Code Section Group

Business and Professions Code - BPC

DIVISION 8. SPECIAL BUSINESS REGULATIONS [18400 - 22948.25]

  ( Division 8 added by Stats. 1941, Ch. 44. )

CHAPTER 7.9. Hours of Business [21150 - 21150.1]
  ( Chapter 7.9 added by Stats. 1974, Ch. 1015. )

21150.
  

For purposes of this chapter, the following terms shall have the following meanings:

(a) “Franchise” means any contract between a refiner and a distributor, between a refiner and a retailer, between a distributor and another distributor, or between a distributor and a retailer, under which a refiner or distributor authorizes or permits a retailer or distributor to use, in connection with the sale, consignment, or distribution of fuel, a trademark which is owned or controlled by such refiner or by a refiner which supplies fuel to the distributor which authorizes or permits such use. The term “franchise” includes the following:

(1) Any contract under which a retailer or distributor is authorized or permitted to occupy leased marketing premises, which premises are to be employed in connection with the sale, consignment, or distribution of fuel under a trademark which is owned or controlled by such refiner or by a refiner which supplies fuel to the distributor which authorizes or permits such occupancy.

(2) Any contract pertaining to the supply of fuel which is to be sold, consigned, or distributed under a trademark owned or controlled by a refiner, or under a contract which has existed continuously since May 15, 1973, and pursuant to which, on May 15, 1973, fuel was sold, consigned, or distributed under a trademark owned and controlled on such date by a refiner.

(3) The unexpired portion of any franchise, as defined by the preceding provisions of this paragraph, which is transferred or assigned as authorized by the provisions of such franchise or by any applicable provision of state law which permits such transfer or assignment without regard to any provision of the franchise.

(b) “Franchisor” means a refiner or distributor who authorizes or permits, under a franchise, a retailer or distributor to use a trademark in connection with the sale, consignment, or distribution of fuel.

(c) “Franchisee” means a retailer or distributor who is authorized or permitted, under a franchise, to use a trademark in connection with the sale, consignment, or distribution of fuel.

(d) “Refiner” means any person engaged in the refining of crude oil to produce fuel, and includes any affiliate of such person.

(e) “Distributor” means any person, including any affiliate of such person, who either purchases fuel for sale, consignment, or distribution to another, or receives fuel on consignment for consignment or distribution to his or her own fuel accounts or to accounts of his or her supplier, but shall not include a person who is an employee of, or merely serves as a common carrier providing transportation service for, such supplier.

(f) “Retailer” means any person who purchases fuel for sale to the general public for ultimate consumption.

(g) “Marketing premises” means, in the case of any franchise, premises which, under such franchise, are to be employed by the franchisee in connection with the sale, consignment, or distribution of fuel.

(h) “Leased marketing premises” means marketing premises owned, leased, or in any way controlled by a franchisor and which the franchisee is authorized or permitted, under the franchise, to employ in connection with the sale, consignment, or distribution of fuel.

(i) “Contract” means any oral or written agreement. For supply purposes, delivery levels during the same month of the previous year shall be prima facie evidence of an agreement to deliver such levels.

(j) “Trademark” means any trademark, trade name, service mark, or other identifying symbol or name.

(k) “Fuel” means gasoline, diesel, gasohol, or aviation fuel.

(l) “Affiliate” means any person who, other than by means of a franchise, controls, is controlled by, or is under common control with, any other person.

(Repealed and added by Stats. 1981, Ch. 90, Sec. 9.)

21150.1.
  

(a) In all future franchise agreements no retail gasoline dealer who operates pursuant to a franchise shall be required by the franchisor to operate the service station during hours that are not profitable to the franchisee, provided that the hours of operation that are maintained by the franchisee are for a continuing period of time.

(b) In the event that the terms and conditions of the franchise require the franchisee to maintain hours of operation that the franchisee has determined in good faith to be unprofitable, the franchisee shall notify the franchisor in writing of his or her determination that a certain period or periods are not profitable and provide the franchisor with any statements, studies, analyses, summaries, business records, or other documents that the franchisee prepared or reviewed to determine that operation of the service station during the period or periods specified in the notice were unprofitable.

(c) In the event that the franchisor in good faith is not satisfied that the operation of the service station is not profitable during the periods specified in the notice after the franchisor has reviewed the statements, studies, analyses, summaries, business records, or other documents submitted by the franchisee, the franchisor may prepare its own statements, studies, analyses, summaries, business records, or other documents regarding the profitability of operation of the service station during the period specified by the franchisee. The franchisee shall reimburse the franchisor for the actual cost incurred by the franchisor in preparing any statements, studies, analyses, summaries, business records, or other documents to verify the franchisee’s determination that it is not profitable to operate during the period or periods specified in the notice, not to exceed the sum of three hundred dollars ($300).

(d) In the event that the franchisor and franchisee still do not agree regarding the profitability of certain hours of operation, the franchisor and franchisee shall conduct arbitration in accordance with the rules of the American Arbitration Association. The decision of the arbitrator shall be final.

(e) The franchisee may establish and maintain the hours of operation of the service station without regard to the hours specified in the franchise:

(1) If the franchisor fails to notify the franchisee of his or her intent to prepare statements, studies, analyses, summaries, business records, or other documents to verify the franchisee’s determination that it is not profitable to operate during the period or periods specified in the notice within 15 days after receipt of the franchisee’s notice.

(2) If the franchisor fails to complete the preparation of the statements, studies, analyses, summaries, business records, or other documents within 30 days after the receipt of notice from the franchisee.

(3) If it is established pursuant to subdivisions (b) to (d), inclusive, that the operation of the service station is not profitable during the period or periods specified by the franchisee.

(f) For the purposes of this section, the terms “unprofitable” and “not profitable” shall mean that the amount of the gross revenues generated by the sales of motor fuels and other petroleum products, as well as related automotive accessories, is less than the amount of the expenses incurred by the franchisee to operate during the period or periods the franchisee specified in the written notice, including the proportionate costs for rent, labor, or other fixed or variable overhead costs that may be reasonably allocated to the operation of the service station during the period or periods that the franchisee specified in the written notice.

(g) This section shall not apply:

(1) Where specific hours of business or operation are required under the franchisor’s prime lease or license from any governmental entity, airport, parking, marine or port authority, shopping center, or any private investor not affiliated with or controlled by the franchisor; or,

(2) Where the retail gasoline station subject to the franchise agreement is located within one-half mile access of any highway which is a part of the California freeway and expressway system, provided, however, that if there is not commercial property developed as a service station within one-half mile of an entry to or exit from any such highway, the exception shall extend to the first such development and extend one-quarter mile beyond in all directions. This section is also not applicable to any business which is not primarily a gasoline station, but which sells gasoline incidentally to its business.

(Amended by Stats. 1982, Ch. 599, Sec. 1.)

BPCBusiness and Professions Code - BPC