Rep. Rich Brauer

Filed: 4/5/2005

 

 


 

 


 
09400HB2991ham001 LRB094 05242 RXD 44434 a

1
AMENDMENT TO HOUSE BILL 2991

2     AMENDMENT NO. ______. Amend House Bill 2991 by replacing
3 everything after the enacting clause with the following:
 
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:

 

 

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1         (1) to accept, buy or order any motor vehicle or
2     vehicles, appliances, equipment, parts or accessories
3     therefor, or any other commodity or commodities or service
4     or services which such motor vehicle dealer has not
5     voluntarily ordered or requested except items required by
6     applicable local, state or federal law; or to require a
7     motor vehicle dealer to accept, buy, order or purchase such
8     items in order to obtain any motor vehicle or vehicles or
9     any other commodity or commodities which have been ordered
10     or requested by such motor vehicle dealer;
11         (2) to order or accept delivery of any motor vehicle
12     with special features, appliances, accessories or
13     equipment not included in the list price of the motor
14     vehicles as publicly advertised by the manufacturer
15     thereof, except items required by applicable law; or
16         (3) to order for anyone any parts, accessories,
17     equipment, machinery, tools, appliances or any commodity
18     whatsoever, except items required by applicable law.
19     (d) It shall be deemed a violation for a manufacturer, a
20 distributor, a wholesaler, a distributor branch or division, or
21 officer, agent or other representative thereof:
22         (1) to adopt, change, establish or implement a plan or
23     system for the allocation and distribution of new motor
24     vehicles to motor vehicle dealers which is arbitrary or
25     capricious or to modify an existing plan so as to cause the
26     same to be arbitrary or capricious;
27         (2) to fail or refuse to advise or disclose to any
28     motor vehicle dealer having a franchise or selling
29     agreement, upon written request therefor, the basis upon
30     which new motor vehicles of the same line make are
31     allocated or distributed to motor vehicle dealers in the
32     State and the basis upon which the current allocation or
33     distribution is being made or will be made to such motor
34     vehicle dealer;

 

 

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1         (3) to refuse to deliver in reasonable quantities and
2     within a reasonable time after receipt of dealer's order,
3     to any motor vehicle dealer having a franchise or selling
4     agreement for the retail sale of new motor vehicles sold or
5     distributed by such manufacturer, distributor, wholesaler,
6     distributor branch or division, factory branch or division
7     or wholesale branch or division, any such motor vehicles as
8     are covered by such franchise or selling agreement
9     specifically publicly advertised in the State by such
10     manufacturer, distributor, wholesaler, distributor branch
11     or division, factory branch or division, or wholesale
12     branch or division to be available for immediate delivery.
13     However, the failure to deliver any motor vehicle shall not
14     be considered a violation of this Act if such failure is
15     due to an act of God, a work stoppage or delay due to a
16     strike or labor difficulty, a shortage of materials, a lack
17     of manufacturing capacity, a freight embargo or other cause
18     over which the manufacturer, distributor, or wholesaler,
19     or any agent thereof has no control;
20         (4) to coerce, or attempt to coerce, any motor vehicle
21     dealer to enter into any agreement with such manufacturer,
22     distributor, wholesaler, distributor branch or division,
23     factory branch or division, or wholesale branch or
24     division, or officer, agent or other representative
25     thereof, or to do any other act prejudicial to the dealer
26     by threatening to reduce his allocation of motor vehicles
27     or cancel any franchise or any selling agreement existing
28     between such manufacturer, distributor, wholesaler,
29     distributor branch or division, or factory branch or
30     division, or wholesale branch or division, and the dealer.
31     However, notice in good faith to any motor vehicle dealer
32     of the dealer's violation of any terms or provisions of
33     such franchise or selling agreement or of any law or
34     regulation applicable to the conduct of a motor vehicle

 

 

