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VA SB240
Bill
Status
Engrossed
2/5/2026
Primary Sponsor
Chris Head
Click for details
AI Summary
- Requires all retail franchise agreements in Virginia to be governed by Virginia law, regardless of any choice-of-law provisions in the contract
- Prohibits franchise agreements from restricting a franchisee's right to engage in retail business after the franchise terminates or expires (bans post-termination non-compete clauses)
- Allows a limited exception for non-compete restrictions of up to two years when a franchisee voluntarily sells their franchise to a third party or back to the franchisor at a mutually agreed price
- Applies only to franchise agreements entered into, extended, or amended on or after July 1, 2026; existing contracts remain unaffected
- Covers franchises requiring a place of business in Virginia with franchise fees of $500 or more
Legislative Description
Retail franchise agreements; governing law, competition restrictions.
Last Action
Fiscal Impact Statement from State Corporation Commission (SB240)
3/12/2026
Committee Referrals
Labor and Commerce: Subcommittee #22/24/2026
Labor and Commerce2/12/2026
Commerce and Labor1/12/2026
Full Bill Text
No bill text available