In Michigan, the following Dealer/Franchise Termination and Non-Renewal Laws, Fraud, and Franchise Industry-Specific Laws exist:
- Michigan Has a Disclosure/Registration Franchise Law
- Michigan Has a Relationship/Termination Franchise Law
- Michigan Does Have a Hybrid Business Opportunity Franchise Law
- Michigan Has an Alcoholic Beverage Wholesaler/Franchise Law
- Michigan Has an Equipment Dealer/Franchise Law
- Michigan Has a Gasoline Dealer/Franchise Law
- Michigan Has a Marine Dealer/Franchise Law
- Michigan Has a Motor Vehicle Dealer/Franchise Law
- Michigan Does Not Have a Motorcycle Dealer/Franchise Law
- Michigan Does Have a Recreational and Power Sports Vehicle Dealer/Franchise Law
- Michigan Does Have a Restaurant Liability Law
Michigan regulates franchise terminations, non-renewals and transfers in the Michigan Franchise Investment Law (“MFIL”) by identifying and prohibiting certain contractual provisions as void and unenforceable. Section 445.1527 of the MFIL declares that the following provisions are void and unenforceable in franchise documents: (a) A prohibition on the right of a franchisee to join an association of franchisees; (b) A requirement that a franchisee assent to a release, assignment, novation, waiver, or estoppel which deprives a franchisee of rights and protections provided in the MFIL, with a note that this requirement does not prevent a franchisee, after entering into a franchise agreement, from settling claims; (c) A provision that permits a franchisor to terminate a franchise prior to the expiration of its term except for “good cause”.
The MFIL defines “good cause as including the failure of the franchisee to comply with any lawful provision of the franchise agreement and to cure such failure after being given written notice thereof and a reasonable opportunity, which in no event need be more than 30 days, to cure such failure; (d) A provision that permits a franchisor to refuse to renew a franchise without fairly compensating the franchisee by repurchase or other means for the fair market value at the time of expiration of the franchisee's inventory, supplies, equipment, fixtures, and furnishings. With regard to compensation, the MFIL states that “Personalized materials” which have no value to the franchisor and inventory, supplies, equipment, fixtures, and furnishings “not reasonably required in the conduct of the franchise business” are not permitted bases upon which to obtain compensation. Further, this non-renewal compensation subsection applies under the MFIL only if: (i) The term of the franchise is less than 5 years and (ii) the franchisee is prohibited by the franchise or other agreement from continuing to conduct substantially the same business under another trademark, service mark, trade name, logotype, advertising, or other commercial symbol in the same area subsequent to the expiration of the franchise or the franchisee does not receive at least 6 months advance notice of franchisor's intent not to renew the franchise; (e) A provision that permits the franchisor to refuse to renew a franchise on terms generally available to other franchisees of the same class or type under similar circumstances. The MFIL explicitly states that “this section does not require a renewal provision”; (f) A provision requiring that arbitration or litigation be conducted outside this state. This shall not preclude the franchisee from entering into an agreement, at the time of arbitration, to conduct arbitration at a location outside this state; (g) A provision which permits a franchisor to refuse to permit a transfer of ownership of a franchise, except for “good cause”, which does not prevent a franchisor from exercising a right of first refusal to purchase the franchise. “Good cause” for this provision includes, but is not limited to: (i) The failure of the proposed transferee to meet the franchisor's then current reasonable qualifications or standards; (ii) The fact that the proposed transferee is a competitor of the franchisor or subfranchisor; (iii) The unwillingness of the proposed transferee to agree in writing to comply with all lawful obligations; (iv) The failure of the franchisee or proposed transferee to pay any sums owing to the franchisor or to cure any default in the franchise agreement existing at the time of the proposed transfer; (h) A provision that requires the franchisee to resell to the franchisor items that are not uniquely identified with the franchisor, noting that this directive does not prohibit a provision that grants to a franchisor a right of first refusal to purchase the assets of a franchise on the same terms and conditions as a bona fide third party willing and able to purchase those assets, nor does this subdivision prohibit a provision that grants the franchisor the right to acquire the assets of a franchise for the market or appraised value of such assets if the franchisee has breached the lawful provisions of the franchise agreement and has failed to cure the breach in the manner provided in subdivision (c); (i) A provision which permits the franchisor to directly or indirectly convey, assign, or otherwise transfer its obligations to fulfill contractual obligations to the franchisee unless provision has been made for providing the required contractual services.
In Michigan, the following Dealer/Franchise Termination, Fraud and Non-Renewal Laws, and Franchise Industry-Specific Laws, are identified as follows:
Michigan State Franchise Disclosure/Registration Laws
Michigan Franchise Investment Law
Michigan Compiled Laws, Chap. 445, Sec. 445.1501 through 445.1545
Michigan State Franchise Relationship/Termination Laws
Michigan Franchise Investment Law (component of)
Michigan Compiled Laws, Chap. 445, Sec. 445.1527
Michigan State Business Opportunity Laws
Michigan Consumer Protection Act (component of regards business opportunities)
Michigan Compiled Laws, Chap. 445, Sec. 445.902 and 445.903b
Michigan Alcoholic Beverage Wholesaler Laws
Michigan beer law, Michigan wine law
Mich. Comp. Laws §436.1401 to §436.1403,Mich. Comp. Laws §436.1305 to §436.1307
Michigan Equipment Franchise/Dealer Laws
Michigan farm and utility equipment Franchise/Dealer law
Mich. Comp. Laws §445.1451 to §445.1460 .
Michigan Gasoline Franchise/Dealer Laws
Michigan Motor Fuel Distribution Act
Mich. Comp. Laws §445.1801 to §445.1808.
Michigan Marine Franchise/Dealer Laws
Michigan watercraft Franchise/Dealer law
Mich. Comp. Laws §445.541 to §445.547.
Michigan Motor Vehicle Franchise/Dealer Laws
Michigan automobile Franchise/Dealer law
Mich. Comp. Laws Chap. §445.1561 to §445.1583
Michigan Motorcycle Franchise/Dealer Laws
There is no franchise termination or relationship law in this specific market niche in Michigan.
Michigan Recreational and Powersports Vehicle Franchise/Dealer Laws
Michigan Recreational Vehicle Franchise Act
Mich. Comp. Laws §445.1921 to §445.1949.
