusive:

(1) “Franchise” means any contract (A) between a refiner and a distributor; (B) between a refiner and a retailer; (C) between a distributor and another distributor; or (D) between a distributor and a retailer, under which a refiner or distributor, as the case may be, authorizes or permits a retailer or distributor to use, in connection with the sale, consignment, or distribution of motor fuel, a trademark which is owned or controlled by such refiner or by a refiner which supplies motor fuel to the distributor which authorizes or permits such use.

(2) “Franchise” includes (A) any contract under which a retailer or distributor, as the case may be, is authorized or permitted to occupy leased marketing premises, which premises are to be employed in connection with the sale, consignment, or distribution of motor fuel under a trademark which is owned or controlled by such refiner or by a refiner which supplies motor fuel to the distributor which authorizes or permits such occupancy; (B) any contract pertaining to the supply of motor fuel which is to be sold, consigned or distributed (i) under a trademark owned or controlled by a refiner; or (ii) under a contract which has existed continuously since May 15, 1973, and pursuant to which, on May 15, 1973, motor fuel was sold, consigned or distributed under a trademark owned or controlled on such date by a refiner; and (iii) the unexpired portion of any franchise, as defined by the preceding provisions of this paragraph, which is transferred or assigned as authorized by the provisions of such franchise or by any applicable provision of state law which permits such transfer or assignment without regard to any provision of the franchise.

(3) “Franchise relationship” means the respective motor fuel marketing or distribution obligations and responsibilities of a franchisor and a franchisee which result from the marketing of motor fuel under a franchise.

(4) “Franchisor” means a refiner or distributor, as the case may be, who authorizes or permits, under a franchise, a retailer or distributor to use a trademark in connection with the sale, consignment, or distribution of motor fuel.

(5) “Franchisee” means a retailer or distributor, as the case may be, who is authorized or permitted, under a franchise, to use a trademark in connection with the sale, consignment, or distribution of motor fuel.

(P.A. 77-493, S. 2; P.A. 91-195.)

History: P.A. 91-195 replaced the previous definitions with the definitions in the Federal Petroleum Marketing Practices Act, 15 U.S.C. 2801.

Sec. 42-133l. Franchise agreements. Termination. Good cause. Notice required. Prohibited conduct. Terms. (a) No franchisor shall, directly, or through any officer, agent or employee, terminate, cancel or fail to renew a franchise, except for good cause shown which shall include, but not be limited to the franchisee’s refusal or failure to comply substantially with any material and reasonable obligation of the franchise agreement except such obligations under subsection (e) of this section or for the reasons stated in subsection (d) of this section. The franchisor shall give the franchisee written notice of such termination, cancellation or intent not to renew, at least sixty days in advance of such termination, cancellation or failure to renew with the cause stated thereon; provided, in the event the franchisor elects not to renew a franchise pursuant to subsection (d) of this section, the franchisor shall give the franchisee written notice of such intent not to renew at least six months prior to the expiration of the current franchise agreement. The provisions of this section shall not apply (1) where the alleged grounds are voluntary abandonment by the franchisee of the franchise relationship, in which event, such notice may be given fifteen days in advance of such termination, cancellation or failure to renew, or (2) where the alleged grounds are the conviction of the franchisee in a court of competent jurisdiction of an offense punishable by a term of imprisonment in excess of one year and directly related to the business conducted pursuant to the franchise, in which event, such notice may be given at any time following such conviction and shall be effective upon delivery and written receipt of such notice, subject to the requirements of subdivision (10) of subsection (f) of this section.

(b) Upon termination of any franchise for whatever cause or reason, except voluntary relinquishment or abandonment of the franchise by the franchisee, the franchisor shall fairly compensate the franchisee or the franchisee’s estate for the fair market value, at the time of termination of the franchise, of the franchisee’s inventory, supplies, equipment and furnishings purchased by the franchisee from the franchisor or its approved sources and good will, if any, exclusive of personalized items which have no value to the franchisor and inventory, supplies, equipment and furnishings not reasonably required in the conduct of the franchise business; provided that compensation need not be made to a franchisee for good will if (1) the franchisee has been given one year’s notice of nonrenewal, and (2) the franchisor agrees in writing not to enforce any covenant which restrains the franchisee from competing with the franchisor, and provided further, that a franchisor may offset against amounts owed to a franchisee under this subsection any amount owed by such franchisee to the franchisor.

(c) Notwithstanding the provisions of section 52-550, no franchise entered into or renewed on or after October 1, 1973, whether oral or written, shall be for a term of less than three years and for successive terms of not less than three years thereafter unless cancelled, terminated or not renewed pursuant to subsections (a) and (d) of this section.

(d) A franchisor may elect not to renew a franchise which involves the lease by the franchisor to the franchisee of real property and improvement, in the event the franchisor (1) sells or leases such real property and improvements to other than a subsidiary or affiliate of the franchisor for any use; or (2) sells or leases such real property to a subsidiary or affiliate of the franchisor, except such subsidiary or affiliate shall not use such real property for the operation of the same business of the franchisee; or (3) converts such real property and improvements to a use not covered by the franchise agreement; or (4) has leased such real property from a person not the franchisee and such lease from such person is terminated or not renewed.

(e) No franchisor shall terminate, cancel or fail to renew a franchise for the failure or refusal of the franchisee to do any of the following: (1) Refusal to take part in promotional campaigns of the franchisor’s products; (2) failure to meet sales quotas suggested by the franchisor; (3) refusal to sell any product at a price suggested by the franchisor or supplier; (4) refusal to keep the premises open and operating during those hours which are documented by the franchisee to be unprofitable to the franchisee or to preclude the franchisee from establishing the franchisee’s own hours of operation beyond the hour of ten o’clock p.m. and prior to six o’clock a.m.; (5) refusal to give the franchisor or supplier financial records of the operation of the franchise which are not related or necessary to the franchisee’s obligations under the franchise agreement. Subdivisions (1) to (5), inclusive, of this subsection shall not be deemed material and reasonable obligations, substantial failure to comply with franchise terms, or good cause under subsection (a) of this section.

(f) No franchisor, directly or indirectly, through any officer, agent or employee, shall do any of the following: (1) Require a franchisee at the time of entering into an agreement to assent to a release, assignment, novation, waiver, or estoppel which would relieve any person from liability imposed by sections 42-133j to 42-133n, inclusive; (2) prohibit, directly or indirectly, the right of free association among franchisees for any lawful purpose; (3) prohibit the transfer by will of any franchise and the rights of any franchisee under any franchise agreement to a spouse or child of such franchisee; (4) require or prohibit any change in management of any franchise unless such requirement or prohibition of such change shall be for good cause, which cause shall be stated in writing by the franchisor; (5) impose unreasonable standards of performance upon a franchisee; (6) fail to deal in good faith with a franchisee; (7) sell, rent or offer to sell to a franchisee any product or service for more than a fair and reasonable price; (8) impose on a franchisee by contract, rule or regulation, whether written or oral, any standard of conduct unless the franchisor, his agents or representatives sustain the burden of proving such to be reasonable and necessary; (9) discriminate between franchisees in the charges offered or made for royalties, goods, services, equipment, rentals, advertising services, or in any other business dealing, unless (A) any such type of discrimination between franchisees would be necessary to allow a particular franchisee to fairly meet competition in the open market, or (B) to the extent that the franchisor satisfies the burden of proving that any classification of or discrimination between franchisees is reasonable, is based on franchises granted at materially different times and such discrimination is reasonably related to such difference in time or on other proper and justifiable distinctions considering the purposes of sections 42-133j to 42-133n, inclusive, and is not arbitrary; (10) notify the franchisee of a claimed breach of franchise agreement for good cause later than one hundred eighty days from the date said good cause arises or one hundred eighty days after the franchisor knew or in the exercise of reasonable care should have known of said claimed good cause; or (11) require or coerce a gasoline franchisee to sell gasoline at a specific price or in a specific price range.

(g) Any franchisee or franchisor, upon request, shall have the right to have the question of good cause submitted to arbitration in accordance with the rules of the American Arbitration Association. Any franchisee or franchisor, upon the rendering of a decision in arbitration, shall have the right to apply to the superior court in the county wherein such franchisee or franchisor is doing business or resides for confirmation, modification, correction or vacation of any arbitration decision.

