|
||||||||||||||||||||
|
||||||||||||||||||||
| ||||||||||||||||||||
| ||||||||||||||||||||
| ||||||||||||||||||||
1 | AN ACT concerning business.
| |||||||||||||||||||
2 | Be it enacted by the People of the State of Illinois,
| |||||||||||||||||||
3 | represented in the General Assembly:
| |||||||||||||||||||
4 | Section 5. The Motor Vehicle Franchise Act is amended by | |||||||||||||||||||
5 | changing Section 4 as follows:
| |||||||||||||||||||
6 | (815 ILCS 710/4) (from Ch. 121 1/2, par. 754)
| |||||||||||||||||||
7 | Sec. 4. Unfair competition and practices.
| |||||||||||||||||||
8 | (a) The unfair methods of competition and unfair and | |||||||||||||||||||
9 | deceptive acts or
practices listed in this Section are hereby | |||||||||||||||||||
10 | declared to be unlawful. In
construing the provisions of this | |||||||||||||||||||
11 | Section, the courts may be guided by the
interpretations of the | |||||||||||||||||||
12 | Federal Trade Commission Act (15 U.S.C. 45 et
seq.), as from | |||||||||||||||||||
13 | time to time amended.
| |||||||||||||||||||
14 | (b) It shall be deemed a violation for any manufacturer, | |||||||||||||||||||
15 | factory branch,
factory representative, distributor or | |||||||||||||||||||
16 | wholesaler, distributor branch,
distributor representative or | |||||||||||||||||||
17 | motor vehicle dealer to engage in any action
with respect to a | |||||||||||||||||||
18 | franchise which is arbitrary, in bad faith or
unconscionable | |||||||||||||||||||
19 | and which causes damage to any of the parties or to the public.
| |||||||||||||||||||
20 | (c) It shall be deemed a violation for a manufacturer, a | |||||||||||||||||||
21 | distributor,
a wholesaler, a distributor branch or division, a | |||||||||||||||||||
22 | factory branch or division,
or a wholesale branch or division, | |||||||||||||||||||
23 | or officer, agent or other representative
thereof, to coerce, | |||||||||||||||||||
24 | or attempt to coerce, any motor vehicle dealer:
| |||||||||||||||||||
25 | (1) to accept, buy or order any motor vehicle or | |||||||||||||||||||
26 | vehicles, appliances,
equipment, parts or accessories | |||||||||||||||||||
27 | therefor, or any other commodity or commodities
or service | |||||||||||||||||||
28 | or services which such motor vehicle dealer has not | |||||||||||||||||||
29 | voluntarily
ordered or requested except items required by | |||||||||||||||||||
30 | applicable local, state or
federal law; or to require a | |||||||||||||||||||
31 | motor vehicle dealer to accept, buy, order or
purchase such | |||||||||||||||||||
32 | items in order to obtain any motor vehicle or vehicles or |
| |||||||
| |||||||
1 | any
other commodity or commodities which have been ordered | ||||||
2 | or requested by such
motor vehicle dealer;
| ||||||
3 | (2) to order or accept delivery of any motor vehicle | ||||||
4 | with special
features, appliances, accessories or | ||||||
5 | equipment not included in the list
price of the motor | ||||||
6 | vehicles as publicly advertised by the manufacturer
| ||||||
7 | thereof, except items required by applicable law; or
| ||||||
8 | (3) to order for anyone any parts, accessories, | ||||||
9 | equipment, machinery,
tools, appliances or any commodity | ||||||
10 | whatsoever, except items required by
applicable law.
| ||||||
11 | (d) It shall be deemed a violation for a manufacturer, a | ||||||
12 | distributor,
a wholesaler, a distributor branch or division, or | ||||||
13 | officer, agent or other
representative thereof:
| ||||||
14 | (1) to adopt, change, establish or implement a plan or | ||||||
15 | system for the
allocation and distribution of new motor | ||||||
16 | vehicles to motor vehicle dealers
which is arbitrary or | ||||||
17 | capricious or to modify an existing plan so as to cause
the | ||||||
18 | same to be arbitrary or capricious;
| ||||||
19 | (2) to fail or refuse to advise or disclose to any | ||||||
20 | motor vehicle dealer
having a franchise or selling | ||||||
21 | agreement, upon written request therefor,
the basis upon | ||||||
22 | which new motor vehicles of the same line make are | ||||||
23 | allocated
or distributed to motor vehicle dealers in the | ||||||
24 | State and the basis upon
which the current allocation or | ||||||
25 | distribution is being made or will be made
to such motor | ||||||
26 | vehicle dealer;
| ||||||
27 | (3) to refuse to deliver in reasonable quantities and | ||||||
28 | within a reasonable
time after receipt of dealer's order, | ||||||
29 | to any motor vehicle dealer having
a franchise or selling | ||||||
30 | agreement for the retail sale of new motor vehicles
sold or | ||||||
31 | distributed by such manufacturer, distributor, wholesaler, | ||||||
32 | distributor
branch or division, factory branch or division | ||||||
33 | or wholesale branch or division,
any such motor vehicles as | ||||||
34 | are covered by such franchise or selling agreement
| ||||||
35 | specifically publicly advertised in the State by such | ||||||