Michigan restaurants liability law
NBT Associates, Inc. v. Allegiance Ins. Agency CCI, Inc., United States District Court, E.D. Michigan, Southern Division, December 9, 2011, 2011 WL 6122775 (“Plaintiffs present two arguments contesting the legality of the Release Agreement, both of which are unavailing. First, Counter–Plaintiffs assert that the release is invalid under Section 27 of the MFIL, which provides that “[a] requirement that a franchisee assent to a release, assignment, novation, waiver, or estoppel which deprives a franchisee of rights and protections provided in this act” is “void and unenforceable if contained in any documents relating to a franchise.” Mich. Comp. Laws § 445.1527(b). However, it is highly questionable that the Release Agreement is a “document [ ] relating to a franchise” within the meaning of Section 27. Id. The MFIL's application is limited to “all written or oral arrangements between a franchisor and franchisee in connection with the offer or sale of a franchise.” Id. § 445.1504 (emphasis added). Thus, while Section 27(b) undoubtedly applies when a franchisor requires a franchisee to release its MFIL claims as a condition of the franchise agreement, it specifically states that this prohibition “shall not preclude a franchisee, after entering into a franchise agreement, from settling any and all claims.” Id. § 445.1527(b); cf. Franchise Mgmt. Unlimited, Inc. v. Am.'s Favorite Chicken, 221 Mich.App. 239, 561 N.W.2d 123, 128 (Mich.Ct.App.1997) (describing Section 27(b) of the MFIL as declaring void and unenforceable “a requirement [in a franchise agreement ] that a franchisee assent to a release” (alteration in original) (emphasis added) (quoting Mich. Comp. Laws § 445.1527(b))). In this case, the franchisees executed the Release Agreement more than two years after entering the franchise agreement, and the release of their MFIL claims was made in exchange for the waiver of certain fees they would otherwise be required to pay under the franchise agreement. Under these circumstances, the Release Agreement is akin to a “settl[ement] of any and all claims” rather than a “document[ ] relating to a franchise.” Mich. Comp. Laws § 445.1527(b); see Hill v. D.O.C. Optics Corp., Nos. 180042, 181656, 1997 WL 33349404, (Mich.Ct.App. Apr.18, 1997) (unpublished per curiam opinion) (upholding under Section 27(b) a release executed more than six years after the parties entered into the franchise agreement). Counter–Plaintiffs attempt to avoid this conclusion by arguing that Section 27(b)'s exception is limited to the settlement of claims “arising under ... franchise agreements, as opposed to rights, protections or violations of the MFIL itself.” (Resp. Opp'n Mot. Summ. J. 23.) This contention is directly contradicted by the plain language of Section 27(b), which expressly allows the “settling [of] any and all claims.” Mich. Comp. Laws § 445.1527(b) (emphasis added). Similarly specious is Counter–Plaintiffs' assertion that permitting releases of the kind at issue here would render Section 27(b) “useless” because “every franchisor would simply sign a franchise agreement, and then subsequently require the franchisee to sign an agreement containing a waiver or release.” (Resp. Opp'n Mot. Summ. J. 23.) Such a scheme to circumvent the MFIL is not in evidence in the present case, where the franchisees agreed to waive their claims in return for a tangible legal benefit, namely, relief from paying franchise fees. Moreover, the conduct Counter–Plaintiffs warn against likely would be precluded by Section 27(b), as a release executed contemporaneously with a franchise agreement and involving no additional consideration would likely be considered a “document[ ] relating to a franchise.” Mich. Comp. Laws § 445.1527(b). Section 27(b) of the MFIL does not bar enforcement of the Release Agreement. Second, Counter–Plaintiffs maintain that the Release Agreement fails for lack of consideration. That is, Counter–Plaintiffs contend that, because Counter–Defendants violated Section 8 of the MFIL, they were entitled to rescission of the franchise agreements under Section 31 of the MFIL, see Mich. Comp. Laws § 445.1531(1), and, consequently, Counter–Defendants' promise not to collect fees due under those agreements was “[t]he relinquishment of an invalid claim” that serves as “insufficient consideration where ... the claimant does not have an honest or reasonable belief in the validity of the claim,” Schram v. Dederick, 42 F.Supp. 525, 527 (E.D.Mich.1941). This argument necessarily assumes that Counter–Plaintiffs can establish a violation of Section 8, a proposition that is speculative even now in the midst of litigation; a purported violation could only have been more nebulous in September 2009, when Counter–Plaintiffs were still operating as Advasure franchises and abiding by the franchise agreements. See Barwin v. Frederick & Herrud, Inc., 62 Mich.App. 280, 233 N.W.2d 258, 262 (Mich.Ct.App.1975) (“Surrender of even doubtful claims upon honest and reasonable belief in the validity of such claims is legal detriment amounting to consideration.”). Regardless, even if Counter–Defendants violated Section 8 in offering to sell the Advasure franchise and executing the franchise agreements, the Michigan Court of Appeals has held that noncompliance with Section 8 does not render a franchise agreement void and unenforceable. Maids Int'l, Inc. v. Saunders, Inc., 224 Mich.App. 508, 569 N.W.2d 857, 858 (Mich.Ct.App.1997). When faced with a Section 8 violation, a franchisee may pursue damages or rescission under Section 31, but the franchise agreement remains in force and effect, at least until it is actually rescinded by a court. See id. When the parties executed the Release Agreement, Counter–Defendants could seek legal enforcement of their right to collect the fees due under the franchise agreements, so excusing payment of those fees constituted adequate consideration. Thus, Counter–Plaintiffs validly waived their Section 8 claim under the Release Agreement,1 and the court will grant summary judgment to Counter–Defendants on the counterclaim and third-party complaint.“)
Victory Lane Quick Oil Change, Inc. v. Hoss, United States District Court, E.D. Michigan, Southern Division, September 28, 2001, 2001 WL 1219152 (“B. THE MFIL DOES NOT RENDER SECTIONS 18.7 AND 19 OF THE PARTIES' FRANCHISE AGREEMENT VOID AND UNENFORCEABLE. The primary basis for Defendants' Motion for Partial Summary Judgment on Plaintiff's claim for Specific Performance (Count III of Plaintiff's Complaint) is Defendants' contention that, by application of the Michigan Franchise Investment Law, Sections 18.7 and 19 of the Franchise Agreement are void and unenforceable. These sections provide, in pertinent part: 18.7 Right of First Refusal of Franchisor. If You or Your Owners propose to sell the Center (or its assets)... and a bona fide, executed written offer to purchase one or more of these interests is received, You are obligated to deliver a copy of the bona fide offer to Us along with all documents to be executed in connection with the proposed transfer. We will, for a period of thirty (30) days from the date of delivery of this offer to Us, have the right, exercisable by written notice to You, to purchase the Center (or its assets) or such ownership interest for the price and on the terms and conditions contained in the offer.... This paragraph will not apply to transfers made in accordance with Paragraph 18.3 of this Agreement [i.e., transfers to a corporation or partnership actively managed by the franchisee and in which the franchisee's ownership interest and right to control exceeds 50%]. 19. OPTION TO PURCHASE CENTER 19.1 Option. Upon the termination or expiration of this Agreement, We shall have an exclusive option, but not the obligation, exercisable for thirty (30) days to purchase the assets of the Center. For purposes of this paragraph, the term “assets” shall mean the equipment, inventory, leasehold interests and improvements and favorable rights and covenants of the Center.