(h) Every franchisor shall protect and save harmless its franchisee from financial loss and expense, including legal fees and costs, if any, arising out of any claim, demand, suit or judgment by reason of defect in merchandise or methods or procedures prescribed by the franchisor and performed by such franchisee, except for alleged negligence or wilful misconduct of such franchisee.

(i) Every franchisor shall reimburse its franchisee at the prevailing retail price for any services rendered or parts supplied by such franchisee in satisfaction of any warranty issued by such franchisor, and no franchisor shall restrict a franchisee from rendering services or providing parts in accordance with standards of good workmanship in satisfaction of any such warranty.

(j) Any waiver of the rights of a franchisee under sections 42-133m, 42-133n and this section which is contained in any franchise agreement entered into or amended on or after October 1, 1977, shall be void.

(P.A. 77-493, S. 3; June Sp. Sess. P.A. 98-1, S. 70, 121; P.A. 04-70, S. 1; P.A. 06-196, S. 167.)

History: (Revisor’s note: In 1995 the Revisors editorially changed the numeric indicators (1) and (2) in Subsec. (f)(9) to (A) and (B) respectively for consistency with statutory usage); June Sp. Sess. P.A. 98-1 made a technical change in Subsec. (f), effective June 24, 1998; P.A. 04-70 amended Subsec. (f) by deleting a provision that “nothing under this subsection shall be construed as granting a franchisor a right that may be limited by any other state or federal statute”, and by adding Subdiv. (11) prohibiting the requirement or coercion of a gasoline franchisee to sell gasoline at a specific price or price range; P.A. 06-196 made technical changes in Subsec. (e), effective June 7, 2006.

Cited. 38 CS 495.

Sec. 42-133m. Assignment of franchise. Automatic termination. (a) A term in any franchise agreement between a franchisor and a franchisee which prohibits the voluntary assignment of the franchise to which they are parties, or which requires the franchisor’s consent to such assignment, is ineffective and void as contrary to public policy unless such term provides that consent may be or is reasonably withheld. Reasonable withholding of consent includes, but is not limited to: (1) Material and substantial change of the other party’s duties; (2) material and substantial increase of the other party’s contractual burden of risk; (3) material and substantial impairment of the other party’s opportunity to obtain return performance.

(b) A term in any franchise agreement between a franchisor and franchisee which provides for the termination of the franchise to which they are parties upon the death of the franchisee is ineffective and void as contrary to public policy. If the franchisee at the time of death held an interest in a franchise, such interest may be passed by will or by intestacy to his spouse or child, or may be disposed of by his estate. The right of first refusal of such sale shall be granted to the franchisor. In the event of such disposition and for the purpose of avoiding or preventing such disposition, the franchisor shall be required to show that said disposition will materially and substantially prejudice such franchisor’s rights under the terms of the then existing franchise agreement, as set forth in subsection (a) of this section.

(P.A. 77-493, S. 4.)

Sec. 42-133n. Remedies. Effect of judgment. Limitation of actions. (a) Any franchisee may bring an action for violation of sections 42-133l or 42-133m in the Superior Court to recover damages sustained by reason of such violation, which action shall be privileged in respect to its assignment for trial and, where appropriate, may apply for injunctive relief as provided in chapter 916. Such franchisee, if successful, shall be entitled to costs, including, but not limited to, reasonable attorneys’ fees.

(b) A final judgment, order or decree heretofore or hereafter rendered against a franchisor, in any civil, criminal or administrative proceeding under any federal or state act relating to antitrust laws or to franchising, or sections 42-133j to 42-133n, inclusive, shall be regarded as and may be introduced as evidence against such franchisor in any action brought by any party against such franchisor under subsection (a) of this section.

(c) The pendency of any civil, criminal or administrative proceeding against a franchisor, its agents or representatives, brought by federal or state authorities or any of their respective agencies under any federal or state act relating to antitrust laws or to franchising, or under section 42-133l or 42-133m, shall toll the limitation of any civil action brought under sections 42-133j to 42-133n, inclusive, if the action hereunder is then instituted within one year after the final judgment or order in such proceedings, provided such limitation of actions shall in any case toll the law as long as there is actual concealment on the part of any franchisor, its agents or representatives.

(P.A. 77-493, S. 5; P.A. 06-196, S. 270.)

History: P.A. 06-196 made technical changes in Subsec. (c), effective June 7, 2006.

Secs. 42-133o and 42-133p. Reserved for future use.

Sec. 42-133q. Motor homes dealer, manufacturer or distributor: Applicable provisions of Secs. 42-133r to 42-133ee. With respect to a dealer, manufacturer or distributor, as defined in section 42-133r, of motor homes, as defined in section 14-1, the provisions of sections 42-133r to 42-133ee, inclusive, applicable to any such dealer, manufacturer or distributor shall be the provisions of said sections 42-133r to 42-133ee, inclusive, in effect on January 1, 2009.

(P.A. 09-187, S. 61.)

History: P.A. 09-187 effective July 8, 2009.

Sec. 42-133r. Definitions. As used in sections 42-133r to 42-133ee, inclusive, unless the context indicates a different meaning:

(1) “Manufacturer” means any person who manufactures or assembles new motor vehicles, or imports motor vehicles for distribution to dealers or through distributors, or factory branches.

(2) “Distributor” means any person who offers for sale, sells or distributes any new motor vehicle to dealers or who maintains factory representatives or who controls any person, firm, association, joint venture corporation or trust, who offers for sale, sells or distributes any new motor vehicle to dealers.

(3) “Factory branch” means a branch office maintained by a manufacturer for the purpose of selling, or offering for sale, motor vehicles to a distributor or dealer, or for directing or supervising factory or distributor representatives.

(4) “Owner” means any person holding an ownership interest in a business entity operating as a dealer or under a franchise as defined in this section either as a corporation, partnership or sole proprietorship. To the extent that the rights of any owner under sections 42-133r to 42-133ee, inclusive, conflict with the rights of any other owner, such rights shall accrue in priority order based on the percentage of ownership interest held by each owner with the owner having the greatest ownership interest having first priority and succeeding priority accruing to other owners in the descending order of their percentage of ownership interest.

(5) “Dealership facilities” means real estate, buildings, fixtures and improvements which are used in the course of business under a franchise by a new motor vehicle dealer.

(6) “Dealer” means any person engaged in the business of selling, offering to sell, soliciting or advertising the sale of new motor vehicles and who holds a valid sales and service agreement, franchise or contract, granted by a manufacturer or distributor for the retail sale of the manufacturer’s or distributor’s new motor vehicles.

(7) “Motor vehicle” means a self-propelled vehicle intended primarily for use and operation on the public highways, other than a farm tractor or other machinery or tools used in the production, harvesting and care of farm products.

(8) “New motor vehicle” means a motor vehicle which has been sold to a new motor vehicle dealer and which has not been used for other than demonstration purposes and on which the original title has not been issued from the new motor vehicle dealer.

(9) “Established place of business” means a permanent, commercial building easily accessible and open to the public at reasonable times and at which the business of a new motor vehicle dealer, including the display and repair of vehicles, may be lawfully carried on.

(10) “Franchise” means a written agreement or contract between a manufacturer or distributor and a dealer which purports to fix the legal rights and liabilities of the parties to such agreement or contract, and pursuant to which the dealer purchases and resells the franchise product or leases or rents the dealership premises.

(11) “Good faith” means honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade.

(12) “Designated family member” means the spouse, child, grandchild, parent, brother or sister of an owner who, in the case of the owner’s death, is entitled to inherit the ownership interest in the dealer under the terms of the owner’s will, or who has been nominated in any other written instrument, or who, in the case of an incapacitated owner of a dealer, has been appointed by a court as the legal representative of the dealer’s property.

(13) “Person” means a natural person, partnership, corporation, limited liability company, association, trust, estate or any other legal entity.

(14) “Relevant market area” means the area within a radius of fourteen miles around an existing dealer or the area of responsibility defined in a franchise, whichever is greater.

(15) “Commissioner” means the Commissioner of Motor Vehicles.

(P.A. 82-445, S. 1, 15; P.A. 83-198, S. 1, 11; P.A. 95-79, S. 162, 189.)

History: P.A. 83-198 redefined “franchise” in Subdiv. (10) to include the contractual relations between a distributor and dealer; P.A. 95-79 redefined “person” to include a limited liability company, effective May 31, 1995.

Subdiv. (4):

Cited. 194 C. 129.

Subdiv. (14):

Cited. 239 C. 437.

