(A) (1) Whenever a grantor has reason to believe that a grantee has violated any material provision of a franchise agreement or this chapter, the grantor shall first notify the grantee of the material violation and demand correction within a reasonable time, which shall not be less than 20 days in the case of the failure of a grantee to pay any sum or other amount due the grantor under a franchise agreement, and 30 days in all other cases.
(2) If a grantee fails to correct the violation within the time prescribed, or if a grantee is unable to correct the violation and fails to commence corrective action within the time prescribed and to diligently remedy the violation thereafter, the grantee shall then be given written notice of not less than 20 days for public comment.
(3) The notice shall indicate with reasonable specificity the violation alleged to have occurred.
(B) (1) At the public hearing, the Board shall hear and consider all relevant evidence and thereafter render findings and a decision based upon the evidence.
(2) Any such hearing must, at a minimum, provide the grantee a full and fair opportunity to be heard by the Board.
(C) In the event the Board finds that a grantee has corrected the violation or promptly commenced correction of the violation after notice thereof from the grantor and is diligently proceeding to fully remedy the violation, or that no violation has occurred, the proceedings shall terminate and no penalty or other sanction shall be imposed.
(D) In the event the Board finds that a violation exists and that a grantee has not corrected the same in a satisfactory manner or did not promptly commence and diligently proceed to correct the violation, the Board may impose liquidated damages to be collected from the security fund, as set out in the franchise agreement.
(E) (1) If the Board elects to assess liquidated damages, then the election shall constitute the grantor’s exclusive remedy for a period of 60 days.
(2) Thereafter, if a grantee remains in non-compliance, the grantor may pursue any other available remedy.
(F) In the event that a franchise is cancelled or terminated by reason of the default of a grantee, the security fund deposited pursuant to a franchise agreement shall remain in effect and available to the grantor until all pending claims or penalties are resolved or settled, after which point any remaining amounts in the security fund shall revert to the grantee.
(G) The rights reserved to the grantor with respect to the security fund are in addition to all other rights of the grantor, whether reserved by a franchise agreement, this chapter, or authorized by law, and no action, proceeding, or exercise of a right with respect to the security fund shall affect any other right the grantor may have.
(H) (1) In instances of repeated violations, whether remedied or not, the grantor shall serve special notice outlining additional remediation requirements.
(2) Failure to cure, as measured by repeated instances of the same violation, is evidence of an evasive practice and may lead to revocation under § 113.128.
(Ord. passed 8-27-02)