NYS Franchise Law 2013

highlights

Franchise Law Highlights

Facility Construction/Renovation Section 463(2)(c)

page 12-13 • The franchisor may not condition the renewal or extension of a franchise agreement on the dealer constructing a new facility or renovating an existing facility, unless the franchisor provides at least 180 days notice and can demonstrate that the updated facility is needed and reasonable in light of economic conditions in the automotive industry. • A franchisor that requests a new facility shall also agree, in writing, to supply the dealer with additional vehicles needed to support the increased overhead as a result of such construction or renovation. Franchise Termination – Section 463(2)(d)-(e) page 14-16 • A franchisor may not terminate, cancel or refuse to renew a franchise except for “due cause”, regardless of the terms of the franchise agreement. • Due cause is defined to mean a material breach by the dealer of a reasonable and necessary term of the franchise, if it has not been cured after notice by the franchisor. • The franchisor must provide at least 90 days notice of the proposed termination, and if the termination is based on sales/service performance the franchisor must provide at least 180 days for the dealer to “cure” any alleged issues. • A dealer may file a protest of the proposed termination within four months of receipt of the notice, and filing the protest will stay (or halt) any further action until a final determination is made as to whether the franchisor possesses “due cause”. • The franchisor has the burden of proof to establish “due cause” exists.

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