36 | manufacturer,
distributor, wholesaler, distributor branch |
| |||||||
| |||||||
1 | or division, factory branch or
division, or wholesale | ||||||
2 | branch or division to be available for immediate
delivery. | ||||||
3 | However, the failure to deliver any motor vehicle shall not | ||||||
4 | be
considered a violation of this Act if such failure is | ||||||
5 | due to an act of God,
a work stoppage or delay due to a | ||||||
6 | strike or labor difficulty, a shortage
of materials, a lack | ||||||
7 | of manufacturing capacity, a freight embargo or other
cause | ||||||
8 | over which the manufacturer, distributor, or wholesaler, | ||||||
9 | or any agent
thereof has no control;
| ||||||
10 | (4) to coerce, or attempt to coerce, any motor vehicle | ||||||
11 | dealer to enter
into any agreement with such manufacturer, | ||||||
12 | distributor, wholesaler, distributor
branch or division, | ||||||
13 | factory branch or division, or wholesale branch or
| ||||||
14 | division, or officer, agent or other representative | ||||||
15 | thereof, or to do any
other act prejudicial to the dealer | ||||||
16 | by threatening to reduce his allocation
of motor vehicles | ||||||
17 | or cancel any franchise or any selling agreement existing
| ||||||
18 | between such manufacturer, distributor, wholesaler, | ||||||
19 | distributor branch or
division, or factory branch or | ||||||
20 | division, or wholesale branch or division,
and the dealer. | ||||||
21 | However, notice in good faith to any motor vehicle dealer
| ||||||
22 | of the dealer's violation of any terms or provisions of | ||||||
23 | such franchise or
selling agreement or of any law or | ||||||
24 | regulation applicable to the conduct of
a motor vehicle | ||||||
25 | dealer shall not constitute a violation of this Act;
| ||||||
26 | (5) to require a franchisee to participate in an | ||||||
27 | advertising campaign
or contest or any promotional | ||||||
28 | campaign, or to purchase or lease any promotional
| ||||||
29 | materials, training materials, show room or other display | ||||||
30 | decorations or
materials at the expense of the franchisee;
| ||||||
31 | (6) to cancel or terminate the franchise or selling | ||||||
32 | agreement of a
motor vehicle dealer without good cause and | ||||||
33 | without giving notice as
hereinafter provided; to fail or | ||||||
34 | refuse to extend the franchise or selling
agreement of a | ||||||
35 | motor vehicle dealer upon its expiration without good cause
| ||||||
36 | and without giving notice as hereinafter provided; or, to |
| |||||||
| |||||||
1 | offer a renewal,
replacement or succeeding franchise or | ||||||
2 | selling agreement containing terms
and provisions the | ||||||
3 | effect of which is to substantially change or modify the
| ||||||
4 | sales and service obligations or capital requirements of | ||||||
5 | the motor vehicle
dealer arbitrarily and without good cause | ||||||
6 | and without giving notice as
hereinafter provided | ||||||
7 | notwithstanding any term or provision of a franchise
or | ||||||
8 | selling agreement.
| ||||||
9 | (A) If a manufacturer, distributor, wholesaler, | ||||||
10 | distributor branch or
division, factory branch or | ||||||
11 | division or wholesale branch or division intends
to | ||||||
12 | cancel or terminate a franchise or selling agreement or | ||||||
13 | intends not to
extend or renew a franchise or selling | ||||||
14 | agreement on its expiration, it shall
send a letter by | ||||||
15 | certified mail, return
receipt requested, to the | ||||||
16 | affected
franchisee at least
60 days before the | ||||||
17 | effective date of the
proposed action, or not later | ||||||
18 | than 10 days before the proposed action when the
reason | ||||||
19 | for the action is based upon either of the following:
| ||||||
20 | (i) the
business operations of the franchisee | ||||||
21 | have been abandoned or
the franchisee has failed to | ||||||
22 | conduct customary sales and service operations
| ||||||
23 | during customary business hours for at least 7
| ||||||
24 | consecutive business
days unless such closing is | ||||||
25 | due to an act of God, strike or labor
difficulty or | ||||||
26 | other cause over which the franchisee has no | ||||||
27 | control; or
| ||||||
28 | (ii) the conviction of or plea of nolo
| ||||||
29 | contendere by the motor
vehicle dealer or any | ||||||
30 | operator thereof in a court of competent | ||||||
31 | jurisdiction
to an offense punishable by | ||||||
32 | imprisonment for more than two years.
| ||||||
33 | Each notice of proposed action shall include a | ||||||
34 | detailed statement
setting forth the specific grounds | ||||||
35 | for the proposed cancellation, termination,
or refusal | ||||||
36 | to extend or renew and shall state that the dealer has
|
| |||||||
| |||||||
1 | only 30 days from receipt of
the notice to file with | ||||||
2 | the Motor Vehicle Review Board a written protest
| ||||||
3 | against the proposed action.
