Opinion ID: 480778
Heading Depth: 3
Heading Rank: 1

Heading: Franchise Versus Franchise Relationship

Text: 29 The PMPA prohibits the nonrenewal of a franchise relationship unless based upon one of the specified grounds. 15 U.S.C. Sec. 2802(a) and (b)(1). The terms franchise and franchise relationship have two distinct meanings under the PMPA. 30 Franchise is the combination of the franchisee's use of a franchisor's trademark, the lease of a service station, and the motor fuel supply contract. 15 U.S.C. Sec. 2801(1)(B); Prestin v. Mobil Oil Corp., 741 F.2d 268, 272 (9th Cir.1984). In contrast, the concept of a franchise relationship is an entity separate from, but defined by, the 'franchise,' or contractual arrangement existing between the parties. Frisard v. Texaco, 460 F.Supp. 1094, 1097 (E.D.La.1978), quoted in Rogue Valley Stations, Inc. v. Birk Oil Co., 568 F.Supp. 337, 340 (D.Or.1983). The franchise relationship is the respective ... obligations and responsibilities of a franchisor and a franchisee which result from the marketing of motor fuel under a franchise. 15 U.S.C. Sec. 2801(2). 31 The significance of this term is that it is the franchise relationship, as distinguished from the specific terms of a prior contract, that the franchisor must renew. Finch, Judicial Interpretation of the Petroleum Marketing Practices Act: Strict Construction of Remedial Legislation, 37 Bus.Law. 141, 143 (1981). Congressional intent in this matter is clear: 32 [B]ecause the title contemplates changes in the specific provisions of the franchise agreement at the time of renewal, the title requires renewal of the relationship between the parties as distinguished from a continuation or extension of the specific provisions of the franchise agreement. 33 S.Rep. No. 731, 95th Cong., 2d Sess., 30 (1978), reprinted in 1978 U.S.Code Cong. & Ad.News 873, 888. 34 Since renewal of the franchise relationship can be based on terms and conditions substantially different from those of the original franchise, see, e.g., Scheele v. Mobil Oil Corp., 510 F.Supp. 633, 635 (D.Mass.1981), Svela's contention that Union was unable to legally change his full-serve lease to a fast-serve fails.