SB1417 Enrolled LRB096 07805 KTG 17908 b

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 Sections 2, 4, 6, and 9 and by adding Section 9.5 as
6 follows:
 
7     (815 ILCS 710/2)  (from Ch. 121 1/2, par. 752)
8     Sec. 2. Definitions. As used in this Act, the following
9 words shall, unless the context otherwise requires, have the
10 following meanings:
11     (a) "Motor vehicle", any motor driven vehicle required to
12 be registered under "The Illinois Vehicle Code". Beginning
13 January 1, 2010, the term "motor vehicle" also includes any
14 engine, transmission, or rear axle, regardless of whether it is
15 attached to a vehicle chassis, that is manufactured for
16 installation in any motor-driven vehicle with a gross vehicle
17 weight rating of more than 16,000 pounds that is required to be
18 registered under the Illinois Vehicle Code.
19     (b) "Manufacturer", any person engaged in the business of
20 manufacturing or assembling new and unused motor vehicles.
21     (c) "Factory branch", a branch office maintained by a
22 manufacturer which manufactures or assembles motor vehicles
23 for sale to distributors or motor vehicle dealers or which is

 

 

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1 maintained for directing and supervising the representatives
2 of the manufacturer.
3     (d) "Distributor branch", a branch office maintained by a
4 distributor or wholesaler who or which sells or distributes new
5 or used motor vehicles to motor vehicle dealers.
6     (e) "Factory representative", a representative employed by
7 a manufacturer or employed by a factory branch for the purpose
8 of making or promoting the sale of motor vehicles or for
9 contracting with, supervising, servicing or instructing motor
10 vehicle dealers or prospective motor vehicle dealers.
11     (f) "Distributor representative", a representative
12 employed by a distributor branch, distributor or wholesaler.
13     (g) "Distributor" or "wholesaler", any person who sells or
14 distributes new or used motor vehicles to motor vehicle dealers
15 or who maintains distributor representatives within the State.
16     (h) "Motor vehicle dealer", any person who, in the ordinary
17 course of business, is engaged in the business of selling new
18 or used motor vehicles to consumers or other end users.
19     (i) "Franchise", an oral or written arrangement for a
20 definite or indefinite period in which a manufacturer,
21 distributor or wholesaler grants to a motor vehicle dealer a
22 license to use a trade name, service mark, or related
23 characteristic, and in which there is a community of interest
24 in the marketing of motor vehicles or services related thereto
25 at wholesale, retail, leasing or otherwise.
26     (j) "Franchiser", a manufacturer, distributor or

 

 

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1 wholesaler who grants a franchise to a motor vehicle dealer.
2     (k) "Franchisee", a motor vehicle dealer to whom a
3 franchise is offered or granted.
4     (l) "Sale", shall include the issuance, transfer,
5 agreement for transfer, exchange, pledge, hypothecation,
6 mortgage in any form, whether by transfer in trust or
7 otherwise, of any motor vehicle or interest therein or of any
8 franchise related thereto; and any option, subscription or
9 other contract or solicitation, looking to a sale, or offer or
10 attempt to sell in any form, whether oral or written. A gift or
11 delivery of any motor vehicle or franchise with respect thereto
12 with or as a bonus on account of the sale of anything shall be
13 deemed a sale of such motor vehicle or franchise.
14     (m) "Fraud", shall include, in addition to its normal legal
15 connotation, the following: a misrepresentation in any manner,
16 whether intentionally false or due to reckless disregard for
17 truth or falsity, of a material fact; a promise or
18 representation not made honestly and in good faith; and an
19 intentional failure to disclose a material fact.
20     (n) "Person", a natural person, corporation, partnership,
21 trust or other entity, and in case of an entity, it shall
22 include any other entity in which it has a majority interest or
23 which it effectively controls as well as the individual
24 officers, directors and other persons in active control of the
25 activities of each such entity.
26     (o) "New motor vehicle", a motor vehicle which has not been

 

 

