135.01 Annotation This chapter was enacted for the protection of the interests of the dealer whose economic livelihood may be imperiled by the dealership grantor, whatever its size. Rossow Oil Co. v. Heiman, 72 Wis. 2d 696, 242 N.W.2d 176 (1976).
135.01 Annotation This chapter covers only agreements entered into after April 5, 1974. Wipperfurth v. U-Haul Co. of Western Wis., Inc. 101 Wis. 2d 586, 304 N.W.2d 767 (1981).
135.01 Annotation This chapter is constitutional; it may be applied to out-of-state dealers when provided by contract. C. A. Marine Sup. Co. v. Brunswick Corp. 557 F.2d 1163. See: Boatland, Inc. v. Brunswick Corp. 558 F.2d 818.
135.01 Annotation When a dealer did not comply with all the terms of acceptance of a dealership agreement, no contract was formed and this chapter did not apply. Century Hardware Corp. v. Acme United Corp. 467 F. Supp. 350 (1979).
135.01 Annotation Dealing with the dealers: Scope of the Wisconsin fair dealership law. Axe, WBB Aug. 1981.
135.01 Annotation The fair dealership law: Good cause for review. Riteris and Robertson, WBB March, 1986.
135.01 Annotation Changing Business Strategy Under the Wisconsin Fair Dealership Law. Laufer. Wis. Law. March 1991.
135.01 Annotation Avoiding the Accidental Franchise. Modell & Fittante. Wis. Law. May 2003.
135.01 Annotation Determining “Community of Interest" Under the WFDL. Wright. Wis. Law. Dec. 2004.
135.01 Annotation Understanding the Wisconsin Fair Dealership Law. Wright & Aquino. Wis. Law. Nov. 2009.
135.02 135.02 Definitions. In this chapter:
135.02(1) (1)“Community of interest" means a continuing financial interest between the grantor and grantee in either the operation of the dealership business or the marketing of such goods or services.
135.02(2) (2)“Dealer" means a person who is a grantee of a dealership situated in this state.
135.02(3) (3)“Dealership" means any of the following:
135.02(3)(a) (a) A contract or agreement, either expressed or implied, whether oral or written, between 2 or more persons, by which a person is granted the right to sell or distribute goods or services, or use a trade name, trademark, service mark, logotype, advertising or other commercial symbol, in which there is a community of interest in the business of offering, selling or distributing goods or services at wholesale, retail, by lease, agreement or otherwise.
135.02(3)(b) (b) A contract or agreement, either expressed or implied, whether oral or written, between 2 or more persons by which a wholesaler, as defined in s. 125.02 (21), is granted the right to sell or distribute intoxicating liquor or use a trade name, trademark, service mark, logotype, advertising or other commercial symbol related to intoxicating liquor. This paragraph does not apply to dealerships described in s. 135.066 (5) (a) and (b).
135.02(4) (4)“Good cause" means:
135.02(4)(a) (a) Failure by a dealer to comply substantially with essential and reasonable requirements imposed upon the dealer by the grantor, or sought to be imposed by the grantor, which requirements are not discriminatory as compared with requirements imposed on other similarly situated dealers either by their terms or in the manner of their enforcement; or
135.02(4)(b) (b) Bad faith by the dealer in carrying out the terms of the dealership.
135.02(5) (5)“Grantor" means a person who grants a dealership.
135.02(6) (6)“Person" means a natural person, partnership, joint venture, corporation or other entity.
135.02 Annotation A cartage agreement between an air freight company and a trucking company did not create a “dealership" under this chapter. Kania v. Airborne Freight Corp. 99 Wis. 2d 746, 300 N.W.2d 63 (1981).
135.02 Annotation A manufacturer's representative was not a “dealership." Foerster, Inc. v. Atlas Metal Parts Co. 105 Wis. 2d 17, 313 N.W.2d 60 (1981).
135.02 Annotation This chapter applies exclusively to dealerships that do business within the geographic confines of the state. Swan Sales Corp. v. Jos. Schlitz Brewing Co. 126 Wis. 2d 16, 374 N.W.2d 640 (Ct. App. 1985).
135.02 Annotation Two guideposts for determining the existence of a “community of interest" under sub. (3) are: 1) a shared financial interest in the operation of the dealership or the marketing of a good or service; and 2) the degree of cooperation, coordination of activities, and sharing of common goals in the parties' relationship. Ziegler Co., Inc. v. Rexnord, Inc. 139 Wis. 2d 593, 407 N.W.2d 873 (1987).
