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

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

 

– Virginia Has a Disclosure/Registration Franchise Law

– Virginia Has a Relationship/Termination Franchise Law

– Virginia Has a General Business Opportunity Franchise Law

– Virginia Has an Alcoholic Beverage Wholesaler/Franchise Law

– Virginia Has an Equipment Dealer/Franchise Law

– Virginia Has a Gasoline Dealer/Franchise Law

– Virginia Has a Marine Dealer/Franchise Law

– Virginia Has a Motor Vehicle Dealer/Franchise Law

– Virginia Has a Motorcycle Dealer/Franchise Law

– Virginia Has a Recreational and Power Sports Vehicle Dealer/Franchise Law

– Virginia Does Not Have a Restaurant Liability Law

With regard to franchise relationship issues, the Virginia Retail Franchising Act, Va.Code Ann. 13.1–557 et seq. (“VRFA”), prohibits only two types of conduct by franchisors, including unlawful cancellation and undue influence. Specifically, the VRFA makes it unlawful for a franchisor to cancel a franchise without reasonable cause or to use undue influence to induce a franchisee to surrender any right given to it by any provision contained in the franchise agreement.

The VFRA allows a private party, other than a state agency, to sue for franchisor relationship misconduct, but only in very limited circumstances. Under Sec. 13.1-571 of the VFRA, Civil Remedies are available to a private franchisee plaintiff injured only by a franchisor’s violation of §13.1-564 (unreasonable cancelation or the exertion of undue influence). Further, such an aggrieved franchisee may sue only to recover the damages sustained by reason of those specific violations. A successful franchisee plaintiff would also be entitled to the costs of the action, including reasonable attorney's fees. Moreover, the rights and remedies granted to a plaintiff franchisee are not in lieu of, but in addition to, any and all other rights and remedies that the franchisee may have at law or in equity.

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

Virginia State Dealer/Franchise Disclosure/Registration Laws Retail Franchising Act. Virginia Code, Title 13.1, Chap. 8, Sec. 13.1-557 through 13.1-574

Virginia State Dealer/Franchise Relationship/Termination Laws
Retail Franchising Act (portion). Virginia Code, Title 13.1, Chap. 8, Sec. 13.1-557 through 13.1-574.

Virginia State Dealer/Franchise Business Opportunity Laws
Business Opportunity Sales Act. Virginia Code, Title 59.1, Chapter 21, Sections 59.1-262 through 59.1-269.

Virginia Alcoholic Beverage Franchise/Wholesaler Laws
Virginia Beer Franchise Act; Virginia Wine Franchise Act. Va. Code Ann. Tit. 4.1, Chap. 5, §4.1-500 to §4.1-517,Va. Code Ann. Tit. 4.1, Chap. 4, §4.1-400 to §4.1-418.

Virginia Equipment Franchise/Dealer Laws
Virginia Equipment Franchise/Dealers Protection Act; Virginia Heavy Equipment Franchise/Dealers Act .Va. Code Ann. Tit. 59.1, Chap. 27.1, §59.1-352.1 to §59.1-352.10, Va. Code Ann. Tit. 59.1, Chap. 28, §59.1-353 to §59.1-363

Virginia Gasoline Franchise/Dealer Laws
Virginia Petroleum Products Franchise Act; Virginia Emergency Petroleum Products Supply Act .Va. Code Ann. Tit. 59.1, Chap. 2.2, §59.1-21.8 to §59.1-21.18:1,Va. Code Ann. Tit. 59.1, Chap. 2.2:1, §59.1-21.18:2 to §59.1-21.18:4

Virginia Marine Franchise/Dealer Laws
Virginia watercraft Franchise/Dealers law. Va. Code Ann. Tit. 29.1, Chap. 8, §29.1-828 to §29.1-829

Virginia Motor Vehicle Franchise/Dealer Laws
Virginia motor vehicle Franchise/Dealer law.Va. Code Ann. Tit. 46.2, Chap. 15, Art. 1 §46.2-1500 to §46.2-1507