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1 previously sold to any person except a distributor or
2 wholesaler or motor vehicle dealer for resale.
3     (p) "Market Area", the franchisee's area of primary
4 responsibility as defined in its franchise.
5     (q) "Relevant Market Area", the area within a radius of 10
6 miles from the principal location of a franchise or dealership
7 if said principal location is in a county having a population
8 of more than 300,000 persons; if the principal location of a
9 franchise or dealership is in a county having a population of
10 less than 300,000 persons, then "relevant market area" shall
11 mean the area within a radius of 15 miles from the principal
12 location of said franchise or dealership.
13     (r) "Late model vehicle" means a vehicle of the current
14 model year and one, 2, or 3 preceding model years for which the
15 motor vehicle dealer holds an existing franchise from the
16 manufacturer for that same line make.
17     (s) "Factory repurchase vehicle" means a motor vehicle of
18 the current model year or a late model vehicle reacquired by
19 the manufacturer under an existing agreement or otherwise from
20 a fleet, lease or daily rental company or under any State or
21 federal law or program relating to allegedly defective new
22 motor vehicles, and offered for sale and resold by the
23 manufacturer directly or at a factory authorized or sponsored
24 auction.
25     (t) "Board" means the Motor Vehicle Review Board created
26 under this Act.

 

 

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1     (u) "Secretary of State" means the Secretary of State of
2 Illinois.
3     (v) "Good cause" means facts establishing commercial
4 reasonableness in lawful or privileged competition and
5 business practices as defined at common law.
6 (Source: P.A. 95-678, eff. 10-11-07.)
 
7     (815 ILCS 710/4)  (from Ch. 121 1/2, par. 754)
8     Sec. 4. Unfair competition and practices.
9     (a) The unfair methods of competition and unfair and
10 deceptive acts or practices listed in this Section are hereby
11 declared to be unlawful. In construing the provisions of this
12 Section, the courts may be guided by the interpretations of the
13 Federal Trade Commission Act (15 U.S.C. 45 et seq.), as from
14 time to time amended.
15     (b) It shall be deemed a violation for any manufacturer,
16 factory branch, factory representative, distributor or
17 wholesaler, distributor branch, distributor representative or
18 motor vehicle dealer to engage in any action with respect to a
19 franchise which is arbitrary, in bad faith or unconscionable
20 and which causes damage to any of the parties or to the public.
21     (c) It shall be deemed a violation for a manufacturer, a
22 distributor, a wholesaler, a distributor branch or division, a
23 factory branch or division, or a wholesale branch or division,
24 or officer, agent or other representative thereof, to coerce,
25 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;

 

 

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1         (2) to fail or refuse to advise or disclose to any
2     motor vehicle dealer having a franchise or selling
3     agreement, upon written request therefor, the basis upon
4     which new motor vehicles of the same line make are
5     allocated or distributed to motor vehicle dealers in the
6     State and the basis upon which the current allocation or
7     distribution is being made or will be made to such motor
8     vehicle dealer;
9         (3) to refuse to deliver in reasonable quantities and
10     within a reasonable time after receipt of dealer's order,
11     to any motor vehicle dealer having a franchise or selling
12     agreement for the retail sale of new motor vehicles sold or
13     distributed by such manufacturer, distributor, wholesaler,
14     distributor branch or division, factory branch or division
15     or wholesale branch or division, any such motor vehicles as
16     are covered by such franchise or selling agreement
17     specifically publicly advertised in the State by such
18     manufacturer, distributor, wholesaler, distributor branch
19     or division, factory branch or division, or wholesale
20     branch or division to be available for immediate delivery.
21     However, the failure to deliver any motor vehicle shall not
22     be considered a violation of this Act if such failure is
23     due to an act of God, a work stoppage or delay due to a
24     strike or labor difficulty, a shortage of materials, a lack
25     of manufacturing capacity, a freight embargo or other cause
26     over which the manufacturer, distributor, or wholesaler,

 

 