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1     dealer shall not constitute a violation of this Act;
2         (5) to require a franchisee to participate in an
3     advertising campaign or contest or any promotional
4     campaign, or to purchase or lease any promotional
5     materials, training materials, show room or other display
6     decorations or materials at the expense of the franchisee;
7         (6) to cancel or terminate the franchise or selling
8     agreement of a motor vehicle dealer without good cause and
9     without giving notice as hereinafter provided; to fail or
10     refuse to extend the franchise or selling agreement of a
11     motor vehicle dealer upon its expiration without good cause
12     and without giving notice as hereinafter provided; or, to
13     offer a renewal, replacement or succeeding franchise or
14     selling agreement containing terms and provisions the
15     effect of which is to substantially change or modify the
16     sales and service obligations or capital requirements of
17     the motor vehicle dealer arbitrarily and without good cause
18     and without giving notice as hereinafter provided
19     notwithstanding any term or provision of a franchise or
20     selling agreement.
21             (A) If a manufacturer, distributor, wholesaler,
22         distributor branch or division, factory branch or
23         division or wholesale branch or division intends to
24         cancel or terminate a franchise or selling agreement or
25         intends not to extend or renew a franchise or selling
26         agreement on its expiration, it shall send a letter by
27         certified mail, return receipt requested, to the
28         affected franchisee at least 60 days before the
29         effective date of the proposed action, or not later
30         than 10 days before the proposed action when the reason
31         for the action is based upon either of the following:
32                 (i) the business operations of the franchisee
33             have been abandoned or the franchisee has failed to
34             conduct customary sales and service operations

 

 

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1             during customary business hours for at least 7
2             consecutive business days unless such closing is
3             due to an act of God, strike or labor difficulty or
4             other cause over which the franchisee has no
5             control; or
6                 (ii) the conviction of or plea of nolo
7             contendere by the motor vehicle dealer or any
8             operator thereof in a court of competent
9             jurisdiction to an offense punishable by
10             imprisonment for more than two years.
11             Each notice of proposed action shall include a
12         detailed statement setting forth the specific grounds
13         for the proposed cancellation, termination, or refusal
14         to extend or renew and shall state that the dealer has
15         only 30 days from receipt of the notice to file with
16         the Motor Vehicle Review Board a written protest
17         against the proposed action.
18             (B) If a manufacturer, distributor, wholesaler,
19         distributor branch or division, factory branch or
20         division or wholesale branch or division intends to
21         change substantially or modify the sales and service
22         obligations or capital requirements of a motor vehicle
23         dealer as a condition to extending or renewing the
24         existing franchise or selling agreement of such motor
25         vehicle dealer, it shall send a letter by certified
26         mail, return receipt requested, to the affected
27         franchisee at least 60 days before the date of
28         expiration of the franchise or selling agreement. Each
29         notice of proposed action shall include a detailed
30         statement setting forth the specific grounds for the
31         proposed action and shall state that the dealer has
32         only 30 days from receipt of the notice to file with
33         the Motor Vehicle Review Board a written protest
34         against the proposed action.

 

 

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1             (C) Within 30 days from receipt of the notice under
2         subparagraphs (A) and (B), the franchisee may file with
3         the Board a written protest against the proposed
4         action.
5             When the protest has been timely filed, the Board
6         shall enter an order, fixing a date (within 60 days of
7         the date of the order), time, and place of a hearing on
8         the protest required under Sections 12 and 29 of this
9         Act, and send by certified mail, return receipt
10         requested, a copy of the order to the manufacturer that
11         filed the notice of intention of the proposed action
12         and to the protesting dealer or franchisee.
13             The manufacturer shall have the burden of proof to
14         establish that good cause exists to cancel or
15         terminate, or fail to extend or renew the franchise or
16         selling agreement of a motor vehicle dealer or
17         franchisee, and to change substantially or modify the
18         sales and service obligations or capital requirements
19         of a motor vehicle dealer as a condition to extending
20         or renewing the existing franchise or selling
21         agreement. The determination whether good cause exists
22         to cancel, terminate, or refuse to renew or extend the
23         franchise or selling agreement, or to change or modify
24         the obligations of the dealer as a condition to offer
25         renewal, replacement, or succession shall be made by
26         the Board under subsection (d) of Section 12 of this
27         Act.
28             (D) Notwithstanding the terms, conditions, or
29         provisions of a franchise or selling agreement, the
30         following shall not constitute good cause for
31         cancelling or terminating or failing to extend or renew
32         the franchise or selling agreement: (i) the change of
33         ownership or executive management of the franchisee's
34         dealership; or (ii) the fact that the franchisee or