19.5 Realty. In the event You own the realty on which the Center is located, We will also have the option to purchase the real estate for a period of thirty (30) days following expiration or termination of this Agreement. The purchase price shall be fair market value.... If We do not elect to purchase the real property, We or Our designee will have the option to enter into a lease for a term of ten (10) years with an option by the lessee to extend the term of the lease for an additional term of five (5) years.... [Exhibit 1, pp. 24-27.] Defendants contend that these provisions are rendered void and unenforceable under the Michigan Franchise Investment Law, M.C.L. § 445.1501 et seq.. Specifically, Defendants argue that the Paragraph (h) of the MFIL Notice appended to the Franchise Agreement voided Sections 18.7 and 19. Paragraph (h) of the MFIL Notice provided as follows: Each of the following provisions is void and unenforceable if contained in any documents relating to a franchise: (h) A provision that requires the franchisee to resell to the franchisor items that are not uniquely identified with the franchisor. This subdivision does not prohibit a provision that grants to a franchisor a right of first refusal to purchase the assets of a franchise on the same terms and conditions as a bona fide third party willing and able to purchase those assets, nor does this subdivision prohibit a provision that grants the franchisor the right to acquire the assets of a franchise for the market or appraised value of such assets if the franchisee has breached the lawful provisions of the franchise agreement and has failed to cure the breach in the manner provided in subdivision (c) [i.e., after being given notice of breach, franchisee is afforded a “reasonable opportunity” (up to 30 days) to cure.] [See Defendants' Reply Brief, Ex. 1. See also, M..C.L. §§ 445.1508(3)(ii) and 445.1527(h).] Defendants argument is that since the assets at issue here were not “items uniquely identified with the franchisor,” i.e., trademarks, logos, signage, catalogs, manuals, etc.,6 it is only if Sections 18.7 and 19 fit squarely within one of the two stated “exceptions” in Paragraph (h) of the MFIL Notice that Plaintiff would be entitled to lawfully exercise its option to purchase. Defendants' position is that neither of the exceptions applies in this case. The two exceptions to the MFIL's prohibition against contractual provisions which require a franchisee to sell the assets of the franchise business not uniquely identified with the franchisor back to the franchisor are: (1) a provision that grants to a franchisor a right of first refusal to purchase the assets of a franchise on the same terms and conditions as a bona fide third party willing and able to purchase those assets, and (2) a provision that grants the franchisor the right to acquire the assets of a franchise for the market or appraised value of such assets if the franchisee has breached the lawful provisions of the franchise agreement and has failed to cure the breach within a reasonable time after being given notice of the breach. M.C.L. § 445.1527(h); MFIL Notice paragraph (h), Defendants' Reply Brief, Ex. 1. Defendants contend that the first exception which allows a franchisor a right of first refusal to purchase the assets “on the same terms and conditions as a bona fide third party willing and able to purchase those assets,” does not apply because they claim that “none of the franchise assets have been sold to a bona fide third party willing and able to purchase the assets.” [Defendants' Brief, p. 8.] Stated otherwise, the Defendants' position is that a right of first refusal must first be triggered by an offer to purchase the property by a bona fide purchase or by its sale to a bona fide purchaser. As explained by the Michigan Court of Appeals in LaRose Market, Inc. v. Sylvan Center, Inc., 530 N.W.2d 505 (Mich.App.1995): [For] purposes of a right of first refusal, a “sale” occurs upon the transfer (a) for value (b) of a significant interest in the subject property (c) to a stranger to the lease, (d) who thereby gains substantial control over the leased premises. Id. at 509, quoting Prince v. Elm Investment Co., Inc., 649 P.2d 820, 823 (Utah 1982). Defendants argue that here Defendant John Hoss, Jr., the franchisor, never received any “offer to purchase” nor has he “sold” the business or its assets to anyone; rather he has “gifted” the assets to his son, John Hoss, III. Defendants' argument is not borne out by the record of this case. As indicated above, Mr. Hoss stated in his sworn interrogatory answers that he transferred ownership of the business to his son, John Hoss, III, pursuant to an “oral agreement of partial gift and partial sale,” and that the final consideration which his son will pay him for the partial sale “has not yet been determined” although he will be paid in installments “over time.” [See Plaintiff Answer to Interrogatory No. 9, Plaintiff's Ex. 8.] *9 That the transfer was only a “partial” sale does not permit Defendant Hoss to escape from the contract. As the court in Prince v. Elm Investment Co., supra, found: The holder of a right of first refusal has negotiated for a right to purchase ahead of any other buyer if the promisor-owner decides to sell. We see no reason to limit the application of that right to a sale of the promisor-owner's entire interest. The more reasonable approach is to allow the holder to exercise its right of first refusal to the extent of any significant transfer of ownership or control to an unrelated third party. 649 P.2d at 821. Furthermore, Defendants attempt to rely on the “no sale, just a gift” argument is a particularly procrustean one in light of the fact that by transferring the assets of the business to John Hoss, III and/or Lyon Lube-regardless of the mechanism used to effectuate that transfer-Mr. Hoss directly violated Section 18.2 of the Franchise Agreement, which provides: This Agreement is personal to You and to Your Owners and, as a result, neither You nor any of Your Owners may transfer any interest in this Agreement... except as specifically authorized by this Agreement. During the term of this Agreement, You are not permitted to transfer ownership of the Center or the assets used in the operation of the Center except in connection with a transfer of this Agreement which we have approved. Neither You nor any of Your Owners are permitted to pledge, assign, or encumber this Agreement of Your interest in the corporation if you are corporation or a partnership. Any unauthorized attempt to transfer any of these interests shall have no effect and shall be a material breach of this Agreement. Franchise Agreement, § 18.2, Ex. 1, pp. 21-22 (emphasis added). Moreover, the Michigan Court of Appeals, in discussing the Prince case in LaRose Market, supra, recognized that bad faith and wrong doing could trigger a right of first refusal. As the Prince court observed, a seller whose property is burdened by a right of first refusal has a duty to deal in good faith with the holder of the right. The court explained: [I]n order to meet the... requirement of good faith, a seller desiring to sell property burdened by a right of first refusal must (1) give the promisee of the right of first refusal notice of the third party's offer and his intention to accept that offer; (2) allow the promisee to submit a competing offer; and (3) reject the promisee's offer only on the basis of a reasoned explanation of why tat offer is materially inferior to the third party's offer. 649 P.2d at 826. Defendant Hoss has clearly failed his requirement of dealing in good faith with Plaintiff. As for the real estate on which the Victory Lane business is located, while Defendants do not dispute that at the time the Franchise Agreement was still in effect, Mr. Hoss transferred title to the property to a revocable living trust (without notification to, or the consent of, Victory Lane), they argue that the option to purchase the real estate is not enforceable because his wife, Donna Hoss, was not a party to the Franchise Agreement in which the option to purchase the real estate was created. Hoss does not assert that the property on which he maintained the Victory Lane franchise was held in the entireties or jointly with his wife. Rather, he appears to take the position that because he is married, his wife has a dower interest in the property which cannot be conveyed without her consent. Therefore, Defendants reason that the option to purchase provisions in the Franchise Agreement are unenforceable. In support of this argument, Defendants cite Slater Management Corp. v. Nash, 212 Mich.App. 30, 32, 536 N.W.2d 843, 845 (1995) and Berg-Powell Steel Co. v. Hartman Group, Inc., 89 Mich.App. 423, 427-428, 280 N.W.2d 557, 559 (1979). Neither of these cases, however, involved the validity of a right of first refusal or an option to purchase. Rather, both cases had to do with the validity of real estate purchase agreements signed only by one spouse. The purchasers were allowed to withdraw from the purchase agreements because their wives' signatures were not on the agreements. Here, we are dealing only with the validity of a right of first refusal and an option to purchase, not the final closing sale documents. Mrs. Hoss's dower interest in the property does not render the right of first refusal or option to purchase void. For all of the foregoing reasons, the Court finds no basis for holding the right of first refusal and option to purchase provisions in the Franchise Agreement void and unenforceable under the Michigan Franchise Investment Law.”)
Drery v. Marathon Oil Corp., Court of Appeals of Michigan.September 25, 1998, 1998 WL 1989877 (fn.13 – “We recognize that the our Supreme Court has granted leave to appeal in Franchise Mgmt, supra and that the MFIL has been interpreted as creating a private cause of action for violations of M.C.L. § 445.1527; MSA 19.854(27) See General Aviation, Inc v. Cessna Aircraft Co, 915 F.2d 1038, 1044 (CA 6, 1990) (allowing an action for damages to proceed under M.C.L. § 445.1527; MSA 19.854(27)). Subsequently, in Geib v. Amoco Oil Co, 29 F3d 1050, 1060–1061 (CA 6, 1994), the United States Court of Appeals for the Sixth Circuit, again faced with the issue of the viability of private actions under M.C.L. § 445.1527 of the MFIL, discussed Cessna, supra, and noted that the district court in Geib had followed M.C.L. § 445.1534; MSA 19.854(34), quoted supra. The Geib court stated that “[t]he direct conflicts between these interpretations of Michigan law within the federal system, viewed in conjunction with the substantiality of the competing arguments,” led it to certify the question to the Michigan Supreme Court. The Michigan Supreme Court declined to answer the question at that time. See In re Certified Question (Geib v Amoco Oil Co), 447 Mich. 1216 (1994). It appears that the Court will soon address the matter in Franchise Mgmt.”)