| ||||||
4 | (B) If a manufacturer, distributor, wholesaler, | ||||||
5 | distributor branch or
division, factory branch or | ||||||
6 | division or wholesale branch or division intends
to | ||||||
7 | change substantially or modify the sales and service | ||||||
8 | obligations or
capital requirements of a motor vehicle | ||||||
9 | dealer as a condition to extending
or renewing the | ||||||
10 | existing franchise or selling agreement of such motor
| ||||||
11 | vehicle dealer, it shall
send a letter by certified | ||||||
12 | mail, return receipt requested, to the affected
| ||||||
13 | franchisee at
least 60
days
before the date of | ||||||
14 | expiration of the franchise or selling agreement. Each
| ||||||
15 | notice of proposed action shall include a detailed | ||||||
16 | statement setting forth
the specific grounds for the | ||||||
17 | proposed action
and shall state that the dealer has | ||||||
18 | only 30 days from receipt of
the notice to file with | ||||||
19 | the Motor Vehicle Review Board a written protest
| ||||||
20 | against the proposed action.
| ||||||
21 | (C) Within 30 days from receipt of the notice under
| ||||||
22 | subparagraphs (A) and (B),
the franchisee may file with | ||||||
23 | the Board a written
protest against the proposed | ||||||
24 | action.
| ||||||
25 | When the protest has been timely filed, the Board | ||||||
26 | shall enter an
order,
fixing a date (within 60 days of | ||||||
27 | the date of the order), time,
and place of a hearing on | ||||||
28 | the protest required under Sections 12 and 29
of this | ||||||
29 | Act, and send by certified mail, return receipt | ||||||
30 | requested, a copy of
the order to the manufacturer that | ||||||
31 | filed the notice of intention of the
proposed action | ||||||
32 | and to the protesting dealer or franchisee.
| ||||||
33 | The manufacturer shall have the burden of proof to | ||||||
34 | establish that good
cause exists to cancel or | ||||||
35 | terminate, or fail to extend or renew the franchise
or
| ||||||
36 | selling agreement of a motor vehicle dealer or |
| |||||||
| |||||||
1 | franchisee, and to change
substantially or modify the | ||||||
2 | sales and service obligations or capital
requirements | ||||||
3 | of a motor vehicle dealer as a condition to extending | ||||||
4 | or renewing
the existing franchise or selling | ||||||
5 | agreement. The determination whether good
cause exists | ||||||
6 | to cancel, terminate, or refuse to renew or extend the | ||||||
7 | franchise
or selling agreement, or to change or modify | ||||||
8 | the obligations of the dealer as a
condition to offer | ||||||
9 | renewal, replacement, or succession shall be made
by | ||||||
10 | the Board under subsection (d) of Section 12 of this | ||||||
11 | Act.
| ||||||
12 | (D) Notwithstanding the terms, conditions, or | ||||||
13 | provisions of a
franchise
or selling agreement, the | ||||||
14 | following shall not constitute good cause for
| ||||||
15 | cancelling or terminating or failing to extend or renew | ||||||
16 | the franchise or
selling agreement: (i) the change of | ||||||
17 | ownership or executive management of the
franchisee's | ||||||
18 | dealership; or (ii)
the
fact that the franchisee or | ||||||
19 | owner of an interest in the franchise owns, has
an | ||||||
20 | investment in, participates in the management of, or | ||||||
21 | holds a license for
the sale of the same or any other | ||||||
22 | line make of new motor vehicles.
| ||||||
23 | Good cause shall exist to cancel, terminate or fail | ||||||
24 | to offer a
renewal or replacement franchise or selling | ||||||
25 | agreement to all franchisees of
a line make if the | ||||||
26 | manufacturer permanently discontinues the manufacture | ||||||
27 | or
assembly of motor vehicles of such line make.
| ||||||
28 | (E) The manufacturer may not cancel or terminate, | ||||||
29 | or fail to extend or
renew a franchise or selling | ||||||
30 | agreement or change or modify the obligations of
the | ||||||
31 | franchisee as a condition to offering a renewal, | ||||||
32 | replacement, or succeeding
franchise or selling | ||||||
33 | agreement before the hearing process is concluded as
| ||||||
34 | prescribed by this Act, and thereafter, if the Board | ||||||
35 | determines that the
manufacturer has failed to meet its | ||||||
36 | burden of proof and that good cause does
not exist to |
| |||||||
| |||||||
1 | allow the proposed action; or
| ||||||
2 | (7) notwithstanding the terms of any franchise | ||||||
3 | agreement, to fail to
indemnify and hold harmless its | ||||||
4 | franchised dealers against any judgment
or settlement for | ||||||
5 | damages, including, but not limited to, court costs, expert
| ||||||
6 | witness fees, reasonable attorneys' fees of the new motor | ||||||
7 | vehicle
dealer, and other expenses incurred in the | ||||||
8 | litigation, so long as such fees
and costs are reasonable,
| ||||||
9 | arising out
of complaints, claims or lawsuits including, | ||||||
10 | but not limited to, strict
liability, negligence, | ||||||
11 | misrepresentation, warranty (express or implied),
or | ||||||
12 | recision of the sale as defined in Section 2-608 of the | ||||||
13 | Uniform Commercial
Code, to the extent that the judgment or | ||||||
14 | settlement relates to the alleged
defective or negligent | ||||||
15 | manufacture, assembly or design of new motor vehicles,
| ||||||
16 | parts or accessories or other functions by the | ||||||
17 | manufacturer, beyond the
control of the dealer; provided | ||||||
18 | that, in order to provide an adequate
defense, the | ||||||
19 | manufacturer receives notice of the filing of a complaint, | ||||||
20 | claim,
or lawsuit within 60 days after the filing.