 

 

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1         owner of an interest in the franchise owns, has an
2         investment in, participates in the management of, or
3         holds a license for the sale of the same or any other
4         line make of new motor vehicles.
5             Good cause shall exist to cancel, terminate or fail
6         to offer a renewal or replacement franchise or selling
7         agreement to all franchisees of a line make if the
8         manufacturer permanently discontinues the manufacture
9         or assembly of motor vehicles of such line make.
10             (E) The manufacturer may not cancel or terminate,
11         or fail to extend or renew a franchise or selling
12         agreement or change or modify the obligations of the
13         franchisee as a condition to offering a renewal,
14         replacement, or succeeding franchise or selling
15         agreement before the hearing process is concluded as
16         prescribed by this Act, and thereafter, if the Board
17         determines that the manufacturer has failed to meet its
18         burden of proof and that good cause does not exist to
19         allow the proposed action; or
20         (7) notwithstanding the terms of any franchise
21     agreement, to fail to indemnify and hold harmless its
22     franchised dealers against any judgment or settlement for
23     damages, including, but not limited to, court costs, expert
24     witness fees, reasonable attorneys' fees of the new motor
25     vehicle dealer, and other expenses incurred in the
26     litigation, so long as such fees and costs are reasonable,
27     arising out of complaints, claims or lawsuits including,
28     but not limited to, strict liability, negligence,
29     misrepresentation, warranty (express or implied), or
30     recision of the sale as defined in Section 2-608 of the
31     Uniform Commercial Code, to the extent that the judgment or
32     settlement relates to the alleged defective or negligent
33     manufacture, assembly or design of new motor vehicles,
34     parts or accessories or other functions by the

 

 

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1     manufacturer, beyond the control of the dealer; provided
2     that, in order to provide an adequate defense, the
3     manufacturer receives notice of the filing of a complaint,
4     claim, or lawsuit within 60 days after the filing.
5     (e) It shall be deemed a violation for a manufacturer, a
6 distributor, a wholesaler, a distributor branch or division or
7 officer, agent or other representative thereof:
8         (1) to resort to or use any false or misleading
9     advertisement in connection with his business as such
10     manufacturer, distributor, wholesaler, distributor branch
11     or division or officer, agent or other representative
12     thereof;
13         (2) to offer to sell or lease, or to sell or lease, any
14     new motor vehicle to any motor vehicle dealer at a lower
15     actual price therefor than the actual price offered to any
16     other motor vehicle dealer for the same model vehicle
17     similarly equipped or to utilize any device including, but
18     not limited to, sales promotion plans or programs which
19     result in such lesser actual price or fail to make
20     available to any motor vehicle dealer any preferential
21     pricing, incentive, rebate, finance rate, or low interest
22     loan program offered to competing motor vehicle dealers in
23     other contiguous states. However, the provisions of this
24     paragraph shall not apply to sales to a motor vehicle
25     dealer for resale to any unit of the United States
26     Government, the State or any of its political subdivisions;
27         (3) to offer to sell or lease, or to sell or lease, any
28     new motor vehicle to any person, except a wholesaler,
29     distributor or manufacturer's employees at a lower actual
30     price therefor than the actual price offered and charged to
31     a motor vehicle dealer for the same model vehicle similarly
32     equipped or to utilize any device which results in such
33     lesser actual price. However, the provisions of this
34     paragraph shall not apply to sales to a motor vehicle

 

 

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1     dealer for resale to any unit of the United States
2     Government, the State or any of its political subdivisions;
3         (4) to prevent or attempt to prevent by contract or
4     otherwise any motor vehicle dealer or franchisee from
5     changing the executive management control of the motor
6     vehicle dealer or franchisee unless the franchiser, having
7     the burden of proof, proves that such change of executive
8     management will result in executive management control by a
9     person or persons who are not of good moral character or
10     who do not meet the franchiser's existing and, with
11     consideration given to the volume of sales and service of
12     the dealership, uniformly applied minimum business
13     experience standards in the market area. However where the
14     manufacturer rejects a proposed change in executive
15     management control, the manufacturer shall give written
16     notice of his reasons to the dealer within 60 days of
17     notice to the manufacturer by the dealer of the proposed
18     change. If the manufacturer does not send a letter to the
19     franchisee by certified mail, return receipt requested,
20     within 60 days from receipt by the manufacturer of the
21     proposed change, then the change of the executive
22     management control of the franchisee shall be deemed
23     accepted as proposed by the franchisee, and the
24     manufacturer shall give immediate effect to such change;
25         (5) to prevent or attempt to prevent by contract or
26     otherwise any motor vehicle dealer from establishing or
27     changing the capital structure of his dealership or the
28     means by or through which he finances the operation
29     thereof; provided the dealer meets any reasonable capital
30     standards agreed to between the dealer and the
31     manufacturer, distributor or wholesaler, who may require
32     that the sources, method and manner by which the dealer
33     finances or intends to finance its operation, equipment or
34     facilities be fully disclosed;