Sec. 42-133s. Obligations of manufacturers and distributors. Retail rate for parts and labor. Establishment, rebuttal and protest. Hearings. Dealer’s claims. (a) Each manufacturer or distributor shall specify in writing to each of its dealers licensed in this state, the dealer’s obligations for predelivery preparation and warranty service on its products, and shall compensate the dealer for such preparation and service. Compensation for parts used in warranty service shall be fair and reasonable, as determined by methods described in subsection (b) of this section. Compensation for labor used in warranty service shall be fair and reasonable, as determined by methods described in subsection (c) of this section.

(b) The retail rate customarily charged by the dealer for parts shall be established by the dealer submitting to the manufacturer or distributor one hundred sequential nonwarranty customer-paid service repair orders which contain warranty-like parts, or sixty consecutive days of nonwarranty customer-paid service repair orders which contain warranty-like parts, whichever is less, covering repairs made no more than one hundred eighty days before the submission and declaring the average percentage markup. The average of the markup rates shall be presumed to be fair and reasonable, however, a manufacturer or distributor may, not later than thirty days after submission, rebut that presumption by reasonably substantiating that the rate is unfair and unreasonable in light of the practices of all other franchised motor vehicle dealers in the vicinity offering the same line-make vehicles. The retail rate shall go into effect thirty days following the declaration, subject to audit of the submitted repair orders by the franchisor and a rebuttal of the declared rate as described above. If the declared rate is rebutted, the manufacturer or distributor shall propose an adjustment of the average percentage markup based on that rebuttal not later than thirty days after submission. If the dealer does not agree with the proposed average percentage markup, the dealer may file a protest with the commissioner not later than thirty days after receipt of that proposal by the manufacturer or distributor. If such a protest is filed, the commissioner shall inform the manufacturer or distributor that a timely protest has been filed and that a hearing will be held on such protest. In any hearing held pursuant to this subsection, the manufacturer or distributor shall have the burden of proving that the rate declared by the dealer was unfair and unreasonable as described in this subsection and that the proposed adjustment of the average percentage markup is fair and reasonable pursuant to the provisions of this subsection.

(c) The retail rate customarily charged by the dealer for labor may be established by submitting to the manufacturer or distributor all nonwarranty customer-paid service repair orders covering repairs made during the month prior to the submission and dividing the amount of the dealer’s total labor sales by the number of total labor hours that generated those sales. The average labor rate shall be presumed to be fair and reasonable, provided a manufacturer or distributor may, not later than thirty days after submission, rebut such presumption by reasonably substantiating that such rate is unfair and unreasonable in light of the practices of all other franchised motor vehicle dealers in the vicinity offering the same line-make vehicles. The average labor rate shall go into effect thirty days following the declaration, subject to audit of the submitted repair orders by the franchisor and a rebuttal of such declared rate. If the declared rate is rebutted, the manufacturer or distributor shall propose an adjustment of the average labor rate based on such rebuttal not later than thirty days after submission. If the dealer does not agree with the proposed average labor rate, the dealer may file a protest with the commissioner not later than thirty days after receipt of that proposal by the manufacturer or distributor. If such a protest is filed, the commissioner shall inform the manufacturer or distributor that a timely protest has been filed and that a hearing will be held on such protest. In any hearing held pursuant to this subsection, the manufacturer or distributor shall have the burden of proving that the rate declared by the dealer was unfair and unreasonable as described in this subsection and that the proposed adjustment of the average labor rate is fair and reasonable pursuant to the provisions of this subsection.

(d) In calculating the retail rate customarily charged by the dealer for parts and labor, the following work shall not be included in the calculation: (1) Repairs for manufacturer or distributor special events, specials or promotional discounts for retail customer repairs; (2) parts sold at wholesale; (3) engine assemblies and transmission assemblies; (4) routine maintenance not covered under any retail customer warranty, such as fluids, filters and belts not provided in the course of repairs; (5) nuts, bolts, fasteners, and similar items that do not have an individual part number; (6) tires; and (7) vehicle reconditioning.

(e) If a manufacturer or distributor furnishes a part or component to a dealer, at no cost, to use in performing repairs under a recall, campaign service action or warranty repair, the manufacturer or distributor shall compensate the dealer for the part or component in the same manner as warranty parts compensation under this section by compensating the dealer the average markup on the cost for the part or component as listed in the manufacturer’s or distributor’s price schedule less the cost for the part or component.

(f) A manufacturer or distributor may not require a dealer to establish the retail rate customarily charged by the dealer for parts and labor by an unduly burdensome or time consuming method or by requiring information that is unduly burdensome or time consuming to provide, including, but not limited to, part-by-part or transaction-by-transaction calculations. A dealer may not declare an average percentage markup or average labor rate more than twice in one calendar year.

(g) A manufacturer or distributor may not otherwise recover its costs from dealers within this state, including an increase in the wholesale price of a vehicle or surcharge imposed on a dealer solely intended to recover the cost of reimbursing a dealer for parts and labor pursuant to this section, provided a manufacturer or distributor shall not be prohibited from increasing prices for vehicles or parts in the normal course of business.

(h) Time allowances for the diagnosis and performance of warranty work and service shall be reasonable and adequate for the work to be performed.

(i) Each manufacturer or distributor shall perform all warranty obligations, include in written notices of factory recalls to owners and dealers the expected date by which necessary parts and equipment will be available to dealers for the correction of such defects and compensate dealers for repairs necessitated by such recall.

(j) All claims by dealers under this section for such labor and parts and all claims for compensation relative to any sales incentive programs shall be paid not later than thirty days after approval by the manufacturer or distributor, provided manufacturers or distributors retain the right to audit such claims and to charge-back the dealer for false or unsubstantiated claims for a period of two years following payment. If there is evidence of fraud, the provisions of this subsection shall not limit the right of a manufacturer or distributor to audit a dealer for longer periods of time and charge-back the dealer for any fraudulent claim. Dealers shall be required to maintain defective parts for a period of not longer than ninety days following submission of claims. All such claims shall be either approved or disapproved not later than thirty days after their receipt on forms, and in the manner specified by, the manufacturer or distributor. Any claim not disapproved in writing or by means of electronic transmission not later than thirty days after receipt shall be deemed approved and payment shall be made within thirty days.

(P.A. 82-445, S. 2, 15; P.A. 83-198, S. 2, 11; P.A. 95-245, S. 1, 3; P.A. 09-50, S. 1.)

History: P.A. 83-198 applied provisions to distributors; P.A. 95-245 amended Subsec. (d) to require that all claims for compensation re sales incentive programs be paid within 30 days following manufacturer or distributor approval, to provide that if there is evidence of fraud, provisions shall not limit right of manufacturer or distributor to audit dealer for longer periods of time and charge-back for fraudulent claim and to allow disapproval of claims by means of electronic transmission, effective July 1, 1995; P.A. 09-50 amended Subsec. (a) to replace requirement that manufacturer and distributor provide dealer with schedule of compensation for parts and labor with provisions re fair and reasonable compensation for parts and labor, added new Subsecs. (b) to (g) re payment of compensation, redesignated existing Subsec. (b) as Subsec. (h) and amended same to delete provisions re reasonable compensation, redesignated existing Subsecs. (c) and (d) as Subsecs. (i) and (j), and made technical changes in redesignated Subsec. (j), effective May 8, 2009.

Sec. 42-133t. Liability of manufacturers and distributors for damages. Allocation of risk of loss. (a) Notwithstanding the terms, provisions or conditions of any agreement or franchise, manufacturers or distributors shall be liable for all damages to motor vehicles which occur prior to delivery to a carrier or transporter.

(b) If a dealer chooses the method of transportation, the risk of loss passes to the dealer upon delivery of the vehicle to the carrier.

(c) Except as provided in subsection (b) of this section, risk of loss remains with the manufacturer or distributor until such time as the dealer or his designee accepts the vehicle from the carrier.

(P.A. 82-445, S. 3, 15; P.A. 83-198, S. 3, 11.)

History: P.A. 83-198 applied provisions to distributors.

Sec. 42-133u. Manufacturers or dealers to indemnify franchised dealers. Notwithstanding the terms of any franchise agreement, each manufacturer or distributor shall indemnify and hold harmless its franchised dealers against any judgment for damages, including, but not limited to, court costs and reasonable attorneys’ fees of the dealer, arising out of complaints, claims or lawsuits including, but not limited to, strict liability, negligence, misrepresentation, express or implied warranty or rescission of sale to the extent that the judgment relates to alleged defective or negligent manufacture, assembly or design of motor vehicles, parts or accessories or other functions by the manufacturer or distributor, which are beyond the control of the dealer.