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1     or any agent thereof has no control;
2         (4) to coerce, or attempt to coerce, any motor vehicle
3     dealer to enter into any agreement with such manufacturer,
4     distributor, wholesaler, distributor branch or division,
5     factory branch or division, or wholesale branch or
6     division, or officer, agent or other representative
7     thereof, or to do any other act prejudicial to the dealer
8     by threatening to reduce his allocation of motor vehicles
9     or cancel any franchise or any selling agreement existing
10     between such manufacturer, distributor, wholesaler,
11     distributor branch or division, or factory branch or
12     division, or wholesale branch or division, and the dealer.
13     However, notice in good faith to any motor vehicle dealer
14     of the dealer's violation of any terms or provisions of
15     such franchise or selling agreement or of any law or
16     regulation applicable to the conduct of a motor vehicle
17     dealer shall not constitute a violation of this Act;
18         (5) to require a franchisee to participate in an
19     advertising campaign or contest or any promotional
20     campaign, or to purchase or lease any promotional
21     materials, training materials, show room or other display
22     decorations or materials at the expense of the franchisee;
23         (6) to cancel or terminate the franchise or selling
24     agreement of a motor vehicle dealer without good cause and
25     without giving notice as hereinafter provided; to fail or
26     refuse to extend the franchise or selling agreement of a

 

 

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1     motor vehicle dealer upon its expiration without good cause
2     and without giving notice as hereinafter provided; or, to
3     offer a renewal, replacement or succeeding franchise or
4     selling agreement containing terms and provisions the
5     effect of which is to substantially change or modify the
6     sales and service obligations or capital requirements of
7     the motor vehicle dealer arbitrarily and without good cause
8     and without giving notice as hereinafter provided
9     notwithstanding any term or provision of a franchise or
10     selling agreement.
11             (A) If a manufacturer, distributor, wholesaler,
12         distributor branch or division, factory branch or
13         division or wholesale branch or division intends to
14         cancel or terminate a franchise or selling agreement or
15         intends not to extend or renew a franchise or selling
16         agreement on its expiration, it shall send a letter by
17         certified mail, return receipt requested, to the
18         affected franchisee at least 60 days before the
19         effective date of the proposed action, or not later
20         than 10 days before the proposed action when the reason
21         for the action is based upon either of the following:
22                 (i) the business operations of the franchisee
23             have been abandoned or the franchisee has failed to
24             conduct customary sales and service operations
25             during customary business hours for at least 7
26             consecutive business days unless such closing is

 

 

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

 

 

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1         notice of proposed action shall include a detailed
2         statement setting forth the specific grounds for the
3         proposed action and shall state that the dealer has
4         only 30 days from receipt of the notice to file with
5         the Motor Vehicle Review Board a written protest
6         against the proposed action.
7             (C) Within 30 days from receipt of the notice under
8         subparagraphs (A) and (B), the franchisee may file with
9         the Board a written protest against the proposed
10         action.
11             When the protest has been timely filed, the Board
12         shall enter an order, fixing a date (within 60 days of
13         the date of the order), time, and place of a hearing on
14         the protest required under Sections 12 and 29 of this
15         Act, and send by certified mail, return receipt
16         requested, a copy of the order to the manufacturer that
17         filed the notice of intention of the proposed action
18         and to the protesting dealer or franchisee.
19             The manufacturer shall have the burden of proof to
20         establish that good cause exists to cancel or
21         terminate, or fail to extend or renew the franchise or
22         selling agreement of a motor vehicle dealer or
23         franchisee, and to change substantially or modify the
24         sales and service obligations or capital requirements
25         of a motor vehicle dealer as a condition to extending
26         or renewing the existing franchise or selling

 

 

