Virginia legislation · 2026 Regular Session
Virginia SB240: An Act to amend and reenact §§ 13.1-559 and 13.1-563 of the Code of Virginia, relating to retail franchise agreements; governing law; competition restrictions.
Status: Chaptered, April 13, 2026
Retail franchise agreements; governing law; competition restrictions. Provides that retail franchise agreements shall be governed by the laws of the Commonwealth and prohibits any person from offering or entering into a franchise agreement that includes competition restrictions that extend beyond termination or expiration of the franchise agreement, except as a term of sale in the event that a franchisee sells a franchise to a third party or back to the franchisor. This bill is identical to HB 69.
What the bill says
An Act to amend and reenact §§ 13.1-559 and 13.1-563 of the Code of Virginia, relating to retail franchise agreements; governing law; competition restrictions. [S 240] Approved April 13, 2026 1. That §§ 13.1-559 and 13.1-563 of the Code of Virginia are amended and reenacted as applicability of chapter. A. As used in this chapter, unless the context otherwise requires: "Commission" means the State Corporation Commission. "Controlling person" means a natural person who is an officer, director, or partner, or who occupies a similar status or performs a similar function, of a franchisor organized.
From the enrolled text, April 13, 2026:
An Act to amend and reenact §§ 13.1-559 and 13.1-563 of the Code of Virginia, relating to retail franchise agreements; governing law; competition restrictions. [S 240] Approved April 13, 2026 1. That §§ 13.1-559 and 13.1-563 of the Code of Virginia are amended and reenacted as applicability of chapter. A. As used in this chapter, unless the context otherwise requires: "Commission" means the State Corporation Commission. "Controlling person" means a natural person who is an officer, director, or partner, or who occupies a similar status or performs a similar function, of a franchisor organized as a corporation, partnership, or other entity, or any person who possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of a franchisor, whether through the ownership of voting securities, by contract, or otherwise. "Franchise" means a written contract or agreement between two or more persons, by 2. The operation of the franchisee's business pursuant to such plan or system is substantially associated with the franchisor's trademark, service mark, trade name, logotype, advertising or other commercial symbol designating the franchisor or its affiliate; and 3. The franchisee is required to pay, directly or indirectly, a franchise fee of $500 or more. "Franchise fee" means a fee or charge for the right to enter into or maintain a business …