135.02 Annotation A substantial investment distinguishes a dealership from a typical vendee-vendor relationship; establishing a loss of future profits is not sufficient. Gunderjohn v. Loewen-America, Inc. 179 Wis. 2d 201, 507 N.W.2d 115 (Ct. App. 1993).
135.02 Annotation Contracts between an HMO and chiropractors for the provision of chiropractic services to HMO members did not did not establish the chiropractors as dealerships under ch. 135. Bakke Chiropractic Clinic v. Physicians Plus Insurance, 215 Wis. 2d 605, 573 N.W.2d 542 (Ct. App.1997), 97-1169.
135.02 Annotation A dealership is a contract or agreement establishing a particular sort of commercial relationship that encompasses an extraordinary diverse set of business relationships not limited to the traditional franchise. The focus of the analysis must be on whether the business relationship can be said to be situated in the state after examining a broad set of factors outlined by the court. Baldewein Company v. Tri-Clover, Inc. 2000 WI 20, 233 Wis. 2d 57, 606 N.W.2d 145, 99-0541. See also Baldewein Company v. Tri-Clover, Inc. 183 F. Supp. 2d 1116 (2002).
135.02 Annotation Assuming without deciding that the size of the local economy relative to the cost of the putative dealer's inventory of the grantor's products is a relevant factor in determining the existence of a community of interest, that factor did not demonstrate the existence of a community of interest in this case. Moe v. Benelli U.S.A. Corp. 2007 WI App 254, 306 Wis. 2d 812, 743 N.W.2d 691, 06-1512.
135.02 Annotation Under sub. (2), a “dealer" is defined in ch. 135 to mean “a person who is a grantee of a dealership situated in this state." Sub. (3) defines “dealership" in part as “contract or agreement . . . between 2 or more persons, by which a person is granted the right to sell or distribute goods or services . . ..” Sub. (6) defines “person" as “a natural person, partnership, joint venture, corporation or other entity” and a city is a municipal corporation. Under s. 990.01 (26), “person" includes all partnerships, associations, and bodies politic and corporate. The general term “corporation" presumptively should be read to include more specific types of corporations. Under the facts of this case, the relationships between the defendant city and the golf pro plaintiffs who operated its golf courses constituted “dealerships" under sub. (3). Benson v. City of Madison, 2017 WI 65, 376 Wis. 2d 35, 897 N.W.2d 16, 15-2366.
135.02 Annotation A wine grantor-dealer relationship is not included within the definition of a dealership in sub. (3) (b). Section 135.066 (2) provides the operative definition of intoxicating liquor for purposes of this chapter, and that definition explicitly excludes wine. Winebow, Inc. v. Capitol-Husting Co., Inc. 2018 WI 60, 381 Wis. 2d 732, 914 N.W.2d 631, 17-1595.
135.02 Annotation When an otherwise protected party transfers a protected interest to a third party, a “community of interest" is destroyed and the party removed from WFDL protection. Lakefield Telephone Co. v. Northern Telecom, Inc. 970 F.2d 392 (1992).
135.02 Annotation A community of interest exists when a large proportion of a dealer's revenues are derived from the dealership, or when the alleged dealer has made sizable investments specialized in the grantor's goods or services. Frieburg Farm Equip. v. Van Dale, Inc. 978 F.2d 395 (1992).
135.02 Annotation There is no “community of interest" in the sale of services not yet in existence when the availability of the services is dependent on the happening of an uncertain condition. Simos v. Embassy Suites, Inc. 983 F.2d 1404 (1993).
135.02 Annotation This chapter does not protect a manufacturer's representative that lacks the unqualified authorization to sell or the authority to commit the manufacturer to a sale. Sales & Marketing Assoc., Inc. v. Huffy Corp. 57 F.3d 602 (1995).
135.02 Annotation If a grantor is losing substantial money under the dealership relationship, it may constitute “good cause" for changes in the contract, including termination. Morley-Murphy Co. v. Zenith Electronics, Inc. 142 F.3d 373 (1998).
135.02 Annotation This chapter specifies who may take advantage of its protections through the terms “dealer" and “dealership" and obviates the need to resort to conflict of laws principles. Investment in the state without in-state sales does not bring a party within the coverage of the chapter. Generac Corp. v. Caterpillar, Inc. 172 F.3d 971 (1999).