Virginia Motorcycle Franchise/Dealer Laws
Virginia motorcycles Franchise/Dealer law Va. Code Ann. Tit. 46.2, Chap. 19.2, Art. 1 §46.2-1993 to §46.2-1993.5,Art. 7 §46.2-1993.64 to §46.2-1993.74

Virginia Recreational and Power Sports Vehicle Franchise/Dealer Laws
Virginia recreational vehicles Franchise/Dealer law (motor homes); Virginia trailer Franchise/Dealers law.Va. Code Ann. Tit. 46.2, Chap. 19, Art. 1 §46.2-1900 to §46.2-1907,Art. 7 §46.2-1973 to §46.2-1983,Va. Code Ann. Tit. 46.2, Chap. 19.1, Art. 1 §46.2-1992 to §46.2-1992.5,Art. 7 §46.2-1992.66 to §46.2-1992.77

Virginia Restaurants
No Virginia-specific franchise law in this industry niche.

VIRGINIA FRANCHISE PRACTICES ACT – EXCERPTS OF SELECTED CASES ON VIRGINIA DEALER/FRANCHISE TERMINATION AND NON-RENEWAL LAW

Several Virginia federal and state court decisions addressing dealer and franchise termination and non-renewal issues have been excerpted below. For more information regarding the specific reasoning, ultimate determination, or implications of any franchise termination or non-renewal case listed below, please contact Jeff Goldstein.

Bans Pasta, LLC v. Mirko Franchising, LLC, 2014 WL 637762, W.D.Va. 2014 (“Plaintiff's Section 564 Claim -- Likewise, the Court agrees with Defendants that Plaintiff has not stated a plausible claim for relief under Section 564. That provision renders it unlawful for “a franchisor to cancel a franchise without reasonable cause....”4 The Amended Complaint in this case alleges that Plaintiff was attempting to cancel the franchise and that it was Defendants who insisted on the performance of the contract. See ECF No. 11, ¶ 53. Although a portion of Paragraph 53 alleges that Defendants “retaliated against Bans and advised Bans that Mirko was cancelling and/or terminating the Franchise Agreement,” that allegedly took place after Bans Pasta notified that it was ceasing all operations as a Mirko Pasta franchisee. Based on these allegations, it simply does not satisfy the Iqbal plausibility standard for Plaintiff to claim that it was Defendants who “cancel[led] the franchise without reasonable cause.” Indeed, Plaintiff's other claims are all premised on its mutually exclusive contention that it rescinded (or attempted to rescind) the contract on the grounds of fraud, not that Defendants attempted to cancel the franchise.”)

Lake Wright Hospitality, LLC v. Holiday Hospitality Franchising, Inc., 2009 WL 2606254, E.D.Va. 2009 (“Violation of the Virginia Retail Franchising Act (Count III) -- The Virginia Retail Franchising Act (“VRFA”) provides that “[i]t shall be unlawful for a franchisor to cancel a franchise without reasonable cause or to use undue influence to induce a franchisee to surrender any right given to him by any provision contained in the franchise.” Va.Code § 13.1–564. Since its franchise license has not been cancelled, Plaintiff argues a violation under the second prong, claiming that Defendants used “undue influence” to coerce Lake Wright to surrender its rights under the License Agreement. Specifically, Plaintiff alleges that Defendants forced Lake Wright “into a ridiculous and unwarranted Hobson's choice” to either: (a) “exit the system and pay a hefty termination fee; (b) expend substantial sums to ‘convert’ to another of Defendents' hotel brands; or (c) remain a HISL, a brand Defendants dissolved and now denigrate....” (Pl.'s Br. at 38.) Plaintiff's alleged “Hobson's choice,” however, distorts the evidence and fails to identify a single surrendered right. Defendants' Memorandum of March 24, 2006 invited the HISL owners to remain a HISL for the remainder of their respective license agreements.16 Defendants continue to maintain the HISL website, and Plaintiff continues to enjoy call center support and access to the HOLIDEX reservations system. With respect to marketing, the License Agreement only requires that Defendants spend the marketing contribution on promoting the overall System, which Defendant does. Moreover, for those franchisees that wished to convert to another brand, Defendants offered to pay for the change in signage (Pl.'s Ex. 35) and waive the $5,000 brand change fee (Pl.'s Ex. 52), even though Defendants were under no obligation to do so. Finally, Plaintiff has not cited, and this Court cannot find, any controlling precedent to suggest that Plaintiff has surrendered a right within the meaning of the VRFA. To the contrary, Defendants' undisputed decision to honor the duration of each HISL license agreement and Defendants' undisputed efforts to facilitate less costly transitions for HISL franchisees comports with the VRFA's requirement that “franchisors ... deal fairly with their franchisees.” Va.Code § 13.1–558. No reasonable juror could find, therefore, that Defendants violated the VRFA. Accordingly, the Court recommends that summary judgment be granted in favor of Defendants on Count III.”)