Vaughn v. Digital Message Systems Corp., United States District Court, E.D. Michigan, March 10, 1997, 1997 WL 115821 (“Having found that the relationship between the parties was a franchise subject to regulation under the MFIL, the Court will next determine if Defendants complied with the MFIL notice and disclosure requirements. 2. What the MFIL Requires. The MFIL provides that: (1) A franchise shall not be sold in this state without first providing to the prospective franchisee, at least 10 business days before the execution by the prospective franchisee of any binding franchise or other agreement or at least 10 business days before the receipt of any consideration, whichever occurs first, a copy of the disclosure statement described in subsection (2), the notice described in subsection (3), and a copy of all proposed agreements relating to the sale of the franchise. M.C.L.A. § 445.1508(1).
Subsection 2 requires, incident to a franchise, a disclosure statement which contains the following:
(a) The name of the franchisor....
(b) The franchisor's principal business address and the name and address of its agent in this state authorized to receive process.
(c) The business form of the franchisor....
(d) The information concerning the identity and business experience of persons affiliated with the franchisor ....
(e) A statement whether any person identified in the disclosure statement:
(i) Has been convicted of a felony....
(ii) Is subject to a currently effective order of the United States securities and exchange commission or the securities administrator of a state....
(iii) Is subject to a currently effective order or ruling of the federal trade commission.
(iv) Is subject to a currently effective injunctive or restrictive order relating to business activity as a result of an action brought by a public agency or department
(f) The length of time the franchisor has conducted a business of the type to be operated by the franchisees for the business, and has granted franchises in other lines of business.
(g) A recent financial statement of the franchisor, together with a statement of material changes in the financial condition of the franchisor from the date thereof....
(h) A copy of the typical current franchise contract or agreement proposed for use or in use in this state
(i) A statement of the franchise fee charged, the proposed application of the proceeds of such fee by the franchisor, and the formula by which the amount of the fee is determined if the fee is not the same in all cases.
(j) A statement describing payments or fees other than franchise fees that the franchisee or subfranchisor is required to pay to the franchisor....
(k) A statement of the conditions under which the franchise agreement may be terminated or renewal refused or repurchased at the option of the franchisor.
(l) A statement as to whether, by the terms of the franchise agreement or by other device or practice, the franchisee or subfranchisor is required to purchase from the franchisor ... services, supplies, products, fixtures, or other goods relating to the franchise business, together with a description, and the terms and conditions thereof.
*8 (m) A statement as to whether, by the terms of the franchise agreement or other device or practice, the franchisee is limited in the goods or services offered by the franchisee to customers.
(n) A statement of the terms and conditions of a financing arrangement when offered directly or indirectly by the franchisor or an agent or affiliate of the franchisor.
(o) A statement of past or present practice or of intent of the franchisor to sell, assign, or discount to a third party a note, contract, or other obligation of the franchisee or subfranchisor in whole or in part.
(p) A copy of a statement, if any, of estimated or projected franchisee earnings prepared for presentation to prospective franchisees or subfranchisors, or other persons, together with a statement setting forth the data upon which the estimation or projection is based.
(q) A statement of any compensation or other benefit given or promised to a public figure....
(r) A statement of the total number and location of franchises presently operating and the proposed total to be sold in this state.
(s) A statement as to whether franchisees or subfranchisors receive an exclusive area or territory.
(t) Other relevant information as the franchisor may desire to present.
M.C.L.A. § 445.1508(2).
Finally, Subsection 3 states that “[t]he notice required in subsection (1) shall be on a separate sheet immediately following the cover sheet and shall contain all of the following:
(i) In 12–point boldface type: “The state of Michigan prohibits certain unfair provisions that are sometimes in franchise documents. If any of the following provisions are in these franchise documents, the provisions are void and cannot be enforced against you. An exact copy of the items prohibited in section 27.
(iii) In 12–point boldface type: “The fact that there is a notice of this offering on file with the attorney general does not constitute approval, recommendation, or endorsement by the attorney general.
(iv) If the franchisor is subject to the escrow provisions of section 12, a statement describing the right of the franchisee to request an escrow arrangement.
(v) A statement that any questions regarding the notice should be directed to the [Commerce] department along with the address and phone number of the department.
M.C.L.A. § 455.1508(3). Although all of section 27 must appear, the most pertinent part provides that:
Each of the following provisions is void and unenforceable if contained in any documents relating to a franchise ...
(d) A provision that permits a franchisor to refuse to renew a franchise without fairly compensating the franchisee by repurchase or other means for the fair market value at the time of expiration of the franchisee's inventory, supplies, equipment, fixtures, and furnishings.
M.C.L.A. § 445.1527.
Defendants do not dispute, and the Court also finds, that Defendants failed to meet the requirements stated above. Indeed, although the terms of the Agreement itself and the summary disclosure form meet some of the requirements of § 445.1508, it is clear that Defendants made no attempt to comply with subparts (b), (e), (g), (i), (o), (p), (q), and (r) of section 2 and all of section 3.6 Cf. M.C.L.A. § 445.1508 with (Plaintiffs' MSJ, Ex. 3) and (Plaintiffs' Response, Ex. 1). Therefore, there is no genuine issue of material fact and Plaintiffs are entitled to judgment as a matter of law on Count I of their Complaint.”)
Franchise Management Unlimited, Inc. v. America's Favorite Chicken, Court of Appeals of Michigan.January 24, 1997221 Mich.App. 239561 N.W.2d 123 (“The first question we must answer is whether plaintiffs' failure to provide the release fits within any of the four examples of good cause set forth in the statute.2 We believe plaintiffs' failure to provide the contractually **127 agreed-upon release fits within § 27(g)(iv). This section states that a franchisor has good cause not to approve a transfer if, at the time of the proposed transfer, the franchisee has failed to cure any default in the franchise agreement. Section XIII(A) of the franchise agreement provides that the franchisee *246 shall be in default if it fails to substantially comply with any of the requirements imposed by the franchise agreement. One of the requirements of the franchise agreement was for plaintiffs to provide a release of any and all claims before defendant was obligated to approve a transfer. Plaintiffs refused to provide a release at the time of the proposed transfer. Thus, plaintiffs were in default under the franchise agreement, and under § 27(g)(iv), defendant had statutory good cause not to approve the transfer. Assuming, arguendo, that plaintiffs' failure to provide a release was not good cause under § 27(g)(iv), we find that it otherwise provided good cause for defendant not to approve the transfer. Welch, supra at 462, 540 N.W.2d 693. Section 27(g) includes four specific examples of “good cause” but expressly states that good cause is not limited to the listed circumstances. Thus, in spite of the Legislature's partial definition of the phrase, this Court must still construe the phrase “good cause.” See Michigan Bell Telephone Co. v. Dep't of Treasury, 445 Mich. 470, 479, 518 N.W.2d 808 (1994) (when a term is defined by reference to what it includes, a construction is required that is broad enough to encompass other items not mentioned). This Court may therefore consult dictionary definitions in order to determine the meaning of the phrase. Welch, supra at 463, 540 N.W.2d 693. The phrase “good cause” “generally means a substantial reason amounting in law to a legal excuse for failing to perform an act required by law.” Black's Law Dictionary (6th ed), p 692. The Michigan Supreme Court has noted the phrase “good cause” is difficult to define. In Cummer v. Butts, 40 Mich. 322, 325, 29 Am.Rep. 530 (1879), the Court concluded that the phrase “good cause,” as *247 used by contracting parties in limiting