Chapter 135

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 Co. v. Tri-Clover, Inc., 2000 WI 20, 233 Wis. 2d 57, 606 N.W.2d 145, 99-0541. See also Baldewein Co. 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 this chapter 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 Co. v. Tecumseh Products Co., 255 F.3d 460 (2001).

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 Annotation Affirmed in part, reversed in part. 646 F.3d 983 (2011).

135.02 Annotation For an entity to qualify as a dealership through the use of commercial symbols, more is required than the mere right to use a commercial symbol. Instead, a dealership must either put those symbols to such use that the public associates the dealer with the trademark or prominently display the logo as an implicit guarantee of quality. Such use by a dealership ties its fortunes to the reputation of the grantor, giving the grantor superior bargaining power that the grantor might use to exploit the dealer. Sufficiently substantial use of a grantor’s corporate symbol typically requires a purported dealer to make a substantial investment in the trademark. PMT Machinery Sales, Inc. v. Yama Seiki USA, Inc., 941 F.3d 325 (2019).

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. United States 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. v. Tecumseh Products, Co., 110 F. Supp. 2d 899 (2000).

135.02 Annotation Nothing in the text or legislative history of this chapter 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 this chapter. 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). See also PMT Machinery Sales, Inc. v. Yama Seiki USA, Inc., 941 F.3d 325 (2019).

135.02 Annotation In search of a dealership definition: The teachings of Bush and Ziegler. Carter & 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 This chapter is applicable to nonprofit grantors. Girl Scouts of Manitou Council, Inc. v. Girl Scouts of the United States of America, 646 F.3d 983 (2011).

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. v. Tecumseh Products, Co., 110 F. Supp. 2d 899 (2000).

135.03 Annotation 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 this section. 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).

135.03 Annotation 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).

135.03 Annotation Affirmed in part, reversed in part. 646 F.3d 983 (2011).

135.03 Annotation Constructive Termination Under the Wisconsin Fair Dealership Law. Cross & 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.

135.04 Annotation A grantor must give a 90-day notice when termination is for nonpayment of sums due. White Hen Pantry v. Buttke, 100 Wis. 2d 169, 301 N.W.2d 216 (1981).

135.04 Annotation The notice requirement of this section applies to substantial changes of circumstances of a dealership, not a dealership agreement. Actions that substantially change competitive circumstances and that are controlled by the grantor or are allowed by the dealership agreement require the statutory notice. Jungbluth v. Hometown, Inc., 201 Wis. 2d 320, 548 N.W.2d 519 (1996), 94-1523.

135.04 Annotation Steps that the grantor requires the dealer to take in order to rectify a deficiency must be reasonable. Al Bishop Agency, Inc. v. Lithonia, 474 F. Supp. 828 (1979).

135.04 Annotation The notice requirement does not impermissibly burden interstate commerce. Designs in Medicine, Inc. v. Xomed, Inc., 522 F. Supp. 1054 (1981).

135.04 Annotation Remedies for termination should be available only for unequivocal terminations of the entire relationship. Meyer v. Kero-Sun, Inc., 570 F. Supp. 402 (1983).

135.04 Annotation The insolvency exception to the notice requirement did not apply to insolvency that was not known to the grantor at the time of termination. Bruno Wine & Spirits v. Guimarra Vineyards, 573 F. Supp. 337 (1983).

135.04 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 this section 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).

135.045 135.045 Repurchase of inventories. If a dealership is terminated by the grantor, the grantor, at the option of the dealer, shall repurchase all inventories sold by the grantor to the dealer for resale under the dealership agreement at the fair wholesale market value. This section applies only to merchandise with a name, trademark, label or other mark on it which identifies the grantor.

135.045 History History: 1977 c. 171.

135.045 Annotation “Fair wholesale market value” means wholesale price. Roedel-Hanson and Associates, Inc. v. Environamics, Corp., 242 F. Supp. 2d 582 (2003).

135.05 135.05 Application to arbitration agreements. This chapter shall not apply to provisions for the binding arbitration of disputes contained in a dealership agreement concerning the items covered in s. 135.03, if the criteria for determining whether good cause existed for a termination, cancellation, nonrenewal or substantial change of competitive circumstances, and the relief provided is no less than that provided for in this chapter.

135.05 History History: 1973 c. 179.

135.05 Annotation Federal law required enforcement of an arbitration clause even though that clause did not provide the relief guaranteed by this chapter, contrary to this section and s. 135.025. Madison Beauty Supply v. Helene Curtis, 167 Wis. 2d 237, 481 N.W.2d 644 (Ct. App. 1992).

135.06 135.06 Action for damages and injunctive relief. If any grantor violates this chapter, a dealer may bring an action against such grantor in any court of competent jurisdiction for damages sustained by the dealer as a consequence of the grantor’s violation, together with the actual costs of the action, including reasonable actual attorney fees, and the dealer also may be granted injunctive relief against unlawful termination, cancellation, nonrenewal or substantial change of competitive circumstances.

135.06 History History: 1973 c. 179; 1993 a. 482.

135.06 Annotation In an action for termination of a dealership upon written notice not complying with this chapter and without good cause, the statute of limitations started running upon receipt of the termination notice. Les Moise, Inc. v. Rossignol Ski Co., Inc., 122 Wis. 2d 51, 361 N.W.2d 653 (1985).

135.06 Annotation The term “actual costs of the action” includes appellate attorney fees. Siegel v. Leer, Inc., 156 Wis. 2d 621, 457 N.W.2d 533 (Ct. App. 1990).

135.06 Annotation The measure of damages is discussed. C.A. May Marine Supply Co. v. Brunswick Corp., 649 F.2d 1049 (1981).

135.06 Annotation A cause of action accrued when a defective notice under s. 135.04 was given, not when the dealership was actually terminated. Hammil v. Rickel Mfg. Corp., 719 F.2d 252 (1983).

135.06 Annotation This section does not restrict recovery of damages with respect to inventory on hand at the time of termination to “fair wholesale market value.” Kealey Pharmacy v. Walgreen Co., 761 F.2d 345 (1985).

135.06 Annotation Accountant fees were properly included under this section. Bright v. Land O’ Lakes, Inc., 844 F.2d 436 (1988).

135.06 Annotation There is no presumption in favor of injunctive relief and against damages for lost future profits. Frieburg Farm Equip. v. Van Dale, Inc., 978 F.2d 395 (1992).

135.06 Annotation An arbitration award that did not award attorney fees was enforceable. Parties may agree to bear their own legal expenses when resolving differences; what the parties may do, an arbitrator as their mutual agent may also do. George Watts & Son, Inc. v. Tiffany & Co., 248 F.3d 577 (2001).

135.06 Annotation The determination of damages and attorney fees is discussed. Esch v. Yazoo Manufacturing Co., 510 F. Supp. 53 (1981).