(P.A. 82-445, S. 4, 15; P.A. 83-198, S. 4, 11.)

History: P.A. 83-198 made distributors subject to the provisions of this section.

Sec. 42-133v. Cancellation, termination or nonrenewal of franchise. “Good cause” requirement. Notice. Appeal. (a) Notwithstanding the terms, provisions or conditions of any franchise agreement and notwithstanding the terms or provisions of any waiver or other agreement between the manufacturer or distributor and the dealer, no manufacturer or distributor shall cancel, terminate or fail to renew any franchise with a licensed dealer unless the manufacturer or distributor has satisfied the notice requirement of subsection (d) of this section, has good cause for cancellation, termination or nonrenewal and has acted in good faith.

(b) Notwithstanding the terms, provisions or conditions of any franchise or the terms or provisions of any waiver or other agreement between the manufacturer or distributor and the dealer, good cause exists for the purposes of a termination, cancellation or nonrenewal if:

(1) There is a failure by the dealer to comply with a provision of the franchise which is both reasonable and of material significance to the franchise relationship, provided that the dealer has been notified in writing of the failure not later than one hundred eighty days after the manufacturer or distributor first acquired knowledge of such failure;

(2) If the failure by the dealer, defined in subdivision (1) of this subsection, relates to the performance of the dealer in sales or service, then good cause shall be defined as the failure of the dealer to comply with reasonable performance criteria established by the manufacturer or distributor if the dealer was apprised by the manufacturer or distributor in writing of such failure; and: (A) The notification stated that notice was provided of failure of performance under this section; (B) the dealer was afforded a reasonable opportunity, for a period of not less than six months, to comply with such criteria; and (C) the dealer did not demonstrate substantial progress towards compliance with the manufacturer’s or distributor’s performance criteria during such period.

(c) The manufacturer or distributor shall have the burden of proof under this section.

(d) Notwithstanding the terms, provisions or conditions of any franchise or other agreement between the manufacturer or distributor and the dealer, prior to the termination, cancellation or nonrenewal of any franchise, the manufacturer or distributor shall furnish notification of such termination, cancellation or nonrenewal to the dealer as follows: (1) In the manner described in subsection (e) of this section; and (2) not less than ninety days prior to the effective date of such termination, cancellation or nonrenewal; or (3) not less than fifteen days prior to the effective date of such termination, cancellation or nonrenewal with respect to: (A) Insolvency of the dealer, or filing of any petition by or against the dealer under any bankruptcy or receivership law; (B) failure of the dealer to conduct customary sales and service operations during business hours for seven consecutive business days, except in circumstances beyond the direct control of the dealer; (C) conviction of the dealer, or any owner thereof, of any felony which is punishable by imprisonment; (D) suspension or revocation of any license which the new motor vehicle dealer is required to have to operate a dealership; or (E) a fraudulent misrepresentation by the dealer to the manufacturer or distributor which is material to the franchise; (4) not less than one hundred eighty days prior to the effective date of such termination or cancellation if the manufacturer or distributor is discontinuing the sale of the product line.

(e) Notice under this section shall be in writing, sent by certified mail or personally delivered to the dealer; and shall contain: (1) A statement of intention to terminate, cancel or not to renew the franchise; (2) a statement of the reasons for the termination, cancellation or nonrenewal; and (3) the date on which such termination, cancellation or nonrenewal takes effect.

(f) No manufacturer or distributor shall terminate, cancel or fail to renew a dealer’s franchise for the failure or refusal of the dealer to do any of the following: (1) Failure to meet sales quotas suggested by the manufacturer or distributor; (2) refusal to sell any product at a price suggested by the manufacturer or distributor; (3) refusal to keep the premises open and operating during those hours which are documented by the dealer to be unprofitable to the dealer or to preclude the dealer from establishing his own hours of operation beyond the hour of 10:00 p.m. and prior to 6:00 a.m.; (4) refusal to meet unreasonable minimum standards and marketing guides, which include, but are not limited to, capital, inventory, facility and personnel requirements; (5) refusal to give the manufacturer or distributor financial records of the operation of the franchise which are not related or necessary to the dealer’s obligations under the franchise agreement. Subdivisions (1) to (5), inclusive, of this subsection shall not be deemed good cause under subsection (b) of this section.

(g) If a franchisee brings an action in a court of competent jurisdiction to challenge the cancellation, termination or nonrenewal of a franchise agreement by a manufacturer or distributor under this section, such franchise agreement shall remain in full force and effect and such franchisee shall retain all rights and remedies pursuant to the terms and conditions of such franchise agreement, including, but not limited to, the right to sell or transfer such franchisee’s ownership interest, until a final determination by the court of competent jurisdiction and any appeal from such determination, unless extended by the court of competent jurisdiction for good cause. This subsection shall not apply to a cancellation, termination or nonrenewal of a franchise agreement based upon any of the reasons set forth in subdivision (3) of subsection (d) of this section.

(P.A. 82-445, S. 5, 15; P.A. 83-198, S. 5, 11; 83-304, S. 1, 2; P.A. 99-132; P.A. 09-50, S. 2.)

History: P.A. 83-198 subjected distributors to the provisions of this section; P.A. 83-304 added Subsec. (f) limiting manufacturer’s or distributor’s ability to cancel, terminate or fail to remove a dealer’s franchise; P.A. 99-132 added Subsec. (g) re appeal of a cancellation, termination or nonrenewal of a franchise agreement; P.A. 09-50 amended Subsecs. (a), (b) and (d) to extend applicability of provisions re waiver and franchise to any “other agreement between the manufacturer or distributor and the dealer”, amended Subsec. (g) to change time period of agreement’s full force and effect following initiation of court action from 6 months following final determination by court to until final determination and any appeal from such determination, and made technical changes in Subsecs. (b)(1), (d) and (f), effective May 8, 2009.

Sec. 42-133w. Manufacturer or distributor to compensate dealer upon termination, nonrenewal or cancellation. (a) Upon the termination, nonrenewal or cancellation of any franchise under sections 42-133r to 42-133ee, inclusive, initiated by the manufacturer, distributor or dealer, the dealer shall be allowed fair and reasonable compensation by the manufacturer or distributor for: (1) The new current model year motor vehicles and the prior model year motor vehicles acquired not later than twelve months preceding such termination, with fewer than three hundred miles registered on the odometer, acquired from the manufacturer, distributor or a same line-make dealer, in the ordinary course of business, limited to vehicles in such inventory that are (A) unaltered, except for the addition of customary manufacturer-approved accessories, and (B) undamaged; (2) all new, unused and undamaged parts listed in the current parts catalog acquired from a manufacturer or distributor or its approved or recommended sources at the dealer price listed in such catalog, less applicable allowances plus five per cent of the catalog price of the part for the cost of packing and returning the parts to the manufacturer or distributor; (3) supplies and furnishings if purchased from the manufacturer or distributor or its approved sources; and (4) any special tools or equipment offered for sale during the three years preceding termination, nonrenewal or cancellation and each trademark or trade name bearing sign which was required by the manufacturer or distributor at fair market value at the time of notice of termination.

(b) Compensation under subsection (a) of this section shall be paid by the manufacturer or distributor not later than ninety days after the effective date of termination, cancellation or nonrenewal if the dealer has title to the vehicle inventory and other items and is able to convey title to the manufacturer or distributor.

(c) The provisions of this section shall not apply in the event of a sale of the assets or stock of a motor vehicle dealership.

(P.A. 82-445, S. 6, 15; P.A. 83-198, S. 6, 11; P.A. 95-245, S. 2, 3; P.A. 05-288, S. 145; P.A. 09-50, S. 3.)

