highlights
4
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.
Franchise Law
Highlights