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1         agreement. The determination whether good cause exists
2         to cancel, terminate, or refuse to renew or extend the
3         franchise or selling agreement, or to change or modify
4         the obligations of the dealer as a condition to offer
5         renewal, replacement, or succession shall be made by
6         the Board under subsection (d) of Section 12 of this
7         Act.
8             (D) Notwithstanding the terms, conditions, or
9         provisions of a franchise or selling agreement, the
10         following shall not constitute good cause for
11         cancelling or terminating or failing to extend or renew
12         the franchise or selling agreement: (i) the change of
13         ownership or executive management of the franchisee's
14         dealership; or (ii) the fact that the franchisee or
15         owner of an interest in the franchise owns, has an
16         investment in, participates in the management of, or
17         holds a license for the sale of the same or any other
18         line make of new motor vehicles.
19             Good cause shall exist to cancel, terminate or fail
20         to offer a renewal or replacement franchise or selling
21         agreement to all franchisees of a line make if the
22         manufacturer permanently discontinues the manufacture
23         or assembly of motor vehicles of such line make.
24             (E) The manufacturer may not cancel or terminate,
25         or fail to extend or renew a franchise or selling
26         agreement or change or modify the obligations of the

 

 

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1         franchisee as a condition to offering a renewal,
2         replacement, or succeeding franchise or selling
3         agreement before the hearing process is concluded as
4         prescribed by this Act, and thereafter, if the Board
5         determines that the manufacturer has failed to meet its
6         burden of proof and that good cause does not exist to
7         allow the proposed action; or
8         (7) notwithstanding the terms of any franchise
9     agreement, to fail to indemnify and hold harmless its
10     franchised dealers against any judgment or settlement for
11     damages, including, but not limited to, court costs, expert
12     witness fees, reasonable attorneys' fees of the new motor
13     vehicle dealer, and other expenses incurred in the
14     litigation, so long as such fees and costs are reasonable,
15     arising out of complaints, claims or lawsuits including,
16     but not limited to, strict liability, negligence,
17     misrepresentation, warranty (express or implied), or
18     recision of the sale as defined in Section 2-608 of the
19     Uniform Commercial Code, to the extent that the judgment or
20     settlement relates to the alleged defective or negligent
21     manufacture, assembly or design of new motor vehicles,
22     parts or accessories or other functions by the
23     manufacturer, beyond the control of the dealer; provided
24     that, in order to provide an adequate defense, the
25     manufacturer receives notice of the filing of a complaint,
26     claim, or lawsuit within 60 days after the filing; .

 

 

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1         (8) to require or otherwise coerce a motor vehicle
2     dealer to underutilize the motor vehicle dealer's
3     facilities by requiring or otherwise coercing the motor
4     vehicle dealer to exclude or remove from the motor vehicle
5     dealer's facilities operations for selling or servicing of
6     any vehicles for which the motor vehicle dealer has a
7     franchise agreement with another manufacturer,
8     distributor, wholesaler, distribution branch or division,
9     or officer, agent, or other representative thereof;
10     provided, however, that, in light of all existing
11     circumstances, (i) the motor vehicle dealer maintains a
12     reasonable line of credit for each make or line of new
13     motor vehicle, (ii) the new motor vehicle dealer remains in
14     compliance with any reasonable facilities requirements of
15     the manufacturer, (iii) no change is made in the principal
16     management of the new motor vehicle dealer, and (iv) the
17     addition of the make or line of new motor vehicles would be
18     reasonable. The reasonable facilities requirement set
19     forth in item (ii) of subsection (d)(8) shall not include
20     any requirement that a franchisee establish or maintain
21     exclusive facilities, personnel, or display space. Any
22     decision by a motor vehicle dealer to sell additional makes
23     or lines at the motor vehicle dealer's facility shall be
24     presumed to be reasonable, and the manufacturer shall have
25     the burden to overcome that presumption. A motor vehicle
26     dealer must provide a written notification of its intent to

 

 