History: P.A. 83-198 subjected distributors to the provisions of this section; P.A. 95-245 amended Subsec. (a) to insert new language as Subdiv. (2) allowing dealers to be compensated for all new, unused and undamaged parts listed in current parts catalog at dealer price with allowances and adjustments, renumbering the remaining Subdivs. accordingly, and to insert new language as Subdiv. (4) allowing dealers to be compensated for equipment offered for sale during three years preceding termination, nonrenewal or cancellation and for each trademark or trade name bearing sign at fair market value and amended Subsec. (b) to insert “vehicle” before “inventory”, effective July 1, 1995; P.A. 05-288 made a technical change in Subsec. (b), effective July 13, 2005; P.A. 09-50 amended Subsec. (a) to insert “initiated by the manufacturer, distributor or dealer”, add requirements re motor vehicles acquired not later than 12 months preceding termination of franchise and make conforming changes in Subdiv. (1) and delete “recommended or” in Subdiv. (4), made technical change in Subsec. (b) and added Subsec. (c) re exemption of sale of dealership assets or stock, effective May 8, 2009.

Sec. 42-133x. Effects of a franchise termination, cancellation or nonrenewal. (a) In the event of a termination, cancellation or nonrenewal under subdivision (2) of subsection (b) of section 42-133v by the manufacturer, distributor or dealer under subsection (b) of this section:

(1) If the dealer is leasing the dealership facilities from a lessor other than the manufacturer or distributor, or owns the dealership facilities, the manufacturer or distributor shall pay a reasonable rent to the dealer in accordance with and subject to subdivision (2) of this subsection.

(2) Such reasonable rent shall be paid only to the extent that the dealership premises are recognized in the franchise and only if they are not substantially in excess of those facilities recommended by the manufacturer or distributor. If the facility is used for the operation of more than one franchise, the reasonable rent shall be paid based upon the portion of the facility utilized by the franchise being terminated, cancelled or nonrenewed.

(3) If the facilities are owned by the dealer, the manufacturer or distributor will either: (A) Locate a purchaser who will offer to purchase the dealership facilities at a reasonable price, or (B) locate a lessee who will offer to lease the premises for a reasonable term at a reasonable rent, or (C) failing the foregoing, lease the dealership facilities at a reasonable rent for one year.

(4) If the facilities are leased by the dealer, the manufacturer or distributor will either: (A) Locate a tenant satisfactory to the lessor, who will sublet or assume the balance of the lease, or (B) arrange with the lessor for the cancellation of the lease without penalty to the dealer, or (C) failing the foregoing, lease the dealership facilities at a reasonable rate for one year.

(5) The manufacturer or distributor shall not be obligated to provide assistance under this section if the dealer: (A) Fails to accept a bona fide offer from a prospective purchaser, sublessee or assignee, or (B) refuses to execute a settlement agreement with the lessor if such agreement would be without cost to the dealer, or (C) fails to make a written request for assistance under this section not later than one month after the termination, cancellation or nonrenewal.

(b) In the event of a termination, cancellation or nonrenewal due to the discontinuation of a line make, and in addition to all other compensation and repurchase obligations contained in section 42-133w and this section, the manufacturer or distributor shall pay the fair market value of the goodwill of the franchise as of the date immediately preceding the manufacturer’s announcement of the action resulting in a brand being presently, or in the future, discontinued. The dealer may immediately request payment under this subsection following the announcement in exchange for cancelling any further franchise rights, except payments owed to the dealer in the ordinary course of business, or may request payment under this subsection upon the final termination, cancellation or nonrenewal of the franchise. In either case, payment under this subsection shall be made not later than ninety days after the request by the dealer.

(c) If, in any action for damages under this section, the manufacturer or distributor fails to prove that the manufacturer or distributor has acted in good faith or that there was good cause for the franchise termination, cancellation or nonrenewal, then the manufacturer or distributor may terminate, cancel or fail to renew the franchise upon payment to the motor vehicle dealer of an amount equal to the value of the dealership as an ongoing business location as agreed by the parties or, lacking agreement, as determined by the court.

(P.A. 82-445, S. 7, 15; P.A. 09-50, S. 4.)

History: P.A. 09-50 amended Subsec. (a) to insert reference to Subsec. (b), to replace requirement re premises used solely for performance in accordance with franchise with provision re payment of reasonable rent for facilities used for operation of more than one franchise in Subdiv. (2), to reduce lease period from 2 years to 1 year in Subdivs. (3)(C) and (4)(C) and to make a technical change in Subdiv. (5), added new Subsec. (b) re goodwill payment and redesignated existing Subsec. (b) as Subsec. (c), effective May 8, 2009.

Sec. 42-133y. Succession to ownership interest in dealership by family member upon owner’s death or incapacity. (a) Any owner may appoint by will, or other written instrument, a designated family member to succeed in the ownership interest of the owner in the dealer.

(b) Unless good cause exists for refusal to honor the succession on the part of the manufacturer or distributor, any designated family member of a deceased or incapacitated owner of a dealer may succeed to the ownership of the dealer under the existing franchise if: (1) The designated family member gives the manufacturer or distributor written notice of his or her intention to succeed to the ownership of the dealer within sixty days of the owner’s death or incapacity, and (2) the designated family member agrees to be bound by all the terms and conditions of the franchise.

(c) The manufacturer or distributor may request, and the designated family member shall provide, promptly upon such request, personal and financial data reasonably necessary to determine whether the succession should be honored.

(P.A. 82-445, S. 8, 15.)

Sec. 42-133z. Refusal to honor succession by family member. Notice. (a) If a manufacturer or distributor believes that good cause exists for refusing to honor the succession by a family member of a deceased or incapacitated owner under the existing franchise agreement, the manufacturer or distributor may, not more than sixty days following receipt of notice of the designated family member’s intent to succeed and receipt of such personal or financial data, serve upon the designated family member notice of its refusal to honor the succession and of its intent to discontinue the existing franchise with the dealer not earlier than ninety days from the date such notice is served.

(b) The notice must state the specific grounds for the refusal to honor the succession.

(c) If notice of refusal and discontinuance is not timely served upon the family member, the franchise shall continue.

(P.A. 82-445, S. 9, 15.)

Sec. 42-133aa. Burden of proof for succession refusal on manufacturer or distributor. In determining whether good cause for the refusal to honor the succession exists, the manufacturer or distributor has the burden of proving that the successor is not of good moral character or does not meet the franchisor’s existing and reasonable standards and uniformly applied minimum business experience standards in the market area. The provisions of sections 42-133y, 42-133z and this section do not preclude a new motor vehicle dealer from designating any person as his successor by written instrument filed with the manufacturer or distributor and in the event there is a conflict between such written instrument and the provisions of these sections, the written instrument shall govern.

(P.A. 82-445, S. 10, 15; P.A. 83-198, S. 7, 11.)

History: P.A. 83-198 applied provisions to distributors.

Sec. 42-133bb. Prohibited acts by manufacturer or distributor re dealer. Notwithstanding the terms, provisions or conditions of any franchise agreement or other agreement between a manufacturer or distributor and a dealer, no manufacturer or distributor shall require that a dealer:

(1) Order or accept delivery of any new motor vehicle, part or accessory, equipment or any other commodity not required by law in connection with warranty service or a recall campaign or voluntarily ordered by the dealer, except that the provisions of this subdivision shall not affect terms or provisions of a franchise requiring dealers to market a representative line of motor vehicles which the manufacturer or distributor is publicly advertising;

(2) Order or accept delivery of any new motor vehicle with special features, accessories or equipment not included in the list price of such motor vehicles as publicly advertised by the manufacturer or distributor;

(3) Pay all or part of the cost of an advertising campaign or contest, or purchase any promotional materials, training material, showroom or other display decorations or materials at the expense of the new motor vehicle dealer without the consent of the new motor vehicle dealer;

(4) Enter into any agreement with the manufacturer or distributor or do any other act prejudicial to the dealer under threat of termination or cancellation of a franchise or agreement between the dealer and the manufacturer or distributor, except that this subdivision shall not preclude the manufacturer or distributor from insisting on compliance with the reasonable terms or provisions of the franchise or agreement, and notice in good faith to any dealer of the dealer’s violation of such terms or provisions shall not constitute a violation of sections 42-133r to 42-133ee, inclusive;

(5) Change the capital structure of the dealer or the means by which the dealer finances the operation of the dealership provided the dealer meets reasonable capital standards established by the manufacturer or distributor in accordance with uniformly applied criteria, and provided further that no change in the capital structure shall cause a change in the principal management or have the effect of a sale of the franchise without the consent of the manufacturer or distributor and such consent shall not be unreasonably withheld;

(6) Refrain from participation in the management of, investment in, or acquisition of any other line of new motor vehicles or related products, provided this subdivision shall not apply unless the dealer maintains a reasonable line of credit for each line make of new motor vehicle, the dealer remains in compliance with any reasonable facilities requirements of the manufacturer or distributor, and no change is made in the principal management of the dealer;

(7) Prospectively assent to a release, assignment, novation, waiver or estoppel which would relieve any person from liability to be imposed by sections 42-133r to 42-133ee, inclusive, or require any controversy between a dealer and a manufacturer or distributor, to be referred to any forum other than the Superior Court or the United States District Court;

(8) Construct, renovate or make substantial alterations to the dealer’s facilities unless the manufacturer or distributor can demonstrate that such construction, renovation or alteration requirements are reasonable and justifiable in light of current and reasonably foreseeable projections of economic conditions, financial expectations, availability of additional vehicle allocation and such dealer’s market for the sale of vehicles.

