Protection of Multiline Sellers by State Relationship Statutes

Fifteen states, Puerto Rico, and the Virgin Islands have Stat? utes that provide franchisees some protection against ter? mination of their franchises.1 The protection afforded by these so-called "relationship" statutes ranges from Wiscon? sin's requirement that termination or nonrenewal be for good cause to Mississippi's requirement of ninety days' prior written notice of termination or nonrenewal.2 These statutes clearly were intended to protect the tradi? tional, business-format franchisee, such as the McDonald's franchisee. Do they also protect multiline sellers? By mul? tiline sellers, we mean sellers who sell goods or services sup? plied by more than one supplier, such as wine and spirits wholesalers, outdoor power equipment distributors, office machinery retailers, food wholesalers, agricultural imple? ment dealers, industrial equipment distributors, appliance repair service centers, home furnishings retailers and a mul? titude of others. Multiline sellers have had little success in convincing courts that they are protected by the relationship laws. In many instances the statutory language raises an obvious and insuperable barrier. For example, if the statute protects only businesses that pay franchise fees, and the multiline seller did not pay a franchise fee to the terminating supplier, the lawsuit is over before it starts. In other instances, the stat? utory language has left the result in doubt, and courts have been obliged to inquire into legislative purpose. Courts in most cases have concluded that the legislature did not in? tend to protect multiline sellers. In general, the courts see