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C. GROUNDS FOR TERMINATION  :  6. § 2802(b)(2)(E) Market withdrawal (3 year franchise)
  • Santiago-Sepulveda [V] v. Esso Standard Oil Company (Puerto Rico), 2012 U.S. Dist. LEXIS 37774 (D.P.R. 3-19-12)

    Summary judgment granted to franchisor on franchisees' claims that franchisor's market withdrawal was not in good faith. Court found that the determination to withdraw was made in good faith, after renewal of the plaintiffs' franchises, and that there were changes in relevant facts after the renewals, specifically, the conclusion of negotiations with the buyer of the franchisor's assets. Additionally, the fact that the new supplier offered new agreements on a "take-it-or-leave-it" basis did not create an inference of bad faith, even though some terms in the offered agreements were at odds with state contract or franchise law. (There is a severability clause in the agreements, and the offending terms were invalidated in a prior decision in this case.)


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