(P.A. 82-445, S. 11, 15; P.A. 83-198, S. 8, 11; P.A. 09-50, S. 5.)

History: P.A. 83-198 subjected distributors to the provisions of this section; P.A. 09-50 amended introductory language to notwithstand terms of any agreement between manufacturer or distributor and dealer, made a technical change in Subdivs. (5) and (6), and added Subdiv. (8) re changes to dealer’s facilities, effective May 8, 2009.

Sec. 42-133cc. Prohibited acts by manufacturer or distributor. Notwithstanding the terms, provisions or conditions of any franchise agreement or other agreement between a manufacturer or distributor and a dealer, no manufacturer or distributor shall:

(1) (A) Delay, refuse or fail to deliver new motor vehicles or parts or accessories in a reasonable time, and in reasonable quantity relative to the dealer’s facilities and sales potential in the dealer’s relevant market area, after acceptance of an order from a dealer having a franchise for the retail sale of any new motor vehicle sold or distributed by the manufacturer or distributor, any new motor vehicle, parts or accessories for new vehicles as are covered by such franchise, if such vehicle, parts or accessories are publicly advertised as being available for delivery or actually being delivered; (B) withhold any new motor vehicle from distribution except a vehicle which is part of a demonstration fleet or withhold or delay distribution of new motor vehicles to induce dealers to order additional parts or accessories, to order new motor vehicles that are difficult to sell, to relocate the dealer’s place of business or to construct a new building. This subdivision shall not apply to a failure caused by acts or causes beyond the control of the manufacturer or distributor;

(2) (A) Refuse to disclose to any dealer, handling the same line make, the manner and mode of distribution of that line make within the relevant market area, or (B) if a line make is allocated among dealers, refuse to disclose to any dealer, handling the same line make, the system of allocation, including, but not limited to, a complete breakdown by model, color, equipment and other items or terms, a concise listing of dealerships and an explanation of the derivation of the allocation system, including its mathematical formula in a clear and comprehensible form;

(3) Obtain money, goods, service or any other benefit from any other person with whom the dealer does business, on account of, or in relation to, the transaction between the dealer and such other person, other than for compensation for services rendered, unless such benefit is promptly accounted for, and transmitted to, the dealer;

(4) Increase prices of new motor vehicles which the dealer had ordered for private retail consumers prior to the dealer’s receipt of the written official price increase notification. A sales contract signed by a private retail consumer shall constitute evidence of each such order, provided such vehicle is in fact delivered to such private retail consumer. In the event of manufacturer or distributor price reductions or cash rebates paid to the dealer, the amount of any such reduction or rebate received by a dealer shall be passed on to the private retail consumer by the dealer. Price reductions shall apply to all vehicles in the dealer’s inventory which were subject to the price reduction. Price differences applicable to new models or series shall not be considered a price increase or price decrease. Price changes caused by (A) the addition to a motor vehicle of required or optional equipment, (B) revaluation of the dollar, in the case of foreign-make vehicles or components, or (C) an increase in transportation charges due to increased rates imposed by common carriers or transporters shall not be subject to the provisions of this subdivision;

(5) Offer refunds or other types of inducements to any person for the purchase of new motor vehicles of a certain line make to be sold to the state or any political subdivision thereof without making the same offer available upon request to all other dealers in the same line make within the relevant market area;

(6) Release to any outside party, except under subpoena or as otherwise required by law or in an administrative, judicial or arbitration proceeding involving the manufacturer or distributor or dealer, any business, financial or personal information which may be from time to time provided by the dealer to the manufacturer or distributor, without the express written consent of the dealer;

(7) Deny any dealer the right of free association with any other dealer for any lawful purpose;

(8) Unfairly compete with a dealer in the same line make operating under an agreement or franchise from such manufacturer or distributor in the relevant market area. A manufacturer or distributor shall not, however, be deemed to be competing when operating a dealership for a temporary period not to exceed one year, or such additional period of time as may be permitted by the Commissioner of Motor Vehicles, in accordance with the provisions of section 14-52b, or in a bona fide retail operation which is for sale to any qualified person at a fair and reasonable price, or in a bona fide relationship in which an independent person has made a significant investment subject to loss in the dealership and can reasonably expect to acquire full ownership of such dealership on reasonable terms and conditions;

(9) Unfairly discriminate among its new motor vehicle dealers with respect to warranty reimbursement;

(10) Unreasonably withhold consent to the sale, transfer or exchange of the franchise to a qualified buyer capable of being licensed as a dealer;

(11) Fail to respond in writing to a request for consent under subdivision (10) of this section not later than sixty days after receipt of all information reasonably and customarily required by the manufacturer or distributor. Such failure to respond shall be deemed to be consent to the request;

(12) Unfairly prevent a dealer from receiving fair and reasonable compensation for the value of its dealership;

(13) Engage in any predatory practice against a dealer;

(14) Terminate any franchise solely because of the death or incapacity of an owner who is not listed in the franchise as one on whose expertise and abilities the manufacturer or distributor relied in the granting of the franchise;

(15) Withhold payment of money which the franchisor owes to a dealer for more than thirty days after the date of approval of the request for reimbursement;

(16) Own, operate or control, either directly or indirectly, a facility for the performance of motor vehicle warranty service work. Nothing contained in this subsection shall prohibit a motor vehicle manufacturer, factory branch, distributor or distributor branch from performing service for reasons of compliance with an order of a court of competent jurisdiction;

(17) Provide in any franchise agreement that in any administrative or judicial proceeding arising from any dispute with respect to such agreement, the prevailing party shall be entitled to recover its costs, reasonable attorney’s fees and other expenses of litigation from the other party;

(18) Unreasonably prevent or refuse to approve the relocation of a dealership to another site within the dealership’s relevant market area, including a refusal by either the manufacturer or distributor for the relocation of the dealership or a refusal by the manufacturer or distributor for any franchise currently located at such proposed new location. The dealer shall provide written notice to the manufacturer or distributor that shall include the address of the proposed new location and a reasonable site plan of the proposed facility. The manufacturer or distributor shall, not later than sixty days after receipt of such reasonably requested information, grant or deny the dealer’s relocation request. Failure to deny such request within such sixty-day period shall be deemed consent to the relocation;

(19) Sell or offer to sell any new motor vehicle to a dealer at a lower actual price than the actual price offered to any other franchised motor vehicle dealer for the same model vehicle similarly equipped, or to utilize any device, including, but not limited to, sales promotion plans, funds or financing to upgrade facilities, discounts or programs that result in such lesser actual price, provided the provisions of this subdivision shall not apply to sales to a dealer for: (A) Resale to any unit of government; or (B) donation or use by said dealer in a driver education or other special events program. This subdivision shall not be construed to prevent the offering of sales incentives or discount programs, provided such incentives or discounts are reasonably and practically available to all dealers in this state on a proportionally equal basis;

(20) Withhold directly, or through the loss of, any benefit made available to other same line-make dealers in this state because of a dealer’s refusal to engage in conduct or take action unrelated to the benefit;

(21) Fail to begin the accrual of any express warranty for a new motor vehicle by the date of the original delivery to the consumer, provided, if the warranty is expressed in terms of time, such time frame shall begin on such original delivery date, or, if expressed in terms of number of miles, the mileage, not exceeding five hundred miles, shall be the mileage on the vehicle’s odometer on such original delivery date.

(P.A. 82-445, S. 12, 15; P.A. 83-198, S. 9, 11; 83-264, S. 1, 2; P.A. 93-234, S. 1; P.A. 97-196, S. 1, 2; P.A. 99-268, S. 26; P.A. 00-169, S. 22, 36; P.A. 02-70, S. 33; P.A. 09-50, S. 6.)

