New York State Franchise Law for New Car Dealers

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HIGHLIGHTS
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• Establishes a right of dealers to protest a chargeback
attempt. A protest automatically stays (halts) the
chargeback until a final determination.
• Requires franchisors’ chargebacks to be reasonable.
• Prohibits a franchisor from denying or charging-back
a warranty claim unless it proves (a) that the dealer
did not make a good faith effort to comply with the
reasonable written procedures or (b) that the dealer did
not perform the work.
• Prohibits a franchisor from denying or charging-
back a sales, marketing or advertising incentive
payment made to a dealer unless (a) the claim was
false or materially fraudulent or (b) the dealer failed to
reasonable substantiate the claim in accordance with
the franchisor’s reasonable procedure.
• Prohibits a franchisor from imposing any chargeback,
debiting a dealer’s account or otherwise seeking to
obtain any part of a chargeback during the thirty (30)
day period in which the dealer has the opportunity to
file a protest.
Private Actions – 469
• Conforms the Franchised Motor Vehicle Dealer Act to
federal law.
• Prohibits franchisors from requiring dealers to use
binding arbitration to resolve disputes.
page 49
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