 

 

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1         (6) to refuse to give effect to or prevent or attempt
2     to prevent by contract or otherwise any motor vehicle
3     dealer or any officer, partner or stockholder of any motor
4     vehicle dealer from selling or transferring any part of the
5     interest of any of them to any other person or persons or
6     party or parties unless such sale or transfer is to a
7     transferee who would not otherwise qualify for a new motor
8     vehicle dealers license under "The Illinois Vehicle Code"
9     or unless the franchiser, having the burden of proof,
10     proves that such sale or transfer is to a person or party
11     who is not of good moral character or does not meet the
12     franchiser's existing and reasonable capital standards
13     and, with consideration given to the volume of sales and
14     service of the dealership, uniformly applied minimum
15     business experience standards in the market area. However,
16     nothing herein shall be construed to prevent a franchiser
17     from implementing affirmative action programs providing
18     business opportunities for minorities or from complying
19     with applicable federal, State or local law:
20             (A) If the manufacturer intends to refuse to
21         approve the sale or transfer of all or a part of the
22         interest, then it shall, within 60 days from receipt of
23         the completed application forms generally utilized by
24         a manufacturer to conduct its review and a copy of all
25         agreements regarding the proposed transfer, send a
26         letter by certified mail, return receipt requested,
27         advising the franchisee of any refusal to approve the
28         sale or transfer of all or part of the interest and
29         shall state that the dealer only has 30 days from the
30         receipt of the notice to file with the Motor Vehicle
31         Review Board a written protest against the proposed
32         action. The notice shall set forth specific criteria
33         used to evaluate the prospective transferee and the
34         grounds for refusing to approve the sale or transfer to

 

 

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1         that transferee. Within 30 days from the franchisee's
2         receipt of the manufacturer's notice, the franchisee
3         may file with the Board a written protest against the
4         proposed action.
5             When a protest has been timely filed, the Board
6         shall enter an order, fixing the date (within 60 days
7         of the date of such order), time, and place of a
8         hearing on the protest, required under Sections 12 and
9         29 of this Act, and send by certified mail, return
10         receipt requested, a copy of the order to the
11         manufacturer that filed notice of intention of the
12         proposed action and to the protesting franchisee.
13             The manufacturer shall have the burden of proof to
14         establish that good cause exists to refuse to approve
15         the sale or transfer to the transferee. The
16         determination whether good cause exists to refuse to
17         approve the sale or transfer shall be made by the Board
18         under subdivisions (6)(B). The manufacturer shall not
19         refuse to approve the sale or transfer by a dealer or
20         an officer, partner, or stockholder of a franchise or
21         any part of the interest to any person or persons
22         before the hearing process is concluded as prescribed
23         by this Act, and thereafter if the Board determines
24         that the manufacturer has failed to meet its burden of
25         proof and that good cause does not exist to refuse to
26         approve the sale or transfer to the transferee.
27             (B) Good cause to refuse to approve such sale or
28         transfer under this Section is established when such
29         sale or transfer is to a transferee who would not
30         otherwise qualify for a new motor vehicle dealers
31         license under "The Illinois Vehicle Code" or such sale
32         or transfer is to a person or party who is not of good
33         moral character or does not meet the franchiser's
34         existing and reasonable capital standards and, with

 

 