History: P.A. 83-198 and P.A. 83-264 subjected distributors to the provisions of this section; P.A. 83-264 also amended Subdivs. (1) and (2) to prohibit the withholding of a new motor vehicle from distribution, with certain exceptions, and to prohibit manufacturers and distributors from refusing to disclose to dealers of line makes the system of allocation of those line makes; P.A. 93-234 added Subdiv. (16) prohibiting the ownership, operation or control of a facility for the performance of motor vehicle warranty service work; P.A. 97-196 added Subdiv. (17) prohibiting the provision in any franchise agreement that in any proceeding arising from any dispute re such agreement, prevailing party is entitled to recover legal expenses incurred, effective June 24, 1997; P.A. 99-268 amended Subdiv. (8) by clarifying the time deemed to be competing when operating a dealership from “temporarily for a reasonable period” to “for a temporary period not to exceed one year”; P.A. 00-169 revised effective date of P.A. 99-268 but without affecting this section; P.A. 02-70 amended Subdiv. (8) to provide that a manufacturer or distributor shall not be deemed to be competing when operating a dealership for such additional period of time as permitted by the Commissioner of Motor Vehicles in accordance with Sec. 14-52b; P.A. 09-50 amended introductory language to notwithstand terms of any agreement between manufacturer or distributor and dealer, made technical changes in Subdivs. (1), (2) and (4), amended Subdiv. (11) to make written response requirement subject to receipt of information and added Subdivs. (18) to (21) re additional prohibitions, effective May 8, 2009.

Sec. 42-133dd. Establishment of new franchises within a market area. Notice of intention. Protests. Procedure. Hearing. (a) In the event that a manufacturer or distributor seeks to enter into a franchise establishing a new dealer or relocating an existing dealer within or into a relevant market area where the same line make is then represented, the manufacturer or distributor shall in writing, by certified mail, first notify the commissioner and each dealer in such line make in the relevant market area of its intention to establish a new dealer or to relocate an existing dealer within or into that market area. Within twenty days of receiving such notice or within twenty days after the end of any appeal procedure provided by the manufacturer or distributor, any such dealer may file with the commissioner a protest concerning the proposed establishment or relocation of such new or existing dealer. When such a protest is filed, the commissioner shall inform the manufacturer or distributor that a timely protest has been filed, and that the manufacturer or distributor shall not establish or relocate the proposed dealer until the commissioner has held a hearing, nor thereafter, if the commissioner determines that there is good cause for denying the establishment or relocation of such dealer. In any hearing held pursuant to this section, the manufacturer or distributor has the burden of proving that good cause exists for permitting the proposed establishment or relocation. This section shall not apply to the sale, lease or transfer of ownership of an active, existing dealer, nor shall any provision of this section prohibit a manufacturer from entering into a franchise arrangement with a successor dealer at the same location.

(b) This section shall not apply to (1) the relocation of an existing dealer within that dealer’s area of responsibility under its franchise, provided that the relocation shall not be at a site within six miles of a licensed dealer for the same line make of motor vehicle, (2) the appointment of a dealer in the same relevant market area, within one year, at either the same location or within a two-mile radius from a predecessor dealer who ceased operations, or (3) the sale of new or used motor vehicles by a licensed new motor vehicle dealer at a public display of motor vehicles sponsored by an association of licensed new motor vehicle dealers representing more than seventy-five per cent of such dealers in the state. Such display shall be permitted annually, for a period not exceeding four consecutive days.

(c) In determining whether good cause has been established for not entering into a franchise establishing a new dealer or relocating an existing dealer for the same line make, the commissioner shall take into consideration the existing circumstances, including, but not limited to: (1) The permanency and size of investment made and the reasonable obligations incurred by the existing new motor vehicle dealers in the relevant market area; (2) growth or decline in population and new car registrations in the relevant market area; (3) effect on the consuming public in the relevant market area; (4) whether it is injurious or beneficial to the public welfare for a new dealer to be established; (5) whether the dealers of the same line make in that relevant market area are providing adequate competition and convenient customer care for the motor vehicles of the line make in the market area including the adequacy of motor vehicle sales and service facilities, equipment, supply of motor vehicle parts, and qualified service personnel; (6) whether the establishment of a new dealer would increase or decrease competition; (7) the effect on the relocating dealer of a denial of its relocation into the relevant market area; (8) whether the establishment or relocation of the proposed dealership appears to be warranted and justified based on economic and marketing conditions pertinent to dealers competing in the community or territory, including anticipated future changes; (9) the reasonably expected market penetration of the line-maker motor vehicle for the community or territory involved, after consideration of all factors which may affect said penetration, including, but not limited to, demographic factors such as age, income, education, size class preference, product popularity, retail lease transactions, or other factors affecting sales to consumers of the community or territory; (10) the economic impact of an additional franchise or relocated motor vehicle dealership upon the existing motor vehicle dealers of the same line make in the relevant market area to be served by the additional franchisee or relocated motor vehicle dealership; and (11) the retail sales and service business transacted by the existing dealers of the same line make in the market area to be served by the proposed new or relocated dealer as compared to the business available to them during the three-year period immediately preceding notice.

(d) The commissioner shall conduct the hearing and render his final determination within one hundred eighty days after a protest is filed. Unless waived by the parties, failure to do so shall be deemed a determination that good cause does not exist for refusing to permit the proposed new or relocated dealer, unless such delay is caused by acts of the manufacturer or distributor or the relocating or new dealer.

(e) Any parties to a hearing by the commissioner concerning the establishing or relocating of a dealer may appeal any decision or order of the commissioner in accordance with section 4-183.

(P.A. 82-445, S. 13, 15; P.A. 83-198, S. 10, 11; P.A. 84-463; P.A. 93-234, S. 2; P.A. 02-70, S. 45; P.A. 10-110, S. 32.)

History: P.A. 83-198 subjected distributors to the provisions of this section; P.A. 84-463 changed reference from additional dealerships to new dealerships and excluded franchise agreements and transfers of existing dealerships from the provisions of this section; P.A. 93-234 made technical changes, required that notice requirement in Subsec. (a) be sent by certified mail, amended Subsec. (b) to exclude from applicability of section dealers appointed within one year at same location or within two-mile radius of predecessors who ceased operations and added Subsec. (c)(8) to (11) requiring commissioner to consider additional factors when determining if good cause exists for refusing to allow establishment or relocation of dealership; P.A. 02-70 amended Subsec. (a) to provide that the manufacturer or distributor has the burden of proving that good cause exists for permitting a proposed establishment or relocation of a motor vehicle franchise in any hearing held pursuant to section; P.A. 10-110 amended Subsec. (b) by adding Subdiv. (3) re sale of motor vehicles by dealer at public display.

Cited. 192 C. 558.

Subsec. (a):

Cited. 239 C. 437.

Subsec. (b):

Cited. 239 C. 437.

Sec. 42-133ee. Civil action for injunction and damages. Notwithstanding the terms, provisions or conditions of any agreement or franchise or the terms or provisions of any waiver, any consumer who is injured by a violation of sections 42-133r to 42-133ee, inclusive, or any party to a franchise who is so injured in his business or property by a violation of said sections relating to that franchise, or any person so injured because he refuses to accede to a proposal for an arrangement which, if consummated, would be in violation of said sections, may bring a civil action in the Superior Court to enjoin further violations, and to recover the actual damages sustained by him together with the cost of the suit, including a reasonable attorney’s fee.

(P.A. 82-445, S. 14, 15.)

Cited. 10 CA 22.

Sec. 42-133ff. Surcharge based on method of payment prohibited. Acceptance of bank credit card bearing a trade name. Discount not prohibited. Contracts not to prohibit discounts based on method of payment for gasoline. Minimum purchase policy. Purchase of travel services using a credit card. (a) No seller may impose a surcharge on a buyer who elects to use any method of payment, including, but not limited to, cash, check, credit card or electronic means, in any sales transaction.

(b) Any seller who accepts or offers to accept a bank credit card bearing a trade name as a means of payment shall accept any bank credit card bearing such trade name presented by a cardholder, notwithstanding the identity of the card issuer. For the purposes of this subsection, “bank credit card” means any credit card issued by a bank, savings bank, savings and loan association or credit union.