LTD Management Co., LLC v. Holiday Hospitality Franchising, Inc., 2008 WL 7281926, E.D.Va. 2008 (“Complaint fails to state a claim for violation of the Virginia Retail Franchise Act. The relevant portion of the Act states: “[i]t shall be unlawful for a franchisor to cancel a franchise without reasonable cause or to use undue influence to induce a franchisee to surrender any right given to him by any provision contained in the franchise.” Va.Code § 13.1–564. The Defendants argue that: (1) they have not cancelled the Plaintiffs' franchise because the Plaintiffs continue to operate their hotel as a “Select” brand hotel, and (2) they have not induced the Plaintiffs to surrender any rights because they have not breached any provisions of the Agreement. In Response, the Plaintiffs argue that the Defendants have breached various provisions of the Agreement. As described above, the Plaintiffs have alleged sufficient facts to assert a claim for breach of the underlying Agreement. Therefore, construing the facts in the light most favorable to the Plaintiffs, this Court cannot conclude that the Plaintiffs would not be “entitled to relief under any legal theory which might plausibly be suggested by the facts alleged.” Harrison, 840 F.2d at 1152 (citation omitted). The facts alleged by the Plaintiffs with respect to the Virginia Retail Franchise Act claim are a sufficient “short and plain statement of the claim showing that the [Plaintiffs are] entitled to relief” under Fed.R.Civ.P. 8(a)(2). Additional factual detail is not required to satisfy the Plaintiffs' burden of providing the Defendants with “fair notice of what the ... claim is and the grounds upon which it rests.” Twombly, 127 S.Ct. at 1965 (quoting Conley, 355 U.S. at 47). As with the contract and implied covenant claim, it would be premature for the Court to demand a greater showing from the Plaintiff at this early stage in the proceeding. Therefore, the Defendants' Motions pursuant to Fed.R.Civ.P. 12(b)(6) are hereby DENIED at this time with respect to Count III.”) [In July and August of 2000, the Defendants allegedly made repeated representations to the Plaintiffs in an attempt to induce the Plaintiffs to convert their “Holiday Inn & Suites” hotel into a “Holiday Inn Select” (“Select”) hotel. Specifically, the Defendants allegedly said that they planned to make significant investments in promoting the “Select” brand which would increase Plaintiffs' profits. Relying on these representations, the Plaintiffs allegedly spent approximately $500,000.00 to complete the conversion. On October 25, 2000, an addendum amended the Agreement by replacing every reference to “Holiday Inn Hotel & Suites” to “Holiday Inn Select.” However, the Defendants allegedly never promoted the “Select” brand to the degree represented to the Plaintiffs. During the same period, the Defendants were developing and promoting the “Holiday Inn Express” (“Express”) brand. In a March 24, 2006, letter to the Plaintiffs, the Defendants announced that they would cease promoting “Select” as a distinct brand. Statements allegedly made by the Defendants indicated that this decision was made as a result of the success of the “Express” brand, which made promotion of the “Select” brand unnecessary. The March 24, 2006, letter gave the Plaintiffs the option to convert to an alternative brand or to remain with the un-promoted “Select” brand. The Plaintiffs chose to retain the “Select” brand. The Plaintiffs allege that the Defendants never agreed to compensate them for the $500,000.00 cost incurred to initially convert to the “Select” brand or to convert an alternative brand. On May 25, 2007, and June 1, 2007, the Defendants announced that they were considering a plan to open an “Express” hotel less than a mile from the Plaintiffs' hotel. The Defendants' policies allegedly required the Defendant to notify the Plaintiffs, to provide the Plaintiffs with an opportunity to comment, to perform an “impact analysis” if requested, and to compensate the Plaintiffs for any adverse impact from the new “Express” hotel. The Plaintiffs gave the Defendants detailed written objections to the new hotel and, on August 8, 2007, the Defendants offered to compensate the Plaintiffs for the adverse impact from the new hotel by reducing franchise fees. The Plaintiffs estimate that the value of the reduction in franchise fees would be approximately $120,000 but estimate that their lost revenue would be approximately $1.8 million. The Plaintiffs allege that their revenue will decrease dramatically because more than two-thirds of the reservations for the Plaintiffs' hotel originate with the Defendants' call center, which will now inform customers that there are now two Holiday Inn hotels near the Norfolk International Airport, and because the “Express” brand will be promoted whereas the “Select” brand will not. Although the Defendants prepared an “impact analysis” in an attempt to gauge the impact of the new hotel, the Plaintiffs allege that the study was flawed because of its failure to consider certain factors.”]