| ||||||
21 | (e) It shall be deemed a violation for a manufacturer, a | ||||||
22 | distributor,
a wholesaler, a distributor branch or division or | ||||||
23 | officer, agent or other
representative thereof:
| ||||||
24 | (1) to resort to or use any false or misleading | ||||||
25 | advertisement in
connection with his business as such | ||||||
26 | manufacturer, distributor, wholesaler,
distributor branch | ||||||
27 | or division or officer, agent or other representative
| ||||||
28 | thereof;
| ||||||
29 | (2) to offer to sell or lease, or to sell or lease, any | ||||||
30 | new motor vehicle
to any motor vehicle dealer at a lower | ||||||
31 | actual price therefor than the actual
price offered to any | ||||||
32 | other motor vehicle dealer for the same model vehicle
| ||||||
33 | similarly equipped or to utilize any device including, but | ||||||
34 | not limited to,
sales promotion plans or programs which | ||||||
35 | result in such lesser actual
price or fail to make | ||||||
36 | available to any motor vehicle dealer any
preferential |
| |||||||
| |||||||
1 | pricing, incentive, rebate, finance rate, or low interest | ||||||
2 | loan
program offered to competing motor vehicle dealers in | ||||||
3 | other contiguous states.
However, the provisions of this | ||||||
4 | paragraph shall not apply to sales
to a motor vehicle | ||||||
5 | dealer for resale to any unit of the United States
| ||||||
6 | Government, the State or any of its political subdivisions;
| ||||||
7 | (3) to offer to sell or lease, or to sell or lease, any | ||||||
8 | new motor vehicle
to any person, except a wholesaler, | ||||||
9 | distributor or manufacturer's employees
at a lower actual | ||||||
10 | price therefor than the actual price offered and charged
to | ||||||
11 | a motor vehicle dealer for the same model vehicle similarly | ||||||
12 | equipped or
to utilize any device which results in such | ||||||
13 | lesser actual price. However,
the provisions of this | ||||||
14 | paragraph shall not apply to sales to a motor
vehicle | ||||||
15 | dealer for resale to any unit of the United States | ||||||
16 | Government, the
State or any of its political subdivisions;
| ||||||
17 | (4) to prevent or attempt to prevent by contract or | ||||||
18 | otherwise any motor
vehicle dealer or franchisee from | ||||||
19 | changing the executive management control
of the motor
| ||||||
20 | vehicle dealer or franchisee unless the franchiser, having | ||||||
21 | the burden of
proof, proves that such change of executive | ||||||
22 | management will result in executive
management control by a | ||||||
23 | person or persons who are not of good moral character
or | ||||||
24 | who do not meet the franchiser's existing and, with | ||||||
25 | consideration given
to the volume of sales and service of | ||||||
26 | the dealership, uniformly applied
minimum business | ||||||
27 | experience standards in the market area. However where
the | ||||||
28 | manufacturer rejects a proposed change in executive | ||||||
29 | management
control, the manufacturer shall give written | ||||||
30 | notice of his reasons to the
dealer within 60 days of | ||||||
31 | notice to the manufacturer by the dealer of
the proposed | ||||||
32 | change. If the manufacturer does not send a letter to the
| ||||||
33 | franchisee by certified mail, return receipt requested, | ||||||
34 | within 60 days from
receipt by
the manufacturer of the | ||||||
35 | proposed change, then the change of the
executive | ||||||
36 | management control of the franchisee shall be deemed
|
| |||||||
| |||||||
1 | accepted as proposed by the franchisee, and the | ||||||
2 | manufacturer shall give
immediate
effect to such change;
| ||||||
3 | (5) to prevent or attempt to prevent by contract or | ||||||
4 | otherwise any motor
vehicle dealer from establishing or | ||||||
5 | changing the capital structure of his
dealership or the | ||||||
6 | means by or through which he finances the operation | ||||||
7 | thereof;
provided the dealer meets any reasonable capital | ||||||
8 | standards agreed to between
the dealer and the | ||||||
9 | manufacturer, distributor or wholesaler, who may require
| ||||||
10 | that the sources, method and manner by which the dealer | ||||||
11 | finances or intends
to finance its operation, equipment or | ||||||
12 | facilities be fully disclosed;
| ||||||
13 | (6) to refuse to give effect to or prevent or attempt | ||||||
14 | to prevent by
contract or otherwise any motor vehicle | ||||||
15 | dealer or any officer, partner or
stockholder of any motor | ||||||
16 | vehicle dealer from selling or transferring any
part of the | ||||||
17 | interest of any of them to any other person or persons or | ||||||
18 | party
or parties unless such sale or transfer is to a | ||||||
19 | transferee who would
not otherwise qualify for a new motor | ||||||
20 | vehicle dealers license under "The
Illinois Vehicle Code" | ||||||
21 | or unless the franchiser, having the burden of proof,
| ||||||
22 | proves that such sale or transfer is to a person or party | ||||||
23 | who is not of
good moral character or does not meet the | ||||||
24 | franchiser's existing and reasonable
capital standards | ||||||
25 | and, with consideration given to the volume of sales and
| ||||||
26 | service of the dealership, uniformly applied minimum | ||||||
27 | business experience
standards in the market area.