(c) Nothing in this section shall prohibit any seller from offering a discount to a buyer to induce such buyer to pay by cash, debit card, check or similar means rather than by credit card. In furtherance of the legislative findings contained in section 42-133j, no existing or future contract or agreement shall prohibit a gasoline retailer or distributor from offering a discount to a buyer based upon the method of payment by such buyer for such gasoline. Any provision in such contract or agreement prohibiting such retailer or distributor from offering such discount is void and without effect as contrary to public policy.

(d) Nothing in this section shall prohibit any seller from conditioning acceptance of a credit card on a buyer’s minimum purchase. Each seller shall disclose any such minimum purchase policy orally or in writing at the point of purchase. For the purposes of this subsection, “at the point of purchase” includes, but is not limited to, at or on a cash register and in an advertisement or menu.

(e) No provider of travel services may impose a surcharge on or reduce the commission paid to a travel agent who acts as an agent for such provider if the buyer uses a credit card to purchase such provider’s travel services. A violation of any provision of this subsection shall be deemed an unfair or deceptive trade practice under subsection (a) of section 42-110b. As used in this subsection, “provider of travel services” means a person, firm or corporation engaged in the business of furnishing travel, transportation or vacation services, but does not include a travel agent, and “travel agent” means a person, firm, corporation or other entity that (1) is (A) a duly appointed agent of a common carrier, or (B) a member of a cruise line association and operates exclusively as an agent for cruise lines in the sale of cruise travel products or services, and (2) offers or sells travel, transportation or vacation arrangements as an agent for a provider of travel services, but does not include a common carrier or an employee of a common carrier.

(P.A. 86-222; P.A. 98-37; P.A. 99-88; June 11 Sp. Sess. P.A. 08-2, S. 4.)

History: P.A. 98-37 amended Subsec. (a) by deleting provisions re use of a credit card in lieu of payment by cash, check or similar means and adding provisions re use of any method of payment, and made technical changes in Subsecs. (b) and (d); P.A. 99-88 added new Subsec. (e) to prohibit travel service providers from imposing surcharges on travel agents or reducing their commissions for travel services purchased by buyers using credit cards; June 11 Sp. Sess. P.A. 08-2 amended Subsec. (c) to add “debit card” and prohibit contracts or agreements from prohibiting gasoline retailers and distributors from offering discounts to buyers of gasoline based on method of payment, effective June 17, 2008.

Sec. 42-133gg. Sale or transfer of names of credit cardholders. (a) Except as provided in subsection (b) of this section, no financial institution located in this state issuing credit cards in this state shall sell or transfer the names of any of its credit cardholders to any person or entity seeking such names for the purpose of soliciting such cardholders.

(b) Nothing in this section shall prohibit any financial institution from:

(1) Selling or transferring the names of any of its credit cardholders: (A) As part of the sale, transfer or pledge of some or all of the credit card issuer’s credit card accounts or credit card business; or (B) to a direct or indirect subsidiary of the issuer, a direct or indirect parent of the issuer, or to another subsidiary of a common direct or indirect parent of the issuer;

(2) Transferring the names of any of its credit cardholders to persons or entities providing credit card account processing services, billing services, fraud prevention services, charge-back services, credit reporting services, debt collection services or other account-related services;

(3) Providing the names of any of its credit cardholders to any person that: (A) Provides the issuer with a list of potential customers containing such cardholder’s name, if the cardholder obtained his or her credit card as the result of the issuer’s use of such list in its solicitation efforts; (B) assisted the issuer in attracting, soliciting or persuading such cardholder to apply for or to accept a credit card issued by the issuer; or (C) was a party to a transaction involving the cardholder’s credit card;

(4) Transferring the names of any of its credit cardholders to persons engaged by the credit card issuer to offer its cardholders products or services, provided such person agrees in writing: (A) To keep such names confidential; and (B) to only use such names for the purpose of offering such products or services; or

(5) Transferring or selling the names of any of its credit cardholders to any person or entity, with the permission of such cardholders.

(P.A. 89-264, S. 3; P.A. 96-15, S. 1, 2.)

History: P.A. 96-15 amended Subsec. (a) and added Subsec. (b) to let financial institutions sell or transfer the names of credit cardholders subject to prescribed conditions, effective April 29, 1996.

Sec. 42-133hh. Restriction on information that may be printed on credit and debit card receipts. (a) For the purposes of this section, “person” means any individual, firm, partnership, association, corporation, limited liability company, organization or other entity, but does not include the state or any political subdivision of the state, or any agency thereof.

(b) On and after January 1, 2005, no person who accepts credit cards or debit cards for the transaction of business may print on a receipt provided to the cardholder (1) more than the last five digits of the credit card or debit card account number, or (2) the expiration date of the credit card or debit card.

(c) The provisions of subsection (b) of this section apply only to receipts that are electronically printed and do not apply to transactions in which the sole means of recording the cardholder’s credit card or debit card account number is by handwriting or by an imprint or copy of the credit card or debit card.

(d) Any person who wilfully violates the provisions of subsection (b) of this section shall be fined not more than one hundred dollars for a first offense and not more than five hundred dollars for a second offense, and shall be fined not more than one thousand dollars or be imprisoned not more than six months, or both, for each subsequent offense.

(P.A. 03-156, S. 12.)

Secs. 42-133ii to 42-133ll. Reserved for future use.

Sec. 42-133mm. Sale, transfers or assignment of franchisor’s interest. (a) When a franchisor intends to sell, transfer or assign to another person the franchisor’s interest in a single marketing premises that is not part of two or more marketing premises marketed as a package to sell, transfer or assign more than a single marketing premises, that the franchisee has occupied under a lease, sublease or other grant of authority to occupy such premises, such franchisor shall first: (1) Make a bona fide offer to sell, transfer or assign to the franchisee such franchisor’s interests in such single marketing premises; or (2) if applicable, offer the franchisee a right of first refusal of a bona fide offer made by another acceptable to the franchisor, to purchase such franchisor’s interest in such single marketing premises. The franchisee shall have forty-five days in which to accept or reject such offer made under subdivision (1) or (2) of this subsection.

(b) When a franchisor sells, transfers or assigns the franchisor’s interest in two or more marketing premises marketed as a package to a successor owner, any change in the terms and conditions of the franchise agreement in effect at the time of the sale, transfer or assignment shall be by mutual agreement of the franchisee and the successor owner. Such successor owner shall, at the expiration of the franchise agreement in effect at the time of the sale, transfer or assignment, renew the franchise agreement of each franchisee for the same number of years as the agreement in effect at the time of the sale, transfer or assignment, provided such renewal shall not exceed five years. Any changes to the franchise agreement shall be submitted in good faith by the successor owner and negotiated in good faith by the successor owner and the franchisee. The successor owner shall not require the franchisee to do the following: (1) Take part in promotional campaigns of the successor owner’s products; (2) meet sales quotas; (3) sell any product at a price suggested by the successor owner or supplier; (4) keep the premises open and operating during hours which are documented by the franchisee to be unprofitable to the franchisee or during the hours after ten o’clock p.m. and prior to six o’clock a.m.; or (5) disclose to the successor owner or supplier financial records of the operation of the franchise which are not related or necessary to the franchisee’s obligations under the franchise agreement. Nothing in this subsection shall affect the successor owner’s ability to terminate, cancel or fail to renew a franchise agreement for good cause shown.

(c) If such successor owner intends to sell, transfer or assign to another person such successor owner’s interest in the marketing premises that the franchisee has occupied under a lease, sublease or other grant of authority to occupy such premises, the new owner shall first (1) make a bona fide offer to sell, transfer or assign to the franchisee such successor owner’s interest in the marketing premises; or (2) if applicable, offer the franchisee a right of first refusal of a bona fide offer made by another acceptable to the successor, to purchase such successor owner’s interest in such marketing premises. The franchisee shall have forty-five days in which to accept or reject such offer made under subdivision (1) or (2) of this subsection.

(d) For the purposes of this section, “marketing premises” means premises which, under a franchise agreement, are to be employed by a franchisee in connection with the sale, consignment or distribution of motor fuel.

(e) The provisions of this section shall apply to any franchise agreement in effect on or after July 1, 2000.

(P.A. 00-176, S. 1, 2; P.A. 01-195, S. 95, 181; P.A. 06-196, S. 168.)

History: P.A. 00-176 effective July 1, 2000; P.A. 01-195 made technical changes in Subsec. (b), effective July 11, 2001; P.A. 06-196 made technical changes in Subsec. (b), effective June 7, 2006.