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1     add a make or line of new motor vehicles to the
2     manufacturer. If the manufacturer does not respond to the
3     motor vehicle dealer, in writing, objecting to the addition
4     of the make or line within 60 days after the date that the
5     motor vehicle dealer sends the written notification, then
6     the manufacturer shall be deemed to have approved the
7     addition of the make or line; or
8         (9) to use or consider the performance of a motor
9     vehicle dealer relating to the sale of the manufacturer's,
10     distributor's, or wholesaler's vehicles or the motor
11     vehicle dealer's ability to satisfy any minimum sales or
12     market share quota or responsibility relating to the sale
13     of the manufacturer's, distributor's, or wholesaler's new
14     vehicles in determining:
15             (A) the motor vehicle dealer's eligibility to
16         purchase program, certified, or other used motor
17         vehicles from the manufacturer, distributor, or
18         wholesaler;
19             (B) the volume, type, or model of program,
20         certified, or other used motor vehicles that a motor
21         vehicle dealer is eligible to purchase from the
22         manufacturer, distributor, or wholesaler;
23             (C) the price of any program, certified, or other
24         used motor vehicle that the dealer is eligible to
25         purchase from the manufacturer, distributor, or
26         wholesaler; or

 

 

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1             (D) the availability or amount of any discount,
2         credit, rebate, or sales incentive that the dealer is
3         eligible to receive from the manufacturer,
4         distributor, or wholesaler for the purchase of any
5         program, certified, or other used motor vehicle
6         offered for sale by the manufacturer, distributor, or
7         wholesaler.
8     (e) It shall be deemed a violation for a manufacturer, a
9 distributor, a wholesaler, a distributor branch or division or
10 officer, agent or other representative thereof:
11         (1) to resort to or use any false or misleading
12     advertisement in connection with his business as such
13     manufacturer, distributor, wholesaler, distributor branch
14     or division or officer, agent or other representative
15     thereof;
16         (2) to offer to sell or lease, or to sell or lease, any
17     new motor vehicle to any motor vehicle dealer at a lower
18     actual price therefor than the actual price offered to any
19     other motor vehicle dealer for the same model vehicle
20     similarly equipped or to utilize any device including, but
21     not limited to, sales promotion plans or programs which
22     result in such lesser actual price or fail to make
23     available to any motor vehicle dealer any preferential
24     pricing, incentive, rebate, finance rate, or low interest
25     loan program offered to competing motor vehicle dealers in
26     other contiguous states. However, the provisions of this

 

 

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1     paragraph shall not apply to sales to a motor vehicle
2     dealer for resale to any unit of the United States
3     Government, the State or any of its political subdivisions;
4         (3) to offer to sell or lease, or to sell or lease, any
5     new motor vehicle to any person, except a wholesaler,
6     distributor or manufacturer's employees at a lower actual
7     price therefor than the actual price offered and charged to
8     a motor vehicle dealer for the same model vehicle similarly
9     equipped or to utilize any device which results in such
10     lesser actual price. However, the provisions of this
11     paragraph shall not apply to sales to a motor vehicle
12     dealer for resale to any unit of the United States
13     Government, the State or any of its political subdivisions;
14         (4) to prevent or attempt to prevent by contract or
15     otherwise any motor vehicle dealer or franchisee from
16     changing the executive management control of the motor
17     vehicle dealer or franchisee unless the franchiser, having
18     the burden of proof, proves that such change of executive
19     management will result in executive management control by a
20     person or persons who are not of good moral character or
21     who do not meet the franchiser's existing and, with
22     consideration given to the volume of sales and service of
23     the dealership, uniformly applied minimum business
24     experience standards in the market area. However where the
25     manufacturer rejects a proposed change in executive
26     management control, the manufacturer shall give written

 

 

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1     notice of his reasons to the dealer within 60 days of
2     notice to the manufacturer by the dealer of the proposed
3     change. If the manufacturer does not send a letter to the
4     franchisee by certified mail, return receipt requested,
5     within 60 days from receipt by the manufacturer of the
6     proposed change, then the change of the executive
7     management control of the franchisee shall be deemed
8     accepted as proposed by the franchisee, and the
9     manufacturer shall give immediate effect to such change;
10         (5) to prevent or attempt to prevent by contract or
11     otherwise any motor vehicle dealer from establishing or
12     changing the capital structure of his dealership or the
13     means by or through which he finances the operation
14     thereof; provided the dealer meets any reasonable capital
15     standards agreed to between the dealer and the
16     manufacturer, distributor or wholesaler, who may require
17     that the sources, method and manner by which the dealer
18     finances or intends to finance its operation, equipment or
19     facilities be fully disclosed;
20         (6) to refuse to give effect to or prevent or attempt
21     to prevent by contract or otherwise any motor vehicle
22     dealer or any officer, partner or stockholder of any motor
23     vehicle dealer from selling or transferring any part of the
24     interest of any of them to any other person or persons or
25     party or parties unless such sale or transfer is to a
26     transferee who would not otherwise qualify for a new motor

