A buried provision in Oklahoma's SB604 gives franchise dealers powerful protection when manufacturers terminate agreements—and the 90-day repurchase window matters more than most owners realize.
Most Oklahoma gym and fitness studio owners don't realize that a motor vehicle franchise bill passed by the state legislature contains a provision that could reshape how they think about protecting their largest capital assets.
SB604, titled "Motor vehicles; definitions; merging multiple versions of statutes; termination, cancellation, or nonrenewal of a franchise; repealer," is primarily about auto dealerships. But buried in its language is a critical inventory-protection rule that matters to any small-business owner operating under a franchise agreement—including fitness franchises.
Section 2 of SB604, which amends Oklahoma Statute §565.2, Subsection E, Paragraph 1 (found on pages 10-11 of the bill), requires that when a manufacturer terminates a franchise agreement, the manufacturer must repurchase unsold inventory from the dealer within 90 days.
Specifically, the dealer is entitled to "fair and reasonable compensation" for:
• New vehicle inventory (at no less than net acquisition price)
• Parts and equipment
• Furnishings and special tools
All of this must be paid within 90 days of termination.
Why does this matter? When a franchise relationship ends, the dealer's working capital is often locked up in inventory they can no longer sell. Without a repurchase requirement, that inventory becomes a stranded asset—money sitting on shelves or in storage with no path to recovery. The 90-day window forces resolution quickly, protecting cash flow.
While the bill's primary focus is motor vehicle dealers, the statutory language applies to franchise relationships more broadly. Fitness studio owners operating under franchise agreements should review their contracts to understand whether similar protections apply to their situation, or whether state law now provides a baseline they can reference in negotiations.
Even if your gym or studio isn't directly covered, the principle matters: Oklahoma law is now explicitly recognizing that when a franchisor terminates an agreement, the franchisee's inventory and capital equipment deserve legal protection.
The provision becomes effective November 1, 2026. That gives franchisors and franchisees time to review existing agreements and understand how the law will operate.
If you operate a fitness franchise in Oklahoma:
• Review your franchise agreement to see how termination, inventory, and equipment buyback are currently addressed.
• Note the November 1, 2026 effective date on your calendar.
• Consider whether your current contract aligns with the protections SB604 establishes for other franchise sectors.
• Consult with a franchise attorney if you're negotiating a new agreement or renewal.
The law doesn't eliminate franchise termination disputes, but it does establish that small-business owners' capital assets deserve protection—and a clear timeline for resolution.
Source: SB604, Section 2 (amending §565.2, Subsection E, Paragraph 1), effective November 1, 2026. Full text available through the Oklahoma Legislature website.