McDonald's Corp. v. Turner-James, 2005 WL 7873649, E.D.Va. 2005 (“Plaintiffs did not violate the Virginia Retail Franchising Act by using undue influence to induce the Defendants to surrender their “right” to assign their franchises, since they never possessed such a right under the terms of the Franchise Agreement. Defendants' argument that Plaintiffs violated the Virginia Retail Franchising Act is without merit, and must be dismissed because under the Franchise Agreements, Defendants never had a “right” to assign those agreements to another party. Therefore, Plaintiffs could not have infringed that right. Under the Act, it is “unlawful for a franchisor to cancel a franchise without reasonable cause or to use undue influence to induce a franchisee to surrender any right given to him by any provision contained in the franchise.” Va.Code Ann. § 13.1–564. Defendants allege that Plaintiffs violated the second prong of the statute by using “undue influence ... to induce Turner–James and ETJ to surrender their right to assign the franchises, a right that is provided to Turner–James and ETJ under the respective franchise agreements.” Defs.' Countercl. at 15. Defendants assert that they did possess the right to assign the franchisees, and that they never forfeited that right. Defs.' Opp'n at 3–6. Defendants' claim is not borne out by the plain language of the Franchise Agreements. Under the Franchise Agreements, even before any alleged breach may have occurred, Defendants never had the right to unilaterally assign the right to the franchises without the consent of Plaintiffs. The section of the agreements that addresses the issue of assignment begins, “[w]ithout the prior written consent of McDonald's, Franchisee's interest in this Franchise shall not be assigned or otherwise transferred in whole or in part ...” Compl., Exhs. A, C ¶ 15. No material fact is in dispute here. As Defendants repeatedly state, “the Franchise Agreement speaks for itself.” Defs.' Countercl. at 3. Therefore, this claim must be dismissed.”)

G.M. Garrett Realty, Inc. v. Century 21 Real Estate Corp., 17 Fed.Appx. 169, 169+, 4th Cir.(Va. 2001)(“We turn first to the question of whether the jury incorrectly found that Century 21 unreasonably terminated its franchise agreement with Garrett Realty. At the close of all the evidence, Century 21 moved for judgment as a matter of law pursuant to Federal Rule of Civil Procedure 50(a) on the VRFA unreasonable termination claim, citing the fact that the uncontroverted evidence showed that Garrett Realty owed Century 21 monies due under the franchise agreement. J.A. at 608. Century 21 argued then, as it does now, that the admission on Garrett Realty's part that some fees were owed provides reasonable cause for termination of the franchise agreement as a matter of law. The trial court denied the motion and submitted the claim to the jury. After the jury found for Garrett Realty on this claim, Century 21 renewed its motion pursuant to Rule 50(b) on the same grounds, and the motion was again denied. … The question here is a purely legal one: will any failure to pay fees due under a franchise agreement support a franchisor's termination of that agreement without violating the VRFA? The provision at issue is Virginia Code § 13.1–564, which provides, in pertinent part, that “[i]t shall be unlawful for a franchisor to cancel a franchise without reasonable cause.” The parties have not offered, nor has this court found, a reported interpretation of the reasonableness requirement of the Virginia statute. The trial court instructed the jury that, “in determining ... whether there was reasonable cause, you may also consider whether there was a genuine dispute as to the amount owed,” as there was in this case. J.A. at 688–89. Century 21 objected to this instruction. J.A. at 640. However, Century 21 did not offer any legal basis for the objection and does not now contest the propriety of the instruction. There was ample evidence before the jury to indicate that Garrett Realty disputed the amount owed to Century 21, that Garrett Realty continued to pay certain sums to Century 21 during the term of the franchise agreement, and that Garrett Realty engaged in continued negotiations with Century 21 to determine the correct amount owed. The court finds no legal error in the jury's finding that Century 21 did not have reasonable cause to terminate the franchise agreement. The flaw in Century 21's argument is that it equates “reasonable cause” with “any cause.” Failure to pay disputed fees may represent a cause for termination, but the court finds no error in the jury's determination that Century 21's termination was unreasonable.”)