 

 

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

 

 

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

 

 

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1         approve the sale or transfer to the transferee.
2             (B) Good cause to refuse to approve such sale or
3         transfer under this Section is established when such
4         sale or transfer is to a transferee who would not
5         otherwise qualify for a new motor vehicle dealers
6         license under "The Illinois Vehicle Code" or such sale
7         or transfer is to a person or party who is not of good
8         moral character or does not meet the franchiser's
9         existing and reasonable capital standards and, with
10         consideration given to the volume of sales and service
11         of the dealership, uniformly applied minimum business
12         experience standards in the market area.
13         (7) to obtain money, goods, services, anything of
14     value, or any other benefit from any other person with whom
15     the motor vehicle dealer does business, on account of or in
16     relation to the transactions between the dealer and the
17     other person as compensation, except for services actually
18     rendered, unless such benefit is promptly accounted for and
19     transmitted to the motor vehicle dealer;
20         (8) to grant an additional franchise in the relevant
21     market area of an existing franchise of the same line make
22     or to relocate an existing motor vehicle dealership within
23     or into a relevant market area of an existing franchise of
24     the same line make. However, if the manufacturer wishes to
25     grant such an additional franchise to an independent person
26     in a bona fide relationship in which such person is

 

 

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1     prepared to make a significant investment subject to loss
2     in such a dealership, or if the manufacturer wishes to
3     relocate an existing motor vehicle dealership, then the
4     manufacturer shall send a letter by certified mail, return
5     receipt requested, to each existing dealer or dealers of
6     the same line make whose relevant market area includes the
7     proposed location of the additional or relocated franchise
8     at least 60 days before the manufacturer grants an
9     additional franchise or relocates an existing franchise of
10     the same line make within or into the relevant market area
11     of an existing franchisee of the same line make. Each
12     notice shall set forth the specific grounds for the
13     proposed grant of an additional or relocation of an
14     existing franchise and shall state that the dealer has only
15     30 days from the date of receipt of the notice to file with
16     the Motor Vehicle Review Board a written protest against
17     the proposed action. Unless the parties agree upon the
18     grant or establishment of the additional or relocated
19     franchise within 30 days from the date the notice was
20     received by the existing franchisee of the same line make
21     or any person entitled to receive such notice, the
22     franchisee or other person may file with the Board a
23     written protest against the grant or establishment of the
24     proposed additional or relocated franchise.
25         When a protest has been timely filed, the Board shall
26     enter an order fixing a date (within 60 days of the date of

 

 

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1     the order), time, and place of a hearing on the protest,
2     required under Sections 12 and 29 of this Act, and send by
3     certified or registered mail, return receipt requested, a
4     copy of the order to the manufacturer that filed the notice
5     of intention to grant or establish the proposed additional
6     or relocated franchise and to the protesting dealer or
7     dealers of the same line make whose relevant market area
8     includes the proposed location of the additional or
9     relocated franchise.
10         When more than one protest is filed against the grant
11     or establishment of the additional or relocated franchise
12     of the same line make, the Board may consolidate the
13     hearings to expedite disposition of the matter. The
14     manufacturer shall have the burden of proof to establish
15     that good cause exists to allow the grant or establishment
16     of the additional or relocated franchise. The manufacturer
17     may not grant or establish the additional franchise or
18     relocate the existing franchise before the hearing process
19     is concluded as prescribed by this Act, and thereafter if
20     the Board determines that the manufacturer has failed to
21     meet its burden of proof and that good cause does not exist
22     to allow the grant or establishment of the additional
23     franchise or relocation of the existing franchise.
24         The determination whether good cause exists for
25     allowing the grant or establishment of an additional
26     franchise or relocated existing franchise, shall be made by