However, | ||||||
28 | nothing herein shall be construed to prevent a
franchiser | ||||||
29 | from implementing affirmative action programs providing | ||||||
30 | business
opportunities for minorities or from complying | ||||||
31 | with applicable federal,
State or local law:
| ||||||
32 | (A) If the manufacturer intends to refuse to | ||||||
33 | approve the sale or
transfer of all or a part of the | ||||||
34 | interest, then it shall, within 60 days from
receipt of | ||||||
35 | the completed application forms generally utilized by | ||||||
36 | a manufacturer
to conduct its review and a copy of all |
| |||||||
| |||||||
1 | agreements regarding the proposed
transfer, send a | ||||||
2 | letter by certified mail, return receipt requested, | ||||||
3 | advising
the franchisee of any refusal to approve the | ||||||
4 | sale or transfer of all or part of
the interest
and | ||||||
5 | shall state that the dealer only has 30 days from the | ||||||
6 | receipt of the
notice to file with the Motor Vehicle | ||||||
7 | Review Board a written protest against
the proposed | ||||||
8 | action.
The
notice shall set forth specific criteria | ||||||
9 | used to evaluate the prospective
transferee and the | ||||||
10 | grounds for refusing to approve the sale or transfer to
| ||||||
11 | that transferee. Within 30 days from the franchisee's | ||||||
12 | receipt of the
manufacturer's notice, the
franchisee | ||||||
13 | may file
with the Board a written protest against the | ||||||
14 | proposed action.
| ||||||
15 | When a protest has been timely filed, the Board | ||||||
16 | shall enter an
order, fixing the date (within 60 days | ||||||
17 | of the date of such
order), time, and place of a | ||||||
18 | hearing on the protest, required under
Sections 12 and | ||||||
19 | 29 of this Act, and send by certified mail, return | ||||||
20 | receipt
requested, a copy of the order to the | ||||||
21 | manufacturer that filed notice of
intention of the | ||||||
22 | proposed action and to the protesting franchisee.
| ||||||
23 | The manufacturer shall have the burden of proof to | ||||||
24 | establish that good
cause exists to refuse to approve | ||||||
25 | the sale or transfer to the transferee. The
| ||||||
26 | determination whether good cause exists to refuse to | ||||||
27 | approve the sale or
transfer shall be made by the Board | ||||||
28 | under subdivisions (6)(B).
The manufacturer shall not | ||||||
29 | refuse to approve the sale or transfer
by
a dealer or | ||||||
30 | an officer, partner, or stockholder of a franchise or | ||||||
31 | any part
of the interest to any person or persons | ||||||
32 | before the hearing process is
concluded as prescribed | ||||||
33 | by this Act, and thereafter if the Board determines
| ||||||
34 | that the manufacturer has failed to meet its burden of | ||||||
35 | proof and that good
cause does not exist to refuse to | ||||||
36 | approve the sale or transfer to the
transferee.
|
| |||||||
| |||||||
1 | (B) Good cause to refuse to approve such sale or | ||||||
2 | transfer under this
Section is established when such | ||||||
3 | sale or transfer is to a transferee who would
not | ||||||
4 | otherwise qualify for a new motor vehicle dealers | ||||||
5 | license under "The
Illinois Vehicle Code" or such sale | ||||||
6 | or transfer is to a person or party who is
not of good | ||||||
7 | moral character or does not meet the franchiser's | ||||||
8 | existing and
reasonable capital standards and, with | ||||||
9 | consideration given to the volume of
sales and service | ||||||
10 | of the dealership, uniformly applied minimum business
| ||||||
11 | experience standards in the market area.
| ||||||
12 | (7) to obtain money, goods, services, anything of | ||||||
13 | value, or any other
benefit from any other person with whom | ||||||
14 | the motor vehicle dealer does business,
on account of or in | ||||||
15 | relation to the transactions between the dealer and
the | ||||||
16 | other person as compensation, except for services actually | ||||||
17 | rendered,
unless such benefit is promptly accounted for and | ||||||
18 | transmitted to the motor
vehicle dealer;
| ||||||
19 | (8) to grant an additional franchise in the relevant | ||||||
20 | market area of an
existing franchise of the same line make | ||||||
21 | or to relocate an existing motor
vehicle dealership within | ||||||
22 | or into a relevant market area of an existing
franchise of | ||||||
23 | the same line make.
