17Renewal of franchise agreement

#### 17 Renewal of franchise agreement (1) Subject to this section and sections 17A and 17B, a franchisor shall not fail or refuse to renew the franchise agreement except on one or more of the following grounds: (a) the existence of circumstances, or the occurrence of an event, of a kind referred to in any of paragraphs 16(2)(a) to (k) (inclusive); (b) the franchisee rejects a proposal made in accordance with subsection 17A(2) in a notice served under subsection 17A(1); (c) the number of litres of motor fuel supplied under the agreement (in this paragraph referred to as the relevant agreement) or a related agreement by prescribed persons that was sold by retail or on behalf of the franchisee at the marketing premises during any of the 3 years immediately preceding the date of expiry of the relevant agreement was less than 360,000 or such other number as is prescribed; (d) the franchisor proposes, in good faith and in the normal course of business: (i) to enter into an agreement, or negotiations for an agreement, to grant a lease of the marketing premises to a person other than an associate of the franchisor wholly for purposes other than the retail sale of motor fuel; or (ii) to enter into an agreement, or negotiations for an agreement, (other than an agreement containing a provision having the effect of prohibiting the use of the marketing premises for the retail sale of motor fuel) to dispose of the whole of its interest in the marketing premises to a person other than an associate of the franchisor and not to acquire or re‑acquire any interest in the premises; (e) the franchisor proposes, in good faith and in the normal course of business: (i) to occupy and use the marketing premises wholly for purposes other than the retail sale of motor fuel; or (ii) to redevelop the marketing premises wholly or principally for purposes other than the retail sale of motor fuel, whether the premises are to be used for those purposes by the franchisor or another person. (2) A franchisor shall not enter into an agreement to dispose of its interest in the marketing premises to a person other than the franchisee or an associate of the franchisee unless: (a) by notice in writing served on the franchisee at least 30 days before entering into the agreement, the franchisor has offered the interest to the franchisee or an associate of the franchisee on terms that were no less favourable than the terms of the agreement with that person; or (b) the agreement was entered into in the following manner, namely, the franchisor offered the interest for sale at a public auction of which at least 30 day’s notice in writing was served on the franchisee, and the franchisor: (i) sold the interest at the auction to a person other than an associate of the franchisor; or (ii) sold the interest by private treaty, after the auction, to a person other than an associate of the franchisor for a price not lower than the amount of the highest bid at the auction and, subject to subsection (3), on other terms substantially the same as the terms on which the interest was so offered. (3) Where, in pursuance of an offer made, or agreement entered into, in accordance with subsection (2), a franchisor disposes of its interest in the marketing premises to the franchisee or an associate of the franchisee (in this subsection and in subsection (4) referred to as the relevant person), then, if there is included in the terms of the disposition or in any collateral agreement: (a) a provision having the direct or indirect effect of requiring a fixture on the premises to be removed or rendered useless, whether before or after the transfer of the premises; (b) a provision having the direct or indirect effect of entitling the franchisor to remove or render useless a fixture on the premises; or (c) any other provision that would prevent the relevant person from, or impede that person in, carrying on the business of selling motor fuel by retail at the premises (whether or not that person actually wishes to do so); the provision is void. (4) Subsection (3) does not apply to a provision having the effect that a fixture on the premises is to be, or may be, removed or rendered useless by the franchisor with the consent of the relevant person. (5) Except where paragraph 17A(4)(b) applies, if, before the date of expiry of a franchise agreement: (a) the franchisor, in the manner described in paragraph (1)(d), proposed to enter into an agreement, or negotiations for an agreement, of a kind referred to in paragraph (1)(d); and (b) the franchise agreement is not renewed; the term of the agreement shall be deemed to be extended until whichever of the following first occurs, namely: (c) the lease is granted as described in subparagraph (1)(d)(i) or the disposition occurs as described in subparagraph (1)(d)(ii), as the case may be; (d) the expiration of the period of 6 months after the date of expiry of the franchise agreement; or (e) a time agreed upon between the franchisor and the franchisee. (6) If, at the expiration of the period referred to in paragraph (5)(d), the lease has not been granted as described in subparagraph (1)(d)(i) or the disposition has not occurred as described in subparagraph (1)(d)(ii), as the case may be: (a) paragraph (1)(d) ceases to be a ground for failure or refusal to renew the franchise agreement; (b) unless the franchisee has consented in writing to its non‑renewal, the franchisor shall renew the franchise agreement; and (c) if the franchise agreement is renewed, the rate of the amounts payable by the franchisee under the franchise agreement may, in the agreement as renewed, be increased to such extent as is agreed upon between the franchisee and the franchisor or, failing agreement, as is determined by a court, having regard to the market value of any interest, goods or services to which those amounts relate. (7) In this section, date of expiry, in relation to an agreement, means the day immediately following the last day on which, or on part of which, the term of the agreement is current.