EXISTENCE OF TENNESSEE DEALER/FRANCHISE TERMINATION, FRAUD AND NON-RENEWAL LAWS AND FRANCHISE INDUSTRY-SPECIFIC LAWS

In Tennessee, the following Dealer/Franchise Termination and Non-Renewal Laws, Fraud, and Franchise Industry-Specific Laws exist:

– Tennessee Has No Disclosure/Registration Franchise Law
– Tennessee Has a Hybrid Relationship/Termination Franchise Law
– Tennessee Has a Hybrid Business Opportunity Franchise Law
– Tennessee Has an Alcoholic Beverage Wholesaler/Franchise Law
– Tennessee Has an Equipment Dealer/Franchise Law
– Tennessee Has a Gasoline Dealer/Franchise Law
– Tennessee Does Not Have a Marine Dealer/Franchise Law
– Tennessee Has a Motor Vehicle Dealer/Franchise Law
– Tennessee Has a Motorcycle Dealer/Franchise Law
– Tennessee Does Not Have a Recreational and Power Sports Vehicle Dealer/Franchise Law
– Tennessee Does Have a Restaurant Liability Law

Tennessee does not have a dedicated franchise relationship act; however, Tennessee’s "Little FTC Act" explicitly covers franchises, distributorships, and business opportunities. (Tennessee Code Annotated, Title 47, Chapter 18, Sections 47-18-101 through 47-18-117.) This is because the definition of "consumer" under the TFTCA includes any person who purchases or is offered for sale "a franchise or distributorship agreement or any similar type of business opportunity."

The TFTCA proscribes passing off goods or services as those of another, causing confusion as to affiliation or connection with another, misrepresenting the grade or quality of goods or services, selling a right to participate in a pyramid distributorship, and employing a chain referral sales plan in which a purchaser receives compensation for furnishing names of other prospective buyers when compensation is contingent upon a subsequent event.

The TFTCA also provides damages, declaratory and injunctive relief for any person suffering an ascertainable loss of money or property . Treble damages are available for willful or knowing violations.

In Tennessee, the following Dealer/Franchise Termination, Fraud and Non-Renewal Laws, and Franchise Industry-Specific Laws, are identified as follows:

Tennessee State Franchise Disclosure/Registration Laws
No Tennessee franchise statute of general applicability. Franchisors must comply with the FTC franchise disclosure rule
Tennessee State Franchise Relationship/Termination Laws
The Tennessee Consumer Protection Act expressly covers franchises and prohibits certain activities including passing off goods as those of another
Tennessee Code Annotated, Title 47, Chapter 18, Sections 47-18-101 through 47-18-117

Tennessee State Business Opportunity Laws
The Tennessee Consumer Protection Act expressly covers distributorships and business opportunities
Tennessee Code Annotated, Title 47, Chapter 18, Sections 47-18-101 through 47-18-117

Tennessee Alcoholic Beverage Franchise/Wholesaler Laws
Tennessee alcoholic beverages law (termination); Tennessee alcoholic beverages relationship/termination law; Tennessee beer law
Tenn. Code Ann. §57-3-301,Tenn. Code Ann. §47-25-1501 to § 47-25-1511, Tenn. Code Ann. §57-5-501 to §57-5-512.

Tennessee Equipment Franchise/Dealer Laws
Tennessee farm implements, industrial equipment, machinery Franchise/Dealer law
Tenn. Code Ann. §47-25-1301 to §47-25-1314

Tennessee Gasoline Franchise/Dealer Laws
Tennessee petroleum trade practices law
Tenn. Code Ann. §47-25-601 to §47-25-612

Tennessee Marine Franchise/Dealer Laws
Tennessee Has No Franchise Specific Law in this Market Niche

Tennessee Motor Vehicle Franchise/Dealer Laws
Tennessee motor vehicle Franchise/Dealer financing law; Tennessee motor vehicle manufacturer licensing law
Tenn. Code Ann. §55-13-103,§55-17-114

Tennessee Motorcycle Franchise/Dealer Laws
Tennessee Motorcycles and Off-Road Vehicles Franchise/Dealer Fairness Act
Tenn. Code Ann. §47-25-1901 to §47-25-1914

Tennessee Recreational and Powersports Vehicle Franchise/Dealer Laws
Tennessee Has No Franchise Specific Law in this Market Niche

Tennessee Restaurants
Tennessee restaurants liability law
Tenn. Code Ann. § 29-34-205.