Betsy-Len Motor Hotel Corp. v. Holiday Inns, Inc., 385 S.E.2d 559 Va. (“Code § 13.1-564 provides: “It shall be unlawful for a franchisor to cancel a franchise without reasonable cause or to use undue influence to induce a franchisee to surrender any right given to him by any provision contained in the franchise.” In August 1988, the franchisee filed a petition with the Commission asserting that the franchisor had given written notice on March 18, 1988 of termination of the agreement effective December 18, 1988. The franchisee alleged that the franchisor's action was taken without any reasonable cause and thus violated the foregoing statute. The franchisee asked the Commission to determine the reasonableness of the franchisor's action and to enjoin it from terminating the agreement without reasonable cause. … The Commission ruled, stating it “deliberately ignore[d]” the documents, that termination of the agreement in conformity with its specific language would not be a violation of § 13.1-564. The franchisee attacks this ruling on appeal. The Commission also decided that the franchisor's attempted termination by notice furnished prior to December 18, 1988 did not comply with the agreement. Viewing the termination language as clear and unambiguous, the Commission said that the adverbial clause, “Effective December 18, 1988,” modifies the remainder of the sentence. Thus, the Commission ruled, the rights given both parties to deliver a termination notice did not arise until December 18, 1988. Accordingly, the Commission found that the franchisor's action taken prior to December 18, 1988 to terminate the agreement was unlawful under § 13.1-564 and enjoined the franchisor from violating that portion of the agreement. The franchisor does not challenge this ruling. In fact, counsel advise us that the termination notice was reissued in January 1989 and that the parties have agreed to extend the period of that notice through the date of this opinion. On appeal, the franchisee states that the agreement provides that either party can terminate it upon nine months' written notice given on or after December 18, 1988. This provision, the franchisee argues, purports to allow the franchisor “to cancel the Agreement for any reason, or for no reason at all,” and thus is of “no effect from the Agreement's inception to the extent it would allow a cancellation by Holiday Inns without reasonable cause.” In addition, the franchisee points to what it labels the Act's “anti-waiver” provision. Code § 13.1-571(c) provides: “Any condition, stipulation or provision binding any person to waive compliance with any provision of this chapter ... shall be void....” Contending that the statute's purpose “is to ensure that the protections of the Act can never be bargained away,” the franchisee asserts that the Commission has “created a loophole through which franchisors can cancel franchise agreements arbitrarily and capriciously, contrary to the express language of the Act.” We do not agree with either of the franchisee's contentions. Neither statute relied upon by the franchisee is applicable under these circumstances. As we recently have noted, the Act is designed “to equalize the balance of power between franchisors and franchisees,” Crone v. Richmond Newspapers, Inc., 238 Va. 248, 254, 384 S.E.2d 77, 80 (1989), and requires franchisors “to deal fairly with their franchisees with reference to all aspects of the franchise relationship.” Code § 13.1-558. Nevertheless, the Act does not proscribe the parties to a franchise from, as here, agreeing that it shall be in force for a limited duration and that it shall extend for an identifiable period of time, where there is no claim of duress or mistake. As the Commission noted, the Act was intended to prevent the unfair, arbitrary, and capricious abrogation of a franchise agreement before the end of an identifiable period of time to which the parties agreed at the inception of the agreement. The Act does not, however, require renewal **561 or extension of a franchise after it lawfully terminates according to its terms. Under the present agreement, in clear language, the franchisor (as well as the franchisee) was given an unqualified right to terminate the agreement at the end of the ten-year period. Like the Commission, we conclude that the act of giving notice in strict conformity with the agreement “is not the sort of mischief that Code § 13.1-564 was intended to prohibit.” Consequently, the Commission's December 1988 final order will be Affirmed.”)