135.02 Annotation A manufacturer's right of approval of its distributors' subdistributors did not create a contractual relationship between the manufacturer and the subdistributor subject to this chapter. Praefke Auto Electric & Battery Company, Inc. v. Tecumseh Products Company, Inc. 255 F.3d 460 (2001).
135.02 Annotation The distinction between a dealer and a manufacturer's representative is discussed. Al Bishop Agency, Inc. v. Lithonia-Division of National Services, Inc. 474 F. Supp. 828 (1979).
135.02 Annotation The employment relationship in question was not a “dealership." O'Leary v. Sterling Extruder Corp. 533 F. Supp. 1205 (1982).
135.02 Annotation The plaintiff was not a “dealer" since money advanced to the company for fixtures and inventory was refundable. Moore v. Tandy Corp. Radio Shack Div. 631 F. Supp. 1037 (1986).
135.02 Annotation It is improper to determine whether under sub. (3) a “community of interest" exists by examining the effect termination has on a division of the plaintiff. U.S. v. Davis, 756 F. Supp. 1162 (1990).
135.02 Annotation The plaintiff's investment in “goodwill" was not sufficient to afford it protection under this chapter. Team Electronics v. Apple Computer, 773 F. Supp. 153 (1991).
135.02 Annotation The “situated in this state" requirement under sub. (2) is satisfied as long as the dealership conducts business in Wisconsin. CSS-Wisconsin Office v. Houston Satellite Systems, 779 F. Supp. 979 (1991).
135.02 Annotation There is no “community of interest" under sub. (3) when there is an utter absence of “shared goals" or “cooperative coordinated efforts" between the parties. Cajan of Wisconsin v. Winston Furniture Co. 817 F. Supp 778 (1993).
135.02 Annotation Even if a person is granted a right to sell a product, the person is not a dealer unless that person actually sells the product. Smith v. Rainsoft, 848 F. Supp. 1413 (1994).
135.02 Annotation Under sub. (3), de minimus use of a trade name or mark is insufficient: there must be substantial investment in it. Satellite Receivers v. Household Bank, 922 F. Supp. 174 (1996).
135.02 Annotation A clause providing that the party who had drafted the contract and dictated all of its provisions was not a party to the contract was void, and that party was a grantor of a dealership. Praefke Auto Electric & Battery Co., Inc. v. Tecumseh Products, Co. 110 F. Supp. 2d 899 (2000).
135.02 Annotation Nothing in the text or legislative history of ch. 135 suggests that the legislature intended to preclude co-ops from being dealers. Sub. (2) defines a dealer as “a person who is a grantee of a dealership." Sub. (6) defines a person as a “corporation or other entity." Under s. 185.02, a co-op is “an association incorporated" in the state. Thus a co-op is a corporation or other entity within sub. (6) and subject to ch. 135. Builder's World, Inc. v. Marvin Lumber & Cedar, Inc. 482 F. Supp. 2d 1065 (2007).
135.02 Annotation In determining whether a plaintiff has a right to sell under the WFDL, the most important factor is the dealer's ability to transfer the product itself, or title to the product, or commit the grantor to a transaction at the moment of the agreement to sell. A manufacturer's representative, defined as an independent contractor who solicits orders for a manufacturer's product from potential customers and is paid a commission on resulting sales, is a position consistently excluded from the WFDL. Northland Sales, Inc. v. Maax Corp. 556 F. Supp. 2d 928 (2008).
135.02 Annotation The WFDL expresses no concern for the mission or other motivation underlying the sales in question; it asks only whether sales occur. Nor does the statute draw any distinction between for-profit and not-for-profit entities. The stated concern is with fair business relations, and it is beyond dispute that nonprofit corporations can be substantial businesses. It matters not whether the purported dealer would be called a “dealer" in everyday conversation; what matters is only how the statute defines the term. Girl Scouts of Manitou Council, Inc. v. Girl Scouts of the United States of America, Inc. 549 F.3d 1079 (2008).
135.02 AnnotationAffirmed in part, reversed in part. 646 F.3d 983 (2011).
135.02 Annotation In search of a dealership definition: The teachings of Bush and Ziegler. Carter and Kendall. WBB Apr. 1988.
135.02 Annotation The Wisconsin Fair Dealership Law's Territorial Imperative. Keeler. Wis. Law. Aug. 1999.
135.025 135.025 Purposes; rules of construction; variation by contract.