the right to terminate an agency relationship, “has no frontier of meaning which can be defined.” In the context of a statutory requirement of good cause to dismiss a teacher, the Court quoted a Massachusetts court's explanation of good cause as including “any ground which is put forward by the committee in good faith and which is not arbitrary, irrational, unreasonable, or irrelevant to the committee's task of building up and maintaining an efficient school system.” Nephew v. Wills, 298 Mich. 187, 196, 298 N.W. 376 (1941). When reviewing the circumstances of a given case to determine whether good cause exists, this Court seeks to effectuate the Legislature's intent. Lorencz, supra at 377, 483 N.W.2d 844. M.C.L. § 445.1501; M.S.A. § 19.854(1) specifically states that the franchise “act shall be broadly construed to effectuate its purpose of providing protection to the public.” The public presumably consists of franchisors and franchisees. Nevertheless, General Aviation, Inc. v. Cessna Aircraft Co., 13 F.3d 178, 181 (CA 6, 1993), stated that the general purpose of the MFIL is to protect the rights of franchisees. Indeed, Banek Inc. v. Yogurt Ventures USA, Inc., 6 F.3d 357, 362 (CA 6, 1993), described the MFIL as a “comprehensive and paternalistic” law reflecting the public policy of Michigan. The good cause requirement centers on commercial reasonability. Cf. 62B Am Jur 2d, Private Franchise Contracts, § 549, p 465 (discussing “good cause” requirement for termination of franchise). We find that it is commercially reasonable for a franchisor to require a franchisee to resolve all non–MFIL disputes *248 the franchisee has with the franchisor before the franchisor approves a transfer of a franchise. B -- Plaintiffs assert, as an alternative ground for upholding the trial court's ruling, that the partial release they eventually signed was void and unenforceable under § 27(b) of the MFIL. This section declares void and unenforceable a requirement [in a franchise agreement] that a franchisee assent to a release, assignment, novation, waiver, or estoppel which deprives a franchisee of rights and **128 protections provided in this act. This shall not preclude a franchisee, after entering into a franchise agreement, from settling any and all claims. [M.C.L. § 445.1527(b); M.S.A. § 19.854(27)(b).] We reject plaintiffs' claim because the release plaintiffs signed did not deprive them of any rights or protections provided for in the MFIL, i.e., the release complied with § 27(b) because it excluded MFIL claims from its scope. Indeed, the language utilized by the Legislature necessarily suggests that releases that do not waive MFIL rights are permissible. II -- We now turn to plaintiffs' cross appeal of the trial court's order granting summary disposition of their claim for damages under § 5 of the MFIL. In granting defendant's motion for summary disposition of this claim, the trial court noted that defendant was entitled to request the release pursuant to a contractual provision and held that defendant had not engaged in an unfair practice. We affirm, but on different grounds. Section 31(1) of the MFIL, M.C.L. § 445.1531(1); M.S.A. § 19.854(31)(1), barred plaintiffs from bringing a cause of action under § 5 of the MFIL, M.C.L. § 445.1505; M.S.A. § 19.854(5), because defendant was not selling or offering to sell a franchise at the time of the alleged improper conduct. Pursuant to § 31, a franchisor is only liable to a purchaser of a franchise for § 5 violations. Although defendant did not present this argument to the trial court, we consider it because the issue is a question of law and the facts necessary for its resolution are present. Brown v. Drake–Willock Int'l, Ltd., 209 Mich.App. 136, 146, 530 N.W.2d 510 (1995): Section 5 of the MFIL provides:
A person shall not, in connection with the filing, offer, sale, or purchase of any franchise, directly or indirectly:
(a) Employ any device, scheme, or artifice to defraud.
(b) Make any untrue statement of material fact or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading.
(c) Engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person. [M.C.L. § 445.1405; M.S.A. § 19.854(5).]
Section 31(1) provides a civil remedy for violations of § 5:
A person who offers or sells a franchise in violation of section 5 or 8 is liable to the person purchasing the franchise for damages or rescission, with interest at 6% per year from the date of purchase until June 20, 1984 and 12% per year thereafter and reasonable attorney fees and court costs. [M.C.L. § 445.1531(1); M.S.A. § 19.854(31)(1) (emphasis added).]
Plaintiffs contend that when §§ 31 and 5 are read together, they have a claim because the Legislature intended that § 5 prohibit conduct beyond the initial sale of the franchise. We disagree. Section 31 creates a cause of action for “a person purchasing the franchise” against a “person who offers or sells a franchise in violation of section 5” of the MFIL. M.C.L. § 445.1531(1); M.S.A. § 19.854(31)(1). The statutory definitions of these terms supersede any common or dictionary definitions. For purposes of the MFIL:
“Person” means an individual, corporation, a partnership, a joint venture, an association, a joint stock company, a trust, or an unincorporated organization. [M.C.L. § 445.1503(5); M.S.A. § 19.854(3)(5).]
“Sale” or “sell” includes a contract or agreement of sale of, contract to sell, or disposition of, a franchise or interest in a franchise for value. [M.C.L. § 445.1503(8); M.S.A. § 19.854(3)(8).]
“Offer” or “offer to sell” includes an attempt to offer to dispose of or solicitation of an offer to buy, a franchise or interest in a franchise for value. The terms defined in this act do not include the renewal or extension of an existing franchise where there is no interruption in the operation of the franchised business by the franchisee. **129 [M.C.L. § 445.1503(3); M.S.A. § 19.854(3)(3).]
Giving the terms used in § 31 their defined meanings, this Court concludes that plaintiffs do not have a § 5 claim as a matter of law because the statute only imposes liability on a person who offers or sells a franchise in violation of § 5. In this case, defendant was not selling or offering to sell a franchise when plaintiffs claim it violated § 5. Further, plaintiffs were not the “person[s] purchasing the franchise,” but rather were the persons selling the franchise. Given *251 the clear language of § 31, plaintiffs do not have a claim for § 5 violations. Further, plaintiffs argue that § 31 should be read expansively to provide a cause of action against a franchisor for misconduct “in connection with” a sale even when the franchisee, not the franchisor, is the person selling the franchise. Plaintiffs contend that any other construction would lead to absurd results. We reject this argument. The statute limits claims to those brought against a “seller” who violates § 5 in connection with the sale. The Legislature's intent to restrict liability to conduct at the time of a sale is clear from its specific exclusion of renewals or extensions of a franchise agreement from the definitions of the terms “offer” and “offer to sell.” M.C.L. § 445.1503(3); M.S.A. § 19.854(3)(3). Contrary to plaintiffs' assertion, this exclusion evinces the Legislature's intent that § 5 pertain to a seller's conduct during the sale of a franchise, but not to later acts by the franchisor when not a “seller.” Accordingly, this Court finds that plaintiffs do not have a claim for damages because defendant's conduct did not occur when it occupied the position of a seller of the franchise. Therefore, the trial court properly granted summary disposition of plaintiffs' claim for damages under § 5 of the MFIL albeit for a different reason. Glazer v. Lamkin, 201 Mich.App. 432, 437, 506 N.W.2d 570 (1993). Plaintiffs contend that the statutory construction we are adopting leaves them without a remedy for acts that arguably violated § 5 because defendant is a “person” and defendant committed the complained of acts “in connection with” plaintiffs' sale of the franchise to a new franchisee. M.C.L. § 445.1505; M.S.A. § 19.854(5). Our refusal to read § 31 so expansively as *252 to allow plaintiffs a private cause of action is supported by § 34 of the MFIL, which provides: Except as explicitly provided in this act, civil liability in favor of any private party shall not arise against a person by implication from or as a result of the violation of a provision of this act or a rule or order hereunder. Nothing in this act shall limit a liability which may exist by virtue of any other statute or under common law if this act were not in effect. [M.C.L. § 445.1534; M.S.A. § 19.854(34).] Because the Legislature clearly expressed its intent that the courts not imply a private right of action to remedy violations of the MFIL, we may not imply a private cause of action and must find that plaintiffs did not have a claim in the case at bar because they have no right of action under § 31 of the MFIL. Section 34 clearly holds that private causes of action may not be implied under the MFIL.”)