However, if the manufacturer wishes to
| ||||||
24 | grant such an additional franchise to an independent person | ||||||
25 | in a bona fide
relationship in which such person is | ||||||
26 | prepared to make a significant
investment subject to loss | ||||||
27 | in such a dealership, or if the manufacturer
wishes to | ||||||
28 | relocate an existing motor vehicle dealership, then the
| ||||||
29 | manufacturer shall send a letter
by certified mail, return | ||||||
30 | receipt requested, to each existing dealer or dealers
of | ||||||
31 | the same line make whose relevant
market area includes the | ||||||
32 | proposed location of the additional or relocated
franchise | ||||||
33 | at least
60 days before the manufacturer grants an | ||||||
34 | additional franchise or relocates an
existing franchise of | ||||||
35 | the same line make within or into the relevant market
area | ||||||
36 | of an existing
franchisee of the same line make. Each |
| |||||||
| |||||||
1 | notice shall set forth the specific
grounds for the | ||||||
2 | proposed grant of an additional or relocation of an | ||||||
3 | existing
franchise. Unless the parties agree upon the grant | ||||||
4 | or establishment of the
additional or relocated franchise | ||||||
5 | within 30 days from the date the
notice was
received by the | ||||||
6 | existing franchisee of the same line make or any person
| ||||||
7 | entitled to receive such notice, the franchisee or other | ||||||
8 | person may file
with the Board a written protest against | ||||||
9 | the grant or establishment of the
proposed additional or | ||||||
10 | relocated franchise
and shall state that the dealer only | ||||||
11 | has 30 days from the receipt of the
notice to file with
the | ||||||
12 | Motor Vehicle Review Board a written protest against the | ||||||
13 | proposed action.
| ||||||
14 | When a protest has been timely filed, the Board shall | ||||||
15 | enter an order
fixing a date (within 60 days of the date of | ||||||
16 | the order), time,
and place of a hearing on the protest, | ||||||
17 | required under Sections 12 and 29
of this Act, and send by | ||||||
18 | certified or registered mail, return receipt
requested, a | ||||||
19 | copy of the order to the manufacturer that filed the notice | ||||||
20 | of
intention to grant or establish the proposed additional | ||||||
21 | or relocated
franchise and to the protesting dealer or | ||||||
22 | dealers of the same line make
whose
relevant market area | ||||||
23 | includes the proposed location of the additional or
| ||||||
24 | relocated franchise.
| ||||||
25 | When more than one protest is filed against the grant | ||||||
26 | or establishment of
the
additional or relocated franchise | ||||||
27 | of the same line make, the Board may
consolidate the | ||||||
28 | hearings to expedite disposition of the matter. The
| ||||||
29 | manufacturer shall have the burden of proof to establish | ||||||
30 | that good cause
exists to allow the grant or establishment | ||||||
31 | of the additional or relocated
franchise. The manufacturer | ||||||
32 | may not grant or establish the additional
franchise or | ||||||
33 | relocate the existing franchise before the hearing process | ||||||
34 | is
concluded as prescribed by this Act, and thereafter if | ||||||
35 | the Board determines
that the manufacturer has failed to | ||||||
36 | meet its burden of proof and that good
cause does not exist |
| |||||||
| |||||||
1 | to allow the grant or establishment of the additional
| ||||||
2 | franchise or relocation of the existing franchise.
| ||||||
3 | The determination whether good cause exists for | ||||||
4 | allowing the grant or
establishment of an additional | ||||||
5 | franchise or relocated existing franchise,
shall be made by | ||||||
6 | the Board under subsection (c) of Section 12 of this Act.
| ||||||
7 | If the manufacturer seeks to enter
into a contract, | ||||||
8 | agreement or other arrangement with any person,
| ||||||
9 | establishing any additional motor vehicle dealership or | ||||||
10 | other facility,
limited to the sale of factory repurchase | ||||||
11 | vehicles or late model vehicles,
then the manufacturer | ||||||
12 | shall follow the notice procedures set forth in this
| ||||||
13 | Section and the
determination whether good cause exists for | ||||||
14 | allowing the proposed agreement
shall be made by the Board | ||||||
15 | under subsection (c) of Section 12, with the
manufacturer | ||||||
16 | having
the burden of proof.
| ||||||
17 | A. (Blank).
| ||||||
18 | B. For the purposes of this Section, appointment of | ||||||
19 | a successor motor
vehicle dealer at the same location | ||||||
20 | as its predecessor, or within
2 miles
of such location,
| ||||||
21 | or the relocation of an existing dealer or franchise | ||||||
22 | within
2 miles of
the relocating dealer's or | ||||||
23 | franchisee's existing location,
shall not be construed | ||||||
24 | as a grant, establishment or the
entering into of an | ||||||
25 | additional franchise or selling agreement, or a
| ||||||
26 | relocation of an existing franchise. The reopening
of a | ||||||
27 | motor vehicle dealership that has not been in operation | ||||||
28 | for 18 months
or more shall be deemed the grant of an | ||||||
29 | additional franchise or selling
agreement.
| ||||||
30 | C. This Section does not apply to the relocation of | ||||||
31 | an existing
dealership or franchise in a county having | ||||||
32 | a population of more than
300,000 persons when the new | ||||||
33 | location is within the dealer's current
relevant | ||||||
34 | market area, provided the new location is more than 7 | ||||||
35 | miles from
the nearest dealer of the same line make. | ||||||
36 | This Section does not apply to
the relocation of an |
| |||||||
| |||||||
1 | existing dealership or franchise in a county having a
| ||||||
2 | population of less than 300,000 persons when the new | ||||||
3 | location is within the
dealer's current relevant | ||||||
4 | market area, provided the new location is more
than 10
| ||||||
5 | 12 miles from the nearest dealer of the same line make. | ||||||
6 | A dealer that would be farther away
from the new | ||||||
7 | location of an existing dealership or
franchise of the | ||||||
8 | same line make after a relocation may not
file a | ||||||
9 | written protest against the relocation with the
Motor | ||||||
10 | Vehicle Review Board.