135.025(1)(1)This chapter shall be liberally construed and applied to promote its underlying remedial purposes and policies.
135.025(2) (2)The underlying purposes and policies of this chapter are:
135.025(2)(a) (a) To promote the compelling interest of the public in fair business relations between dealers and grantors, and in the continuation of dealerships on a fair basis;
135.025(2)(b) (b) To protect dealers against unfair treatment by grantors, who inherently have superior economic power and superior bargaining power in the negotiation of dealerships;
135.025(2)(c) (c) To provide dealers with rights and remedies in addition to those existing by contract or common law;
135.025(2)(d) (d) To govern all dealerships, including any renewals or amendments, to the full extent consistent with the constitutions of this state and the United States.
135.025(3) (3)The effect of this chapter may not be varied by contract or agreement. Any contract or agreement purporting to do so is void and unenforceable to that extent only.
135.025 History History: 1977 c. 171.
135.025 Annotation The choice of law clause in a dealership agreement was unenforceable. Bush v. National School Studios, 139 Wis. 2d 635, 407 N.W.2d 883 (1987).
135.025 Annotation Federal law required the enforcement of an arbitration clause even though that clause did not provide the relief guaranteed by this chapter, contrary to this section and s. 135.05. Madison Beauty Supply v. Helene Curtis, 167 Wis. 2d 237, 481 N.W.2d 644 (Ct. App. 1992).
135.025 Annotation A forum-selection clause in a dealership agreement was not freely bargained for and was rendered ineffective under sub. (2) (b). Cutter v. Scott & Fetzer Co. 510 F. Supp. 905 (1981).
135.025 Annotation The relinquishment of territory and the signing of a guaranty agreement were changes insufficient to bring a relationship under this law. Rochester v. Royal Appliance Mfg. Co. 569 F. Supp. 736 (1983).
135.03 135.03 Cancellation and alteration of dealerships. No grantor, directly or through any officer, agent or employee, may terminate, cancel, fail to renew or substantially change the competitive circumstances of a dealership agreement without good cause. The burden of proving good cause is on the grantor.
135.03 History History: 1973 c. 179; 1977 c. 171.
135.03 Annotation A grantor may cancel, terminate, or non-renew a dealership if the dealer refuses to accept changes that are essential, reasonable, and not discriminatory. A dealer's failure to substantially comply with the changes constitutes good cause. Ziegler Co., Inc. v. Rexnord, 147 Wis. 2d 308, 433 N.W.2d 8 (1988).
135.03 Annotation A drug supplier violated this section by terminating without good cause all dealership agreements with independently owned pharmacies in the state. Kealey Pharmacy & Home Care Service, Inc. v. Walgreen Co. 761 F.2d 345 (1985).
135.03 Annotation This chapter did not apply to a grantor's action that was due to business exigencies unrelated to the dealer and was done in a nondiscriminatory manner. Remus v. Amoco Oil Co. 794 F.2d 1238 (1986).
135.03 Annotation Economic duress may serve as a basis for a claim of constructive termination of a dealership. JPM, Inc. v. John Deere, 94 F.3d 270 (1996).
135.03 Annotation A grantor's substantial loss of money under a dealership relationship may constitute “good cause" for changes in the contract, including termination. Morley-Murphy Co. v. Zenith Electronics, Inc. 142 F.3d 373 (1998).
135.03 Annotation A change in credit terms was a change in a dealer's “competitive circumstances." Van v. Mobil Oil Corp. 515 F. Supp. 487 (1981).
135.03 Annotation This section did not apply when a grantor withdrew in a nondiscriminatory fashion from a product market on a large geographic scale. A 90-day notice was required. St. Joseph Equipment v. Massey-Ferguson, Inc. 546 F. Supp. 1245 (1982).
135.03 Annotation Franchisees failed to meet their burden of proof that their competitive circumstances would be substantially changed by a new agreement. Bresler's 33 Flavors Franchising Corp. v. Wokosin, 591 F. Supp. 1533 (1984).
135.03 Annotation Good cause for termination includes failure to achieve reasonable sales goals. L.O. Distributors, Inc., v. Speed Queen Co. 611 F. Supp. 1569 (1985).
135.03 Annotation Federal law preempts this chapter in petroleum franchise cases. Baker v. Amoco Oil Co., 761 F. Supp. 1386 (1991).