Two Men and a Truck/International Inc. v. Two Men and a Truck/Kalamazoo, Inc., United States District Court, W.D. Michigan, Southern Division, September 27, 1996, 949 F.Supp. 500 (“The Michigan Franchise Investment Law (“MFIL”) provides that a franchise agreement can be terminated only for “good cause.” M.C.L.A. 445.1527 (West 1989). Under the statute, “good cause” includes: the failure of the franchisee to comply with any lawful provision of the franchise agreement and to cure such failure after being given written notice thereof and a reasonable opportunity, which in no event need be more than 30 days, to cure such failure. M.C.L.A. 445.1527(c). Although the standard of “good cause” under the MFIL is unclear, the MFIL has been drafted broadly compared to a number of other state statutes which proscribe specific situations which constitute “good cause.” Note, Balancing a Relationship—“Good Cause” Termination of Franchise Agreements in Michigan, 72 U.Det.Mercy L.Rev. 369, 382–84 (1995). Additionally, failure to pay money is almost always sufficient to constitute “good cause.” Lawrence I. Fox, Practising Law Institute, Order No. B4–6742, State Franchise, and Dealer Protection Laws 508 (1986). See also McDonald's Corp. v. Robert A. Makin, Inc., 653 F.Supp. 401 (W.D.N.Y.1986) (holding that where franchisor failed to pay monthly fees based on gross sales franchisor had right to terminate franchise agreement); Bonanza Int'l, Inc. v. Restaurant Mgmt. Consultants, Inc., 625 F.Supp. 1431 (E.D.La.1986) (regarding late payment of royalties); Hacienda Mexican Restaurant of Kalamazoo Corp. v. Hacienda Franchise Group, Inc., 569 N.E.2d 661 (Ind.Ct.App.1991) (permitting “good cause” termination if franchisee defaulted three times in any 18 month period). The record establishes that defendants failed to comply with lawful provisions in the Franchise Agreements by failing to pay royalties and advertising fees, and failing to file monthly sales reports. On October 25, 1994, plaintiff sent defendants a written notice informing them of plaintiff's intent to terminate the Franchise Agreements. In the notice, plaintiff indicated that the reasons for the termination were 1) failure to pay royalties, 2) failure to pay advertising fees, and 3) failure to file monthly sales reports. Pursuant to terms set forth in the Franchise Agreements, defendants were allowed ninety (90) days to cure the violations before the Agreements would automatically terminate. Plaintiff gave adequate notice of termination, stating reasons for the termination and giving defendants an opportunity to cure. Defendants' argument that plaintiff did not give adequate notice because plaintiff allowed only ten (10) days to cure the violations is unpersuasive. Whether the defendants received ten (10) days or ninety (90) days would not have mattered since defendants did not have any intention to cure. In fact, defendants claim that they rescinded the Agreements on or around November 2, 1994. To date, defendants have not offered to cure the violations. Thus, this Court finds that, under Michigan law, plaintiff had good cause to terminate the Franchise Agreements, and the Agreements were lawfully terminated. In Indiana, a franchisor may terminate a franchise agreement for “good cause.” Wright–Moore Corp. v. Ricoh Corp., 908 F.2d 128, 136–37 (7th Cir.1990) (interpreting the Indiana Deceptive Franchise Practice Act). Section 23–2–2.7–1(7) of the Indiana Deceptive Franchise Act (“IDFA”) prohibits termination without good cause and lists material violations of the franchise agreements as an acceptable reason for termination. I.C.A. 23–2–2.7–1(7) (West 1996). In Hacienda Mexican Restaurant of Kalamazoo Corp., the Indiana Court of Appeals determined that a franchisor had properly terminated a franchise agreement due to the franchisee's third untimely royalty payment. Hacienda, 569 N.E.2d at 667. The Court rejected the defendant's argument that economic reasons, such as late royalty payments, did not constitute “good cause.” Id. Unlike the defendants in Hacienda, the defendants in the case now before the Court were not late in royalty payments; they utterly failed to make royalty payments. This failure is a material violation of the Franchise Agreements. Thus, under Indiana law, plaintiff had good cause to terminate the Franchise Agreements and properly terminated them, as discussed previously.”)
Tractor and Farm Supply, Inc. v. Ford New Holland, Inc., United States District Court, W.D. Kentucky, Bowling Green Division. .March 15, 1995898 F.Supp. 1198 (“The Franchise Law renders void and unenforceable any “provision that permits the franchisor to refuse to renew a franchise on terms generally available to other franchisees of the same class type under similar Circumstances.” M.C.L. § 445.1527(e). The Sixth Circuit recently interpreted this section and held that § 1527 of the Franchise Law requires a legitimate, non-discriminatory reason for non-renewal. All similarly situated franchisees must be treated similarly. See General Aviation, Inc. v. Cessna Aircraft Co., 13 F.3d 178, 180–183 (6th Cir.1993). Plaintiffs charge that they consistently met Defendant's sales and performance requirements and have submitted affidavits containing allegations that Defendant's decision not to renew was motivated by animosity toward Garret Vance 3, Laura Vance's son, and a desire for a consolidated Ford and New Holland dealership in Plaintiffs' trade area.4 It is clear that Plaintiffs have alleged sufficient facts which suggest that their non-renewal arose from discriminatory and unequal treatment. Although their suggestions may not convince a jury, they will withstand Defendant's motion for summary judgment.5 IV. In Count Four, Plaintiffs assert that Defendant should be estopped from not renewing their franchise agreement because of extraneous oral representations that modified the written contract. According to Plaintiffs, Defendant made representations to them, before and after the written agreement was signed, that their relationship “would be a continuing one” so long as Plaintiffs capably performed as dealers. Plaintiffs further assert that they were induced to spend time, money and effort to develop and cultivate customer interest in New Holland products in the Glasgow, Kentucky trade area and that Defendant's decision not to renew their agreement, and its subsequent dealership agreement with a nearby company, is inequitable. Plaintiffs charge that equity prevents a manufacturer from invoking a clause in a contract where it has, by its conduct, led the dealer to believe it would not rely on that clause against the dealer. Although the doctrine of promissory estoppel is “alive and well” in this commonwealth, McCarthy v. Louisville Cartage Co., Inc., 796 S.W.2d 10, 11 (Ky.App.1990), estoppel cannot be the basis for a claim if it represents the same performance contemplated under a written contract. General Aviation, Inc. v. Cessna Aircraft Co., 915 F.2d 1038, 1042 (6th Cir.1990) (hereinafter “General Aviation II”) (citing General Aviation I, 703 F.Supp. at 647 n. 10 and Walker v. KFC Corp., 728 F.2d 1215 (9th Cir.1984) (holding that promissory estoppel “is not a doctrine designed to give a party to a negotiated commercial contract a second bite at the apple in the event it fails to prove breach of contract”)). And although Plaintiffs may have been induced to develop a valuable customer base in their trade area, doing so was a requirement of their signed dealership agreement. See ¶ 2, Dealership Agreement (requiring a dealer to “vigorously and aggressively” promote the sale of New Holland products). Defendant's promises that it would not invoke the non-renewal clause absent poor performance were not made a part of the parties' written agreement. Though Defendant's promises may have been calculated to induce a certain performance and reliance by Plaintiffs, the performance demanded was the same performance that, in part, constituted consideration for the franchise agreement. *1206 The Court agrees with the logic of General Aviation I & II, and will sustain Defendant's motion for summary judgment on this claim. General Aviation, Inc. v. Cessna Aircraft Co., United States Court of Appeals, Sixth Circuit, December 21, 199313 F.3d 178 (“The central controversy in this case surrounds the interpretation of § 27(e) of the Michigan statute, the non-discrimination provision: Sec. 27. Each of the following provisions is void and unenforceable if contained in any documents