8-1-5. Franchisor Prohibited from Requiring Franchisee to Operate on a Religious Day; Exception; Violations.
(a) For purposes of this section, the following terms have the following meanings:
(1) FRANCHISE AGREEMENT. A written agreement or an amendment or renewal of a written agreement, or in the absence of a written agreement, a course of practice, in which a person grants to another person a license to use a trade name, trademark, service mark, or related characteristic in exchange for the payment of a franchise fee. The term includes a sales and service agreement other than a sales and service agreement regulated by Chapter 20, The Motor Vehicle Franchise Act; Chapter 8A of Tile 28; or Chapter 9 of Title 28.
(2) FRANCHISEE. a. A person with whom a franchisor has agreed or permitted, in writing or in practice, to purchase, sell, or offer for sale a product manufactured, produced, represented, or distributed by the franchisor in exchange for the payment of a franchise fee from the franchisee to the franchisor.
b. The term does not include a person regulated under Chapter 20, The Motor Vehicle Franchise Act; Chapter 8A of Title 28; Chapter 9 of Title 28; or Chapter 15 of Title 34.
(3) FRANCHISOR. a. A person that has agreed with or permits, in writing or in practice, a franchisee to purchase, sell, or offer for sale a product manufactured, produced, assembled, represented, or distributed by the franchisor. The term includes: (i) the manufacturer, producer, assembler, or distributor of the product; (ii) an intermediate distributor; and (iii) an agent, officer, or field or area representative of the franchisor.
b. The term does not include a person regulated under Chapter 20, The Motor Vehicle Franchise Act; Chapter 8A of Title 28; Chapter 9 of Title 28; or Chapter 15 of Title 34.
(4) ORIGINAL FRANCHISE AGREEMENT. A franchise agreement that is not a renewal or an amendment. The term includes any written documents incorporated into the agreement by reference.
(5) RELIGIOUS DAY OPERATION REQUIREMENT. Any requirement that has the effect of requiring a franchisee to operate a franchise on a day when doing so would conflict with the franchisee’s sincerely held religious beliefs.
(b) Except as provided in subsection (c), when a franchisee asserts a sincerely held religious belief, a franchisor may not:
(1) Enforce a religious day operation requirement;
(2) Require a franchisee to accept a religious day operation requirement as part of an amendment to the franchise agreement; or
(3) Refuse to renew a franchise agreement based on a franchisee’s decision to not comply with a religious day operation requirement.
(c) Subsection (b) does not apply and a franchisor is not prohibited from enforcing a religious day operation requirement when:
(1) The original franchise agreement or franchise agreement then in effect conspicuously provides for operation on a day that imposes a religious day operation requirement;
(2) The franchisee agrees through a renewal or an amendment to the franchise agreement to a religious day operation requirement; or
(3) The franchisor and the franchisee enter a franchise agreement expanding the franchisee’s number of franchise locations which contains a religious day operation requirement.
(d) If a court finds reasonable cause to believe that a franchisor violated subsection (b), the court may order:
(1) Actual damages, reasonable attorney fees, and costs to the franchisee;
(2) A permanent or temporary injunction, a temporary restraining order, or other appropriate order; and
(3) Civil penalties against the franchisor in an amount not exceeding:
a. Ten thousand dollars ($10,000) for a first violation;
b. Twenty-five thousand dollars ($25,000) for an additional violation within the five-year period ending on the day on which the franchisee filed the complaint; or
c. Fifty thousand dollars ($50,000) for an additional violation within the seven-year period ending on the day on which the franchisee filed the complaint.
(Act 2026-591, §1.)