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1         consideration given to the volume of sales and service
2         of the dealership, uniformly applied minimum business
3         experience standards in the market area.
4         (7) to obtain money, goods, services, anything of
5     value, or any other benefit from any other person with whom
6     the motor vehicle dealer does business, on account of or in
7     relation to the transactions between the dealer and the
8     other person as compensation, except for services actually
9     rendered, unless such benefit is promptly accounted for and
10     transmitted to the motor vehicle dealer;
11         (8) to grant an additional franchise in the relevant
12     market area of an existing franchise of the same line make
13     or to relocate an existing motor vehicle dealership within
14     or into a relevant market area of an existing franchise of
15     the same line make. However, if the manufacturer wishes to
16     grant such an additional franchise to an independent person
17     in a bona fide relationship in which such person is
18     prepared to make a significant investment subject to loss
19     in such a dealership, or if the manufacturer wishes to
20     relocate an existing motor vehicle dealership, then the
21     manufacturer shall send a letter by certified mail, return
22     receipt requested, to each existing dealer or dealers of
23     the same line make whose relevant market area includes the
24     proposed location of the additional or relocated franchise
25     at least 60 days before the manufacturer grants an
26     additional franchise or relocates an existing franchise of
27     the same line make within or into the relevant market area
28     of an existing franchisee of the same line make. Each
29     notice shall set forth the specific grounds for the
30     proposed grant of an additional or relocation of an
31     existing franchise. Unless the parties agree upon the grant
32     or establishment of the additional or relocated franchise
33     within 30 days from the date the notice was received by the
34     existing franchisee of the same line make or any person

 

 

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1     entitled to receive such notice, the franchisee or other
2     person may file with the Board a written protest against
3     the grant or establishment of the proposed additional or
4     relocated franchise and shall state that the dealer only
5     has 30 days from the receipt of the notice to file with the
6     Motor Vehicle Review Board a written protest against the
7     proposed action.
8         When a protest has been timely filed, the Board shall
9     enter an order fixing a date (within 60 days of the date of
10     the order), time, and place of a hearing on the protest,
11     required under Sections 12 and 29 of this Act, and send by
12     certified or registered mail, return receipt requested, a
13     copy of the order to the manufacturer that filed the notice
14     of intention to grant or establish the proposed additional
15     or relocated franchise and to the protesting dealer or
16     dealers of the same line make whose relevant market area
17     includes the proposed location of the additional or
18     relocated franchise.
19         When more than one protest is filed against the grant
20     or establishment of the additional or relocated franchise
21     of the same line make, the Board may consolidate the
22     hearings to expedite disposition of the matter. The
23     manufacturer shall have the burden of proof to establish
24     that good cause exists to allow the grant or establishment
25     of the additional or relocated franchise. The manufacturer
26     may not grant or establish the additional franchise or
27     relocate the existing franchise before the hearing process
28     is concluded as prescribed by this Act, and thereafter if
29     the Board determines that the manufacturer has failed to
30     meet its burden of proof and that good cause does not exist
31     to allow the grant or establishment of the additional
32     franchise or relocation of the existing franchise.
33         The determination whether good cause exists for
34     allowing the grant or establishment of an additional

 

 

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1     franchise or relocated existing franchise, shall be made by
2     the Board under subsection (c) of Section 12 of this Act.
3     If the manufacturer seeks to enter into a contract,
4     agreement or other arrangement with any person,
5     establishing any additional motor vehicle dealership or
6     other facility, limited to the sale of factory repurchase
7     vehicles or late model vehicles, then the manufacturer
8     shall follow the notice procedures set forth in this
9     Section and the determination whether good cause exists for
10     allowing the proposed agreement shall be made by the Board
11     under subsection (c) of Section 12, with the manufacturer
12     having the burden of proof.
13             A. (Blank).
14             B. For the purposes of this Section, appointment of
15         a successor motor vehicle dealer at the same location
16         as its predecessor, or within 2 miles of such location,
17         or the relocation of an existing dealer or franchise
18         within 2 miles of the relocating dealer's or
19         franchisee's existing location, shall not be construed
20         as a grant, establishment or the entering into of an
21         additional franchise or selling agreement, or a
22         relocation of an existing franchise. The reopening of a
23         motor vehicle dealership that has not been in operation
24         for 18 months or more shall be deemed the grant of an
25         additional franchise or selling agreement.
26             C. This Section does not apply to the relocation of
27         an existing dealership or franchise in a county having
28         a population of more than 300,000 persons when the new
29         location is within the dealer's current relevant
30         market area, provided the new location is more than 7
31         miles from the nearest dealer of the same line make.
32         This Section does not apply to the relocation of an
33         existing dealership or franchise in a county having a
34         population of less than 300,000 persons when the new