relating to a franchise: * * * * * * (c) A provision that permits a franchisor to terminate a franchise prior to the expiration of its terms except for good cause. Good cause shall include the failure of the franchisee to comply with any lawful provision of the franchise agreement and to cure such failure after being given written notice thereof and a reasonable opportunity, which in no event need be more than 30 days, to cure such a failure. (d) a provision that permits a franchisor to refuse to renew a franchise without fairly compensating the franchisee by repurchase or other means for the fair market value at the time of expiration of the franchisee's inventory, supplies, equipment, fixtures, and furnishings.... (e) a provision that permits the franchisor to refuse to renew a franchise on terms generally available to other franchisees of the same class or type under similar circumstances. This section does not require a renewal provision. Whether or not Cessna violated this section when it refused to renew its franchise contract with GA turns on our interpretation of the statute. Cessna argues that since § 27(e) “does not require a renewal provision,” renewals themselves are not required at all. The district court agreed. According to this interpretation, the statute places no limits on the company's decision to renew, but merely bars discrimination among franchisees after they are renewed. Unlike part (c), part (e) of this section does not expressly require good cause. Taken as a whole, Cessna *181 argues, the only constraint the statute places upon the franchisor's decision of whether or not to offer a renewal is the compensation requirement, § 27(d). Cessna also advances the policy argument that only the demands of the market place should control renewals. Section 27(e) should not be construed as an anti-discrimination requirement with respect to franchise renewals because such a reading would prevent companies from downsizing in response to economic pressures. If the statute were read to require evenhanded renewals, then companies like Cessna would have to abandon all their franchisees at once or none at all. GA counters that since the statute only protects franchisees that are similarly situated, it permits non-renewal of “bad” franchises. GA Br. at 23. Discrimination among franchisees would not be “unfair” if based on a legitimate reason, which could include the economic hardships of the franchisor. GA Supp.Br. at 12, 19. GA construes § 27(e) as a general antidiscrimination provision regarding renewals. GA argues that since the purpose of the statute is to protect franchisees, it makes no sense to construe this anti-discrimination provision as allowing the ultimate act of discrimination-refusing to renew one franchisee while renewing all other similarly situated franchisees. GA also relies on the section analysis compiled by Michigan's House Committee on Corporations and Finance to support its interpretation. Although the district court noted that the section analysis supports GA's interpretation of § 27(e) and conflicts with Cessna's interpretation, the court refused to consider the document because it determined that the section was unambiguous. The court also found the section analysis somewhat suspect since it was of “unknown date and authorship.” We do not find it necessary to base our decision on the House Committee report. The district court adopted Cessna's interpretation of the statute. The court found that § 27(e) provided “that a franchisor cannot condition its decision to renew on conditions different from those required by other similarly situated franchisees” but held that the section did not require Cessna to continue to do business with GA. Thus it appears that under the district court's interpretation, franchisors may arbitrarily decide to which franchisees they will offer renewals because the evenhandedness requirement applies only after an offer to renew has been made. We find the district court's interpretation doubtful in light of what appears to be a general anti-discrimination provision with respect to a franchisor's decision of whether or not to renew a contract. The statutory language prohibits “the franchisor to refuse to renew a franchise” on a basis not applicable to “other franchisees of the same class or type.” Since this statute has not received the benefit of judicial interpretation prior to this case, we requested counsel to submit supplemental briefs surveying the renewal provisions in analogous federal and state statutes and the parameters of the “good cause” requirements found therein. While the general purpose of franchise legislation is to protect the rights of franchisees, the degree of protection varies. Some states require good cause when a franchisor fails to renew a contract, while others require compensation at that time. Still others prohibit discrimination, require notice of non-renewal and disclosure of renewal terms. Although no other state's legislation directly parallels Michigan's, an analysis of other laws will aid us in our interpretation of the present statute. The anti-discrimination clauses of other states' franchise regulations are most apposite to our inquiry. Several states bar a franchisor from discriminating among franchisees. See e.g., Franchise Practices Act, Ark.Stat.Ann. § 4-72-204(a)(2); Franchise Investment Act, Hawaii Rev.Stat. § 482E-6(2)(C) and (H) (requiring renewal absent cause or in accordance with the current terms and standards established by the franchisor then equally applicable to all franchisees); Franchise Investment Protection Act, Wash.Rev.Code § 19.100.180(2)(c) and (i) (unlawful to discriminate between franchisees in any business dealing unless reasonable and not arbitrary); Iowa Franchise Act, Iowa Code, Title XIII, § 523H.8 (refusal to renew may not be arbitrary). The plain language of these statutes and the few cases interpreting them indicate that they seek to *182 govern both a franchisor's decision whether or not to offer a renewal to a franchisee and the terms of the renewal packages offered. See e.g., Zeigler Co. v. Rexnord, Inc., 147 Wis.2d 308, 433 N.W.2d 8, 12 (1988) (section regulates grantor's ability to cancel or fail to renew franchise). In fact, all the renewal regulation provisions surveyed seek to govern the decision whether or not to renew. See e.g., Witt v. Union Oil Co., 99 Cal.App.3d 435, 438, 160 Cal.Rptr. 285 (1979) (section designed to prevent franchisors from arbitrarily refusing to renew). We find no case in support of Cessna's assertion that § 27(e) seeks only to bar discrimination among renewed franchisees while allowing a franchisor complete freedom in choosing which franchisees to offer renewals. Although the Michigan legislature has employed language which is somewhat different from that of the other states mentioned above, we believe that when it enacted § 27(e) it also proscribed discrimination with respect to a franchisor's decision of whether or not to offer renewals. Section 27(e) does not directly require good cause. Cessna rightly points out that the differences in the language of § 27(c), which requires good cause for termination, and § 27(e), which does not mention good cause, must have meaning. Cessna could fail to renew all its franchisees without cause. However, this does not lead to the conclusion that the compensation requirement of § 27(d) is the lone constraint on a franchisor's decision of whether or not to offer a renewal contract. We note that the compensation provisions cited by both parties in their supplemental briefs are more extensive than Michigan's § 27(d), as they require compensation for the full value of the franchise as a going concern, not merely repurchase of inventory. See e.g., Franchise Disclosure Act, Ill.Rev.Stat., ch. 815, § 705/20; Franchise Law, Minn.Stat. § 80C.14(4); Minn.Admin.Reg., R.2860.4400(B); Franchise Investment Protection Act, Wash.Rev.Code § 19.100.180(2)(i). It seems plain to us that § 27 broadly proscribes discrimination among similarly situated franchisees with respect to renewal offers, in addition to requiring the payment of compensation. Based on the language of the statute taken as a whole and considered in the context of similar statutes, we interpret § 27(e) to require Cessna to renew its franchise with GA in accord with the renewal terms Cessna offered to other, similarly situated franchisees. We do not read § 27(e) to require cause for failure to renew per se, but only for differential treatment.”)
