Arizona § 44-1556 - Termination of franchise; notice; grounds

§ 44-1556. Termination of franchise; notice; grounds

A. It is a violation of this article for any distributor, directly or indirectly, or through an officer, agent or employee to terminate, cancel or fail to renew a franchise without having first given written notice as follows:

1. No cancellation or termination of the franchise shall be effective unless distributor shall have first given dealer a written notice of distributor's intent to cancel the franchise specifying all matters of claimed noncompliance with the franchise agreement, allowing dealer at least ten days to comply with the terms of the franchise agreement. In the event of dealer's noncompliance, termination shall be effective the date set forth in the notice.

2. Within at least thirty days in advance of the expiration of a term of a franchise, distributor shall in writing give dealer notice of:

(a) Distributor's intention not to renew the franchise and all the reasons for such failure to renew, or,

(b) Distributor's intention to renew and if such renewal is subject to any change in price, rent, terms or conditions from that of the franchise being renewed, then all such changes and the reasons therefor shall be fully described therein.

3. Where the alleged grounds are voluntary abandonment by the dealer of the franchise relationship, such written notice may be given three days in advance of such termination or cancellation.

4. Where the alleged grounds are the conviction of the dealer of a crime related to the business conducted pursuant to the franchise, termination, cancellation or failure to renew may be effective immediately.

B. All notices required of dealer or distributor under this article shall be given in writing by certified mail return receipt requested to the address indicated in the franchise agreement or as subsequently changed by the party in writing or if no address was designated, to the party's place of business.

C. The failure of a distributor to serve notice upon the dealer as required in this section shall constitute a grant of the option by the distributor to the dealer to renew the franchise for a period of one year under the same price, rent, terms and conditions of the expiring franchise, subject to the provisions of this article. Such option to renew shall expire forty-five days from the date notice should have been served, unless exercised by written notice to the distributor.