Conner v. Hardee's Food Systems, Inc., United States Court of Appeals, Sixth Circuit.March 6, 200365 Fed.Appx. 19, 2003 WL 932432 (“Tennessee Consumer Protection Act, The Tennessee Consumer Protection Act, Tenn.Code Ann. § 47–18–101 et seq. (1995 & Supp.2000) (the TCPA), prohibits “[u]nfair or deceptive acts or practices affecting the conduct of any trade or commerce” id. § 47–18–104(a), and in particular, “any ... act or practice which is deceptive to the consumer or to any other person.” § 47–18–104(b)(27). The district court held that “after scrutinizing the evidence offered by Plaintiffs in the most favorable light” there is no TCPA violation. We agree. 5 Plaintiffs identify three violations of the TCPA. First, they allege that the TCPA was violated when Hardee's granted them conditional approval to become a franchisee and then refused to grant final approval because of its desire to build a company-owned store at the Plaintiffs' suggested location. As discussed above, Hardee's never granted Plaintiffs conditional approval to become a franchisee. Hardee's merely granted Plaintiffs conditional operational approval. Accordingly, this first alleged violation must fail. 6 Second, Plaintiffs allege that Hardee's agents violated the TCPA when they repeatedly made false statements regarding Hardee's intention to develop company-owned restaurants in Sevier County. As discussed above, Plaintiffs admitted that Hardee's limited their statements with a “to their knowledge” qualifier. Thus, because Plaintiffs are unable to prove that Hardee's agents made any false statements, Hardee's cannot be found to have engaged in unfair or deceptive practices. 7 Last, Plaintiffs contend that Hardee's violated the TCPA by appropriating Plaintiffs' real estate knowledge. The district court found this “suggestion implausible *26 under the circumstances.” The court also found that the information supplied by Plaintiffs was not confidential business information—but merely “booster” information. For purposes of this appeal, we accept as true that prior to the submission of their preliminary site applications, Plaintiffs informally gave Hardee's agents their suggested locations for a franchise. Having made this assumption in Plaintiffs' favor, the essential question is whether Hardee's appropriated that information. There can be no liability merely because Hardee's possessed certain information; Plaintiffs must point to some evidence that Hardee's unfairly used the information. The testimony of Robert Leedy, one of the realtors working with Hardee's development team to locate potential sites for a company-owned restaurant, clearly shows that Hardee's did not appropriate Plaintiffs' real estate information. The following series of questions is highly probative on this issue: Q: Did any of the Hardee's representatives, when they came to meet you, suggest specific sites to you that you hadn't already shown them in some form or other? A: No. * * * * * * Q: Do you recall a situation where a Hardee's representative phoned you up and said, we'd like to think about X location, with respect to a location that you hadn't identified on one of your tours? A: We're talking Sevier County? Q: That's correct. A: No. No. I don't recall that. Plaintiffs have not directed this court to any evidence to dispute this testimony. Accordingly, the only reasonable inference that can be drawn is that although Hardee's may have possessed Plaintiffs' proposed preliminary sites, it made no use of them.5 Therefore, Plaintiffs have failed to establish any violation of the TCPA. AFFIRMED.“)

Top Rated Franchise Attorney Avvo Franchise Lawyer Symbol Avvo Franchise Lawyer Antitrust Symbol Finance Monthly Global Award Winner Lead Counsel logo BBB of Washington DC Washington DC Chamber of Commerce Lawyers of Distinction logo

Contact Us

Goldstein Law Firm, PLLC

1629 K St. NW, Suite 300,
Washington, DC 20006

Phone: 202-293-3947
Fax: 202-315-2514

Free Consultation

Free Consultation