Picture Lake Campground, Inc. v. Holiday Inns, Inc.,497 F.Supp. 858, E.D.Va. 1980 (“Count Seven of plaintiffs' complaint alleges that Holiday Inns has breached its fiduciary duties of good faith, loyalty and honesty owed to Picture Lake and First Management. It is plaintiffs' contention that such a fiduciary duty may exist in a franchise relationship and, when violated, is actionable under Virginia law. Holiday Inns has moved to dismiss Count Seven pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief can be granted, or, in the alternative, to dismiss First Management from Count Seven for lack of standing because First Management is not a “franchisee” of Holiday Inns. At the outset, the Court notes that no Virginia court has recognized a fiduciary duty in the franchise context or a cause of action against a franchisor for breach of a fiduciary duty. Therefore, this Court must use its informed judgment in predicting what the Supreme Court of Virginia would decide in this case. Nature Conservancy v. Machipongo Club, Inc., supra. Apparently this Court's decision in Principe v. MacDonald's Corporation, 463 F.Supp. 1149 (E.D.Va. 1979), is the only reported decision dealing with an action under the Virginia Retail Franchising Act, Va. Code s 13.1-557 et seq. (Repl. Vol. 1978). In that case, plaintiffs argued, among other things, that a failure on the part of the defendants to deal in good faith constituted a cause of action as a violation of Va. Code s 13.1-558, the policy section of the Virginia Retail Franchising Act. That section provides as follows: It is hereby declared to be the policy of the Commonwealth, through the exercise by the General Assembly of its power to regulate commerce partly or wholly within the Commonwealth of Virginia, to correct as rapidly as practicable such inequities as may exist in the franchise system so as to establish a more even balance of power between franchisors and franchisees; to require franchisors to deal fairly with their franchisees with reference to all aspects of the franchise relationship and to provide franchisees more direct, simple, and complete judicial relief against franchisors who fail to deal in a lawful manner with them. Va.Code s 13.1-558 (Repl.Vol.1978). The Court in Principe deferred judgment on the issue presented since under the particular posture of that case a determination of the existence of such a cause of action was not necessary. This issue is now squarely before the Court and the Court concludes that the enforcement of the public policy of Virginia, as expressed in Va.Code s 13.1-558, is to be achieved primarily by the utilization of the procedures set forth for the governance of franchise systems by the State Corporation Commission and by criminal sanctions. Self-help by means of private civil actions are specifically provided for in the Act but have a narrow application. Section 13.1-571 provides for civil remedies only when there has been (1) an unlawful cancellation of a franchise; (2) undue influence to induce the surrender of a franchise right (s 13.1-564); and (3) when a franchisee declares the franchise void (s 13.1-565). With such a comprehensive and explicit enforcement scheme set forth in the statutes, the Court is inclined to believe that no additional cause of action for the breach of fiduciary duty in the franchise context can be implied from the policy statement. The plaintiffs further contend that a cause of action for breach of fiduciary duty is implicit in Va.Code s 13.1-571(d) (Repl.Vol.1978). The Court disagrees. That section provides that “(t)he rights and remedies provided (in) this section shall be in addition to any and all other rights and remedies that may exist (in) law (and) equity.” … Va.Code s 13.1-571(d) (1978 Repl.) in no way provides an additional remedy to plaintiffs under the Virginia Retail Franchising Act. It merely saves to plaintiffs any other remedies they may have at common law or in equity. Therefore, a cause of action for the breach of fiduciary duty in the franchise context cannot be implied from Va.Code s 13.1-571(d)”).