 

 

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

 

 

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1         a population of more than 300,000 persons when the new
2         location is within the dealer's current relevant
3         market area, provided the new location is more than 7
4         miles from the nearest dealer of the same line make.
5         This Section does not apply to the relocation of an
6         existing dealership or franchise in a county having a
7         population of less than 300,000 persons when the new
8         location is within the dealer's current relevant
9         market area, provided the new location is more than 12
10         miles from the nearest dealer of the same line make. A
11         dealer that would be farther away from the new location
12         of an existing dealership or franchise of the same line
13         make after a relocation may not file a written protest
14         against the relocation with the Motor Vehicle Review
15         Board.
16             D. Nothing in this Section shall be construed to
17         prevent a franchiser from implementing affirmative
18         action programs providing business opportunities for
19         minorities or from complying with applicable federal,
20         State or local law;
21         (9) to require a motor vehicle dealer to assent to a
22     release, assignment, novation, waiver or estoppel which
23     would relieve any person from liability imposed by this
24     Act;
25         (10) to prevent or refuse to give effect to the
26     succession to the ownership or management control of a

 

 

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1     dealership by any legatee under the will of a dealer or to
2     an heir under the laws of descent and distribution of this
3     State unless the franchisee has designated a successor to
4     the ownership or management control under the succession
5     provisions of the franchise. Unless the franchiser, having
6     the burden of proof, proves that the successor is a person
7     who is not of good moral character or does not meet the
8     franchiser's existing and reasonable capital standards
9     and, with consideration given to the volume of sales and
10     service of the dealership, uniformly applied minimum
11     business experience standards in the market area, any
12     designated successor of a dealer or franchisee may succeed
13     to the ownership or management control of a dealership
14     under the existing franchise if:
15                 (i) The designated successor gives the
16             franchiser written notice by certified mail,
17             return receipt requested, of his or her intention
18             to succeed to the ownership of the dealer within 60
19             days of the dealer's death or incapacity; and
20                 (ii) The designated successor agrees to be
21             bound by all the terms and conditions of the
22             existing franchise.
23         Notwithstanding the foregoing, in the event the motor
24     vehicle dealer or franchisee and manufacturer have duly
25     executed an agreement concerning succession rights prior
26     to the dealer's death or incapacitation, the agreement

 

 

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1     shall be observed.
2             (A) If the franchiser intends to refuse to honor
3         the successor to the ownership of a deceased or
4         incapacitated dealer or franchisee under an existing
5         franchise agreement, the franchiser shall send a
6         letter by certified mail, return receipt requested, to
7         the designated successor within 60 days from receipt of
8         a proposal advising of its intent to refuse to honor
9         the succession and to discontinue the existing
10         franchise agreement and shall state that the
11         designated successor only has 30 days from the receipt
12         of the notice to file with the Motor Vehicle Review
13         Board a written protest against the proposed action.
14         The notice shall set forth the specific grounds for the
15         refusal to honor the succession and discontinue the
16         existing franchise agreement.
17             If notice of refusal is not timely served upon the
18         designated successor, the franchise agreement shall
19         continue in effect subject to termination only as
20         otherwise permitted by paragraph (6) of subsection (d)
21         of Section 4 of this Act.
22             Within 30 days from the date the notice was
23         received by the designated successor or any other
24         person entitled to notice, the designee or other person
25         may file with the Board a written protest against the
26         proposed action.

 

 

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

 

 

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1         control under the succession provisions of the
2         franchise, or that the designated successor is of good
3         moral character or meets the reasonable capital
4         standards and, with consideration given to the volume
5         of sales and service of the dealership, uniformly
6         applied minimum business experience standards in the
7         market area;
8         (11) to prevent or refuse to approve a proposal to
9     establish a successor franchise at a location previously
10     approved by the franchiser when submitted with the
11     voluntary termination by the