135.03 Annotation When parties continue their relations after the term of a dealership contract has expired, the contract has been renewed for another period of the same length. Praefke Auto Electric & Battery Co., Inc. v. Tecumseh Products, Co. 110 F. Supp. 2d 899 (2000). Reversed on other grounds, 255 F.3d 460 (2001).
135.03 Annotation Plaintiffs could proceed under this chapter if they could adduce evidence either that defendant made a change in the competitive circumstances of their dealership agreements that had a discriminatory effect on them or that defendant's actions were intended to eliminate them or all of its dealers from the state. It is critical that plaintiff-dealers show an intent to terminate on the part of the grantor. Although it would not be enough to show that the grantor made bad management decisions; it might be enough if the plaintiff-dealers can show that the bad decisions were a cover for an intent to slough off the dealers and take over the markets they had developed. Conrad's Sentry, Inc. v. Supervalu, Inc. 357 F. Supp. 2d 1086 (2005).
135.03 Annotation Assignment of a second distributor in Wisconsin did not breach the agreement or cause a substantial change in the competitive circumstances of the nonexclusive dealership agreement in violation of s. 135.03. However, the defendant's assignment of a second distributorship was a violation of s. 135.04 because it caused a substantial change in the competitive circumstances of the plaintiff's truck blower distributorship and the defendant failed to provide the plaintiff with 90 days' written notice. Wisconsin Compressed Air Corp. v. Gardner Denver, Inc. 571 F. Supp. 2d 992 (2008).
135.03 Annotation When an action becomes so egregious as to amount to constructive termination of the dealership this section is violated. Constructive termination of a dealership agreement can occur when the grantor takes actions that amount to an effective end to the commercially meaningful aspects of the dealership relationship, regardless of whether the formal contractual relationship between the parties continues in force. Girl Scouts of Manitou Council, Inc. v. Girl Scouts of the United States of America, 700 F. Supp. 2d 1055 (2011). Affirmed in part, reversed in part. 646 F.3d 983 (2011).
135.03 Annotation “Good cause" is not limited to the statutory definition of the term under s. 135.02 (4). A grantor's own circumstances can constitute good cause for reasonable, essential, and nondiscriminatory changes in the way it does business with dealers. To show good cause for making a substantial change in the competitive circumstances of a dealership agreement, the grantor must demonstrate: 1) an objectively ascertainable need for change; 2) a proportionate response to that need; and (3) a nondiscriminatory action." This chapter makes no distinction between for-profit and not-for-profit entities, and, as such, the court cannot judicially craft a lower threshold for when not-for-profit organizations wish to substantially change the competitive circumstances of a dealership agreement. Girl Scouts of Manitou Council, Inc. v. Girl Scouts of the United States of America, 700 F. Supp. 2d 1055 (2011). Affirmed in part, reversed in part. 646 F.3d 983 (2011).
135.03 Annotation This chapter is applicable to nonprofit grantor's. Girl Scouts of Manitou Council, Inc. v. Girl Scouts of the United States of America, 646 F.3d 983 (2011).
135.03 Annotation Constructive Termination Under the Wisconsin Fair Dealership Law. Cross and Janssen. Wis. Law. June 1997.
135.04 135.04 Notice of termination or change in dealership. Except as provided in this section, a grantor shall provide a dealer at least 90 days' prior written notice of termination, cancellation, nonrenewal or substantial change in competitive circumstances. The notice shall state all the reasons for termination, cancellation, nonrenewal or substantial change in competitive circumstances and shall provide that the dealer has 60 days in which to rectify any claimed deficiency. If the deficiency is rectified within 60 days the notice shall be void. The notice provisions of this section shall not apply if the reason for termination, cancellation or nonrenewal is insolvency, the occurrence of an assignment for the benefit of creditors or bankruptcy. If the reason for termination, cancellation, nonrenewal or substantial change in competitive circumstances is nonpayment of sums due under the dealership, the dealer shall be entitled to written notice of such default, and shall have 10 days in which to remedy such default from the date of delivery or posting of such notice.
135.04 History History: 1973 c. 179.
2017-18 Wisconsin Statutes updated through 2019 Wis. Act 186 and through all Supreme Court and Controlled Substances Board Orders filed before and in effect on November 3, 2020. Published and certified under s. 35.18. Changes effective after November 3, 2020, are designated by NOTES. (Published 11-3-20)