 

 

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1         location is within the dealer's current relevant
2         market area, provided the new location is more than 12
3         miles from the nearest dealer of the same line make.
4         This Section does not apply to the relocation of an
5         existing dealership or franchise in any county having a
6         population of less than 35,000 persons when the new
7         location is moving less than 3 miles from the nearest
8         dealer of the same line make. A dealer that would be
9         farther away from the new location of an existing
10         dealership or franchise of the same line make after a
11         relocation may not file a written protest against the
12         relocation with the Motor Vehicle Review Board.
13             D. Nothing in this Section shall be construed to
14         prevent a franchiser from implementing affirmative
15         action programs providing business opportunities for
16         minorities or from complying with applicable federal,
17         State or local law;
18         (9) to require a motor vehicle dealer to assent to a
19     release, assignment, novation, waiver or estoppel which
20     would relieve any person from liability imposed by this
21     Act;
22         (10) to prevent or refuse to give effect to the
23     succession to the ownership or management control of a
24     dealership by any legatee under the will of a dealer or to
25     an heir under the laws of descent and distribution of this
26     State unless the franchisee has designated a successor to
27     the ownership or management control under the succession
28     provisions of the franchise. Unless the franchiser, having
29     the burden of proof, proves that the successor is a person
30     who is not of good moral character or does not meet the
31     franchiser's existing and reasonable capital standards
32     and, with consideration given to the volume of sales and
33     service of the dealership, uniformly applied minimum
34     business experience standards in the market area, any

 

 

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1     designated successor of a dealer or franchisee may succeed
2     to the ownership or management control of a dealership
3     under the existing franchise if:
4                 (i) The designated successor gives the
5             franchiser written notice by certified mail,
6             return receipt requested, of his or her intention
7             to succeed to the ownership of the dealer within 60
8             days of the dealer's death or incapacity; and
9                 (ii) The designated successor agrees to be
10             bound by all the terms and conditions of the
11             existing franchise.
12         Notwithstanding the foregoing, in the event the motor
13     vehicle dealer or franchisee and manufacturer have duly
14     executed an agreement concerning succession rights prior
15     to the dealer's death or incapacitation, the agreement
16     shall be observed.
17             (A) If the franchiser intends to refuse to honor
18         the successor to the ownership of a deceased or
19         incapacitated dealer or franchisee under an existing
20         franchise agreement, the franchiser shall send a
21         letter by certified mail, return receipt requested, to
22         the designated successor within 60 days from receipt of
23         a proposal advising of its intent to refuse to honor
24         the succession and to discontinue the existing
25         franchise agreement and shall state that the
26         designated successor only has 30 days from the receipt
27         of the notice to file with the Motor Vehicle Review
28         Board a written protest against the proposed action.
29         The notice shall set forth the specific grounds for the
30         refusal to honor the succession and discontinue the
31         existing franchise agreement.
32             If notice of refusal is not timely served upon the
33         designated successor, the franchise agreement shall
34         continue in effect subject to termination only as

 

 

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1         otherwise permitted by paragraph (6) of subsection (d)
2         of Section 4 of this Act.
3             Within 30 days from the date the notice was
4         received by the designated successor or any other
5         person entitled to notice, the designee or other person
6         may file with the Board a written protest against the
7         proposed action.
8             When a protest has been timely filed, the Board
9         shall enter an order, fixing a date (within 60 days of
10         the date of the order), time, and place of a hearing on
11         the protest, required under Sections 12 and 29 of this
12         Act, and send by certified mail, return receipt
13         requested, a copy of the order to the franchiser that
14         filed the notice of intention of the proposed action
15         and to the protesting designee or such other person.
16             The manufacturer shall have the burden of proof to
17         establish that good cause exists to refuse to honor the
18         succession and discontinue the existing franchise
19         agreement. The determination whether good cause exists
20         to refuse to honor the succession shall be made by the
21         Board under subdivision (B) of this paragraph (10). The
22         manufacturer shall not refuse to honor the succession
23         or discontinue the existing franchise agreement before
24         the hearing process is concluded as prescribed by this
25         Act, and thereafter if the Board determines that it has
26         failed to meet its burden of proof and that good cause
27         does not exist to refuse to honor the succession and
28         discontinue the existing franchise agreement.
29             (B) No manufacturer shall impose any conditions
30         upon honoring the succession and continuing the
31         existing franchise agreement with the designated
32         successor other than that the franchisee has
33         designated a successor to the ownership or management
34         control under the succession provisions of the

