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HIGHLIGHTS
7
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Prohibits franchisors from requiring a dealer to operate
dealership facilities that are exclusive to a particular line
make, unless such a restriction is justified by current
and reasonably expected future economic conditions
in the area of the dealership.
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Prohibits franchisors from requiring site control
provisions that would survive or continue after the
termination of a dealership if the termination is due to
the discontinuation of the line-make.
Enhancement of Termination Protections –
463(2)(d)
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Requires manufacturers acquiring a brand to honor an
existing franchise agreement or to offer an agreement
that is similar to the agreement that is offered to other
existing franchisees.
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Imposes a duty on franchisors to continue a franchise.
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Provides that a franchise may not be terminated or
canceled, or a renewal refused, except for “due cause”,
regardless of the terms of the franchise agreement.
•
Defines “due cause” as a material breach by the dealer
of a reasonable and necessary term of the franchise that
has not been cured after notice by the franchisor.
Protest of Franchise Termination – 463(2)(e)
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Provides an automatic stay of any termination that a
dealer protests within four (4) months.
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Requires franchisors to provide at least 90 days notice
of a proposed termination and, if the termination is
based on sales/service performance, to provide at least
180 days for the dealer to “cure” any alleged problems.
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Lists specific issues that must be considered in a dealer’s
challenge to a franchise termination, including “due
cause” and “good faith”.
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Places the burden on a franchisor to prove that a dealer
breached a material duty of the franchise. If a breach
of a dealer’s duty is caused by factors beyond a dealer’s
control then that breach will not be considered due
cause for a termination.
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