| ||||||
11 | D. Nothing in this Section shall be construed to | ||||||
12 | prevent a
franchiser from implementing affirmative | ||||||
13 | action programs providing business
opportunities for | ||||||
14 | minorities or from complying with applicable federal,
| ||||||
15 | State or local law;
| ||||||
16 | (9) to require a motor vehicle dealer to assent to a | ||||||
17 | release, assignment,
novation, waiver or estoppel which | ||||||
18 | would relieve any person from liability
imposed by this | ||||||
19 | Act;
| ||||||
20 | (10) to prevent or refuse to give effect to the | ||||||
21 | succession to the
ownership or management control of a | ||||||
22 | dealership by any legatee under the
will of a dealer or to | ||||||
23 | an heir under the laws of descent and distribution
of this | ||||||
24 | State unless the franchisee has designated a successor to | ||||||
25 | the ownership
or management control under the succession | ||||||
26 | provisions of the franchise.
Unless the
franchiser, having | ||||||
27 | the burden of proof, proves that the successor
is a person | ||||||
28 | who is not of good moral character or does not meet the
| ||||||
29 | franchiser's existing and reasonable capital standards | ||||||
30 | and, with consideration
given to the volume of sales and | ||||||
31 | service of the dealership, uniformly applied
minimum | ||||||
32 | business experience standards in the market area, any | ||||||
33 | designated
successor of a dealer or franchisee may succeed | ||||||
34 | to the ownership or management
control of a dealership | ||||||
35 | under the existing franchise if:
| ||||||
36 | (i) The designated successor gives the |
| |||||||
| |||||||
1 | franchiser written notice by
certified mail, | ||||||
2 | return receipt requested, of his or her intention | ||||||
3 | to succeed to
the ownership of the dealer within 60 | ||||||
4 | days of the dealer's death or incapacity;
and
| ||||||
5 | (ii) The designated successor agrees to be | ||||||
6 | bound by all the terms
and
conditions of the | ||||||
7 | existing franchise.
| ||||||
8 | Notwithstanding the foregoing, in the event the motor | ||||||
9 | vehicle dealer or
franchisee and manufacturer have duly | ||||||
10 | executed an agreement concerning
succession rights prior | ||||||
11 | to the dealer's death or incapacitation, the agreement
| ||||||
12 | shall be observed.
| ||||||
13 | (A) If the franchiser intends to refuse to honor | ||||||
14 | the successor to the
ownership of a deceased or | ||||||
15 | incapacitated dealer or franchisee under an
existing | ||||||
16 | franchise agreement, the franchiser shall send a | ||||||
17 | letter by certified
mail, return receipt requested, to | ||||||
18 | the
designated successor within
60 days
from receipt of | ||||||
19 | a proposal advising of its intent to refuse to honor | ||||||
20 | the
succession and to discontinue the existing | ||||||
21 | franchise agreement
and shall state that the | ||||||
22 | designated successor only has 30 days from the
receipt | ||||||
23 | of the notice to file with the Motor Vehicle Review | ||||||
24 | Board a written
protest against the proposed action.
| ||||||
25 | The notice shall set forth the
specific grounds for the | ||||||
26 | refusal to honor the succession and discontinue the
| ||||||
27 | existing franchise agreement.
| ||||||
28 | If notice of refusal is not timely served upon the | ||||||
29 | designated
successor,
the franchise agreement shall | ||||||
30 | continue in effect subject to termination only as
| ||||||
31 | otherwise permitted by paragraph (6) of subsection (d) | ||||||
32 | of Section 4 of this
Act.
| ||||||
33 | Within 30 days from the date the notice was | ||||||
34 | received by the
designated
successor or any other | ||||||
35 | person entitled to notice, the designee or other
person | ||||||
36 | may file with the Board a written protest against the |
| |||||||
| |||||||
1 | proposed action.
| ||||||
2 | When a protest has been timely filed, the Board | ||||||
3 | shall enter an
order,
fixing a date (within 60 days of | ||||||
4 | the date of the order), time,
and place of a hearing on | ||||||
5 | the protest, required under Sections 12 and 29
of this | ||||||
6 | Act, and send by certified mail, return receipt | ||||||
7 | requested, a copy of
the order to the franchiser that | ||||||
8 | filed the notice of intention of the
proposed action | ||||||
9 | and to the protesting designee or such other person.
| ||||||
10 | The manufacturer shall have the burden of proof to | ||||||
11 | establish that good
cause exists to refuse to honor the | ||||||
12 | succession and discontinue the existing
franchise | ||||||
13 | agreement. The determination whether good cause exists | ||||||
14 | to refuse to
honor the succession shall be made by the | ||||||
15 | Board under subdivision (B) of this
paragraph (10). The | ||||||
16 | manufacturer shall not refuse to honor the succession | ||||||
17 | or
discontinue the existing franchise agreement before | ||||||
18 | the hearing process is
concluded as prescribed by this | ||||||
19 | Act, and thereafter if the Board determines
that it has | ||||||
20 | failed to meet its burden of proof and that good cause | ||||||
21 | does not
exist to refuse to honor the succession and | ||||||
22 | discontinue the existing
franchise agreement.