 

 

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1         franchise, or that the designated successor is of good
2         moral character or meets the reasonable capital
3         standards and, with consideration given to the volume
4         of sales and service of the dealership, uniformly
5         applied minimum business experience standards in the
6         market area;
7         (11) to prevent or refuse to approve a proposal to
8     establish a successor franchise at a location previously
9     approved by the franchiser when submitted with the
10     voluntary termination by the existing franchisee unless
11     the successor franchisee would not otherwise qualify for a
12     new motor vehicle dealer's license under the Illinois
13     Vehicle Code or unless the franchiser, having the burden of
14     proof, proves that such proposed successor is not of good
15     moral character or does not meet the franchiser's existing
16     and reasonable capital standards and, with consideration
17     given to the volume of sales and service of the dealership,
18     uniformly applied minimum business experience standards in
19     the market area. However, when such a rejection of a
20     proposal is made, the manufacturer shall give written
21     notice of its reasons to the franchisee within 60 days of
22     receipt by the manufacturer of the proposal. However,
23     nothing herein shall be construed to prevent a franchiser
24     from implementing affirmative action programs providing
25     business opportunities for minorities, or from complying
26     with applicable federal, State or local law;
27         (12) to prevent or refuse to grant a franchise to a
28     person because such person owns, has investment in or
29     participates in the management of or holds a franchise for
30     the sale of another make or line of motor vehicles within 7
31     miles of the proposed franchise location in a county having
32     a population of more than 300,000 persons, or within 10 12
33     miles of the proposed franchise location in a county having
34     a population of less than 300,000 persons; or

 

 

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1         (13) to prevent or attempt to prevent any new motor
2     vehicle dealer from establishing any additional motor
3     vehicle dealership or other facility limited to the sale of
4     factory repurchase vehicles or late model vehicles or
5     otherwise offering for sale factory repurchase vehicles of
6     the same line make at an existing franchise by failing to
7     make available any contract, agreement or other
8     arrangement which is made available or otherwise offered to
9     any person.
10     (f) It is deemed a violation for a manufacturer, a
11 distributor, a wholesale, a distributor branch or division, a
12 factory branch or division, or a wholesale branch or division,
13 or officer, agent, broker, shareholder, except a shareholder of
14 1% or less of the outstanding shares of any class of securities
15 of a manufacturer, distributor, or wholesaler which is a
16 publicly traded corporation, or other representative, directly
17 or indirectly, to own or operate a place of business as a motor
18 vehicle franchisee or motor vehicle financing affiliate,
19 except that, this subsection shall not prohibit the ownership
20 or operation of a place of business by a manufacturer,
21 distributor, or wholesaler for a period, not to exceed 18
22 months, during the transition from one motor vehicle franchisee
23 to another; or the investment in a motor vehicle franchisee by
24 a manufacturer, distributor, or wholesaler if the investment is
25 for the sole purpose of enabling a partner or shareholder in
26 that motor vehicle franchisee to acquire an interest in that
27 motor vehicle franchisee and that partner or shareholder is not
28 otherwise employed by or associated with the manufacturer,
29 distributor, or wholesaler and would not otherwise have the
30 requisite capital investment funds to invest in the motor
31 vehicle franchisee, and has the right to purchase the entire
32 equity interest of the manufacturer, distributor, or
33 wholesaler in the motor vehicle franchisee within a reasonable
34 period of time not to exceed 5 years.

 

 

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1 (Source: P.A. 90-655, eff. 7-30-98; 91-415, eff. 1-1-00;
2 91-485, eff. 1-1-00; 91-701, eff. 5-12-00.)".