General Aviation, Inc. v. Cessna Aircraft Co., United States Court of Appeals, Sixth Circuit, December 21, 199313 F.3d 178 (“Cessna argues that even if § 27(e) is interpreted to prohibit discriminatory refusals to renew, it does not apply in this case because there is no renewal provision in the GA franchise agreement and the section “does not require a renewal provision.” GA contends that § 7 of the 1984 Dealer Agreement constitutes a renewal clause for the purposes of invoking § 27(e): Unless Cessna has notified Dealer of its intention not to renew this Agreement, Cessna will offer Dealer prior to September 1, 1984 a Cessna Conquest Sales and Service Agreement for the succeeding Agreement year, provided this Agreement has not been terminated or notice has not been mailed prior to such date. Cessna contends that this is not a renewal provision but merely a notice provision which describes the procedure to be followed in case either party desires to offer or accept a renewal. Cessna asserts that “[t]he previous decision of this court dictates that the 1984 agreement not be deemed a renewal.” Cessna letter to Court Clerk, Sept. 20, 1993. The determination by this Court that a material change in Cessna's franchise agreement with GA rendered the statutory exemption for renewals inapplicable is not tantamount to a finding that no renewal provision existed in the 1984 contract or that the 1984 contract itself was not a renewal. On the contrary, parties often contemplate that the specific provisions of a franchise agreement may change. See e.g., Dufresne's Auto Service, Inc. v. Shell Oil Co., 992 F.2d 920, 926 (9th Cir.1993). We construe § 7 of the Dealer Agreement to be a renewal provision. We need not determine whether the last sentence of § 27(e) requires a renewal provision in the franchise agreement in order for the anti-discrimination provision to apply, or whether it does not require parties to include *183 a renewal provision in their contracts and the anti-discrimination provision applies only if they do. Accordingly, the cases Cessna relies upon are not persuasive. The Virginia statute at issue in Betsy-Len Motor Hotel Corp. v. Holiday Inns, Inc., 238 Va. 489, 385 S.E.2d 559 (1989) merely requires disclosure of renewal terms; the good cause requirement applies only to termination. Witt v. Union Oil Co., 99 Cal.App.3d 435, 160 Cal.Rptr. 285 (1979) concerned retroactive application of a statute to a lease that did not contain a renewal clause. Wright-Moore Corp. v. Ricoh Corp., 980 F.2d 432 (7th Cir.1992) similarly dealt with a contract that contained no renewal provision. Cloverdale Equip. Co. v. Simon Aerials Inc., 869 F.2d 934 (6th Cir.1989) is not a franchise case. In none of these cases did the court find discrimination on the part of the franchisor. At most, Cessna demonstrates that other states' franchise statutes which regulate renewals do not require courts to impose a renewal provision where none exists. Cessna has garnered no support for the contention that when a franchise agreement contains a renewal provision and the governing law prohibits discrimination a franchisor may refuse to renew the agreement at will. Finally, we address Cessna's contention that our reading of this provision will unfairly constrain the ability of companies to deal with economic downturns. Clearly, it is the intent of the Michigan legislature to offer a modicum of protection to franchisees. Our review of similar statutes indicates that this type of regulation is enacted as result of concern ... that once a business has made substantial franchise-specific investments it loses all or virtually all of its original bargaining power regarding continuation of the franchise. Specifically, the franchise cannot do anything that risks termination, because that would result in a loss of much or all of the value of its franchise-related investments. Instructional Sys., Inc. v. Computer Curriculum Corp., 826 F.Supp. 831, 838 (D.N.J.1993) (citation omitted). But the legislature did not “intend to impose an eternal and unqualified duty of self-sacrifice upon every grantor that enters into a distributor-dealership agreement” or to “insulate dealers from all economic reality at the expense of grantors.” Zeigler, 433 N.W.2d at 11, 12. A franchisor in Michigan may still deal effectively with economic hardship. It may change the terms of all its franchise agreements or terminate those franchises which are distinguishable. A franchisor may not unfairly discriminate between similarly situated franchisees when offering renewal contracts. 4 Pursuant to our analysis of § 27(e), Cessna could refuse to renew GA's contract if the circumstances of its relationship with GA were not similar to those of its relationships with other dealers: in other words, if it had a legitimate reason to treat GA differently. We reverse the holding of the district court on this issue and remand with instructions to the court to determine whether such a reason existed. We reiterate that Cessna's justification must evince a specific basis for failing to renew the GA contract and not merely support the contention that Cessna needed to cut back on the size of its operation by eliminating this one dealer without any change in its policies regarding other dealers.”)
Dunkin' Donuts of America, Inc. v. Middletown Donut Corp., Supreme Court of New Jersey, July 23, 1985100 N.J. 166495 A.2d 66 (“The limited remedies explicitly granted in certain franchising statutes likewise tend to support our conclusion. For example, Washington Revised Code § 19.100.180(2)(j) (1978) provides that on termination for good cause, the franchisor must repurchase the franchisee's inventory and supplies at fair market value. However, the statute requires no payment for the value of the franchise. Similar repurchase requirements appear in the franchising statutes of Wisconsin, Michigan, and Mississippi. See Wis.Stat. § 135.045 (1984) (remedy available to all terminated franchisees but repurchase requirement applies only to merchandise with a name, trademark, or label that identifies the franchisor); Mich.Comp.Laws § 445.1527 (1985) (additionally requires repurchase of equipment, fixtures, and furnishings, *181 but remedy is available only to nonrenewed franchisees whose term of franchise was less than five years and whose agreement contained covenant not to compete); Miss.Code Ann. § 75–77–3 (1979) (remedy available to all terminated franchisees). In Arkansas, only those franchisees terminated without cause must be compensated for supplies, inventory, and equipment, Ark.Rev.Stat. § 70–815 (1979), the implication being that those who are terminated for cause get nothing.”)
McAlpine v. AAMCO Automatic Transmissions, Inc., United States District Court, E.D. Michigan, Southern Division, April 3, 1978, 461 F.Supp. 1232202 U.S.P.Q. 575 (“Franchisees, like all other persons in the United States, enjoy the right pursuant to the First Amendment of the United States Constitution to assemble, subject only to those exceptions specifically provided for by statute. Although a franchisee cannot combine with a competitor to fix prices, 15 U.S.C. s 1, for example, franchisee gatherings, and joint activities which do not violate the law cannot, standing alone, be actionable. Krum v. Sheppard, supra; Dunn v. Goebel Brewing Co., 357 Mich. 693, 99 N.W.2d 380 (1959). Michigan, the state where the alleged conspiratorial activities are to have occurred, recently enacted a Franchise Investment Law. M.C.L.A. s 445-1401 (P.A. No. 269, 1974), et seq. which provides in pertinent part (s 445.1527) that a franchisor may not: (a) restrict the right of a franchisee to join an association of franchisees, or require a franchisee to join such an association. One of the traditional control mechanisms of a franchisor has been to keep its franchisees disorganized. Franchisees, by necessity, must have access to the franchise *1274 group in order to act together to deal with common problems, whether those problems be the oppressiveness of the franchisor or some less momentous concern. The fact that a contract might have been breached as a direct result of franchisee organization means nothing more than that the franchisor would have a cause of action for breach of contract. As for AAMCO's contention that the plaintiffs held secret meetings and cautioned one another against discussing the matters outside of the meeting, this court finds nothing actionable from such conduct. AAMCO further contends that the object of these secret meetings was to withdraw and cancel all AAMCO franchises in the Detroit market, but the evidence is to the contrary. The plaintiffs did not commence their secret meetings in September, 1973, with the objective of conspiracy to break away from AAMCO. The meetings were begun in order to discuss the franchisees' concern over AAMCO's proposed marketing plan of placing more AAMCO franchises in the Detroit area. (See Schlachter Dep. at 15-17). Separation from AAMCO was discussed as a last resort, and plans were subsequently drawn only in the event that such a contingency might occur. Not until November 20, 1973, at the last meeting the plaintiffs would hold as AAMCO franchisees, did the franchisees vote to terminate their Franchise Agreements (Tr at 26). Accordingly, those meetings, begun as a lawful vehicle for discussing legitimate business concerns, cannot rise to the level of a tortious conspiracy particularly in light of the protections afforded by the First Amendment of the Constitution of the United States.”)