| ||||||
23 | (B) No manufacturer shall impose any conditions | ||||||
24 | upon honoring the
succession and continuing the | ||||||
25 | existing franchise agreement with the designated
| ||||||
26 | successor other than that the franchisee has | ||||||
27 | designated a successor to the
ownership or management | ||||||
28 | control under the succession provisions of the
| ||||||
29 | franchise, or that the designated successor is of good | ||||||
30 | moral character or meets
the reasonable capital | ||||||
31 | standards and, with consideration given to the volume | ||||||
32 | of
sales and service of the dealership, uniformly | ||||||
33 | applied minimum business
experience standards in the | ||||||
34 | market area;
| ||||||
35 | (11) to prevent or refuse to approve a proposal to | ||||||
36 | establish a successor
franchise at a location previously |
| |||||||
| |||||||
1 | approved by the franchiser when submitted
with the | ||||||
2 | voluntary termination by the existing franchisee unless | ||||||
3 | the successor
franchisee would not otherwise qualify for a | ||||||
4 | new motor vehicle dealer's
license under the Illinois | ||||||
5 | Vehicle Code or unless the franchiser, having
the burden of | ||||||
6 | proof, proves that such proposed successor is not of good
| ||||||
7 | moral character or does not meet the franchiser's existing | ||||||
8 | and reasonable
capital standards and, with consideration | ||||||
9 | given to the volume of sales and
service of the dealership, | ||||||
10 | uniformly applied minimum business experience
standards in | ||||||
11 | the market area. However, when such a rejection
of a | ||||||
12 | proposal is made, the manufacturer shall give written | ||||||
13 | notice of its
reasons to the franchisee within 60 days of | ||||||
14 | receipt by the manufacturer
of the proposal. However, | ||||||
15 | nothing herein shall be construed
to prevent a franchiser | ||||||
16 | from implementing affirmative action programs providing
| ||||||
17 | business opportunities for minorities, or from complying | ||||||
18 | with applicable
federal, State or local law;
| ||||||
19 | (12) to prevent or refuse to grant a franchise to a | ||||||
20 | person because such
person owns, has investment in or | ||||||
21 | participates in the management of or holds
a franchise for | ||||||
22 | the sale of another make or line of motor vehicles within
7 | ||||||
23 | miles of the proposed franchise location in a county having | ||||||
24 | a population
of more than 300,000 persons, or within 10
12 | ||||||
25 | miles of the proposed franchise
location in a county having | ||||||
26 | a population of less than 300,000
persons; or
| ||||||
27 | (13) to prevent or attempt to prevent any new motor | ||||||
28 | vehicle dealer
from establishing any additional motor | ||||||
29 | vehicle dealership or other facility
limited to the sale of | ||||||
30 | factory repurchase vehicles or late model vehicles
or | ||||||
31 | otherwise offering for sale factory repurchase vehicles of | ||||||
32 | the same line
make at an existing franchise by failing to | ||||||
33 | make
available any contract, agreement or other | ||||||
34 | arrangement which is made
available or otherwise offered to | ||||||
35 | any person.
| ||||||
36 | (f) It is deemed a violation for a manufacturer, a |
| |||||||
| |||||||
1 | distributor, a
wholesale,
a distributor
branch or division, a | ||||||
2 | factory branch or division, or a wholesale branch or
division, | ||||||
3 | or
officer, agent, broker, shareholder, except a shareholder of | ||||||
4 | 1% or less of the
outstanding
shares of any class of securities | ||||||
5 | of a manufacturer, distributor, or wholesaler
which is a
| ||||||
6 | publicly traded corporation, or other representative, directly | ||||||
7 | or indirectly,
to own or
operate a place of business as a motor | ||||||
8 | vehicle franchisee or motor vehicle
financing
affiliate, | ||||||
9 | except that, this subsection shall not prohibit the ownership | ||||||
10 | or
operation of a
place of business by a manufacturer, | ||||||
11 | distributor, or wholesaler for a period,
not to exceed
18 | ||||||
12 | months, during the transition from one motor vehicle franchisee | ||||||
13 | to another;
or the
investment in a motor vehicle franchisee by | ||||||
14 | a manufacturer, distributor, or
wholesaler if
the investment is | ||||||
15 | for the sole purpose of enabling a partner or shareholder in
| ||||||
16 | that motor
vehicle franchisee to acquire an interest in that | ||||||
17 | motor vehicle franchisee and
that partner
or shareholder is not | ||||||
18 | otherwise employed by or associated with the
manufacturer,
| ||||||
19 | distributor, or wholesaler and would not otherwise have the | ||||||
20 | requisite capital
investment
funds to invest in the motor | ||||||
21 | vehicle franchisee, and has the right to purchase
the entire
| ||||||
22 | equity interest of the manufacturer, distributor, or | ||||||
23 | wholesaler in the motor
vehicle
franchisee within a reasonable | ||||||
24 | period of time not to exceed 5 years.
| ||||||
25 | (Source: P.A. 90-655, eff. 7-30-98; 91-415, eff. 1-1-00; | ||||||
26 | 91-485, eff.
1-1-00; 91-701, eff. 5-12-00.)
|