Principe v. McDonald's Corp., 463 F.Supp. 1149, E.D.Va. 1979 {“Defendants have moved, pursuant to Fed.R.Civ.P. 56, for summary judgment in regard to Count XIII of the plaintiffs' complaint. This count alleges a failure on the part of the defendants to deal in good faith as allegedly required by the Virginia Retail Franchising Act, Va.Code s 13.1-557 Et seq. (1978 Repl.). The matter having been fully briefed, it is ready for adjudication by the Court. It is not necessary for the Court to decide whether or not Va.Code s 13.1-558 (1978 Repl.), establishing that it is the policy of the Commonwealth that franchisers deal fairly with their franchisees, gives to plaintiffs a cause of action for failure on the part of the defendants to deal with the plaintiffs in good faith. This is because, as noted above, Va.Code s 13.1-571 (1978 Repl.) requires plaintiffs to proceed either under Va.Code s 13.1-565 (1978 Repl.) or Va.Code s 13.1-564 (1978 Repl.). And plaintiffs cannot proceed under either section. As plaintiffs do not wish to void their franchise, they cannot proceed under Va.Code s 13.1-565 (1978 Repl.) and as there is no allegation of cancellation of the franchise, the only way plaintiffs could proceed under s 13.1-564 is by alleging that the defendants used undue influence to induce the plaintiffs to surrender rights given to them by the franchise. But Fed.R.Civ.P. 56(e) requires that the plaintiffs do something more than rest upon the mere allegations of their pleadings. In order to defeat a motion for summary judgment, they must set forth specific facts showing that there is a genuine issue for trial or, according to Fed.R.Civ.P. 56(f), why they cannot set forth such facts. Plaintiffs have failed to meet the requirements of the Federal Rules and thus the piecing together by the Court of portions of plaintiffs' complaint cannot serve to defeat defendants' motion for summary judgment. As plaintiffs are not able to proceed under either Va.Code s 13.1-564 (1978 Repl.) or Va.Code s 13.1-565 (1978 Repl.), and as Va.Code s 13.1-571 (1978 Repl.) gives them no other civil remedies under the Act, plaintiffs allegation in Count XIII of the complaint that defendants failed to deal with them in good faith as required by the Act is a count that must be dismissed pursuant to defendants' motion for summary judgment.”)

Grandstaff v. Mobil Oil Corp., 1978 WL 1458, E.D.Va. 1978 {“Plaintiff's final cause of action is predicated upon § 13.1-564 of the Retail Franchising Act. As a threshold matter, plaintiff submits that the provisions of that Act are applicable to petroleum franchise agreements executed prior to 1978.30 He then proceeds to argue that his lease was wrongfully “cancelled” without reasonable cause under the terms of § 13.1-564 of the Retail Franchising Act.31 Acceptance of this argument, however, would also ascribe to the statute a meaning clearly inconsistent with its express terms. Assuming for purposes of summary judgment that the Retail Act applied to plaintiff's agreements with Mobil, the prohibition of cancellations contained in § 13.1-564 does not impinge upon a franchisor's right not to renew a franchise agreement that expires on its terms. Nor does that section impose a continuing duty of renewal in the absence of reasonable cause for nonrenewal as contemplated by various other franchise acts in the Virginia Code. See the Petroleum Products Franchise Act, Va. Code Ann. § 59.1-21.14(B) (Cum. Supp. 1978); the Motor Vehicle Dealer Franchise Act, Va. Code Ann. § 46.1-547 (Cum. Supp. 1978); the Beer Franchise Act, § 4-118.7 (Cum. Supp. 1978). Instead the Court agrees with defendant that the use of the term “cancel” in the Retail Act was intended to prohibit abrogation of an existing contractual relationship between a franchisor and franchisee before the end of its term. In this case the proscribed cancellation did not occur. The 1974 lease agreement between plaintiff and Mobil expired by its terms on July 31, 1976. The three month extension period was an accommodation to plaintiff and its expiration could in no way be reasonably construed as an unlawful cancellation. Accordingly, summary judgment should be granted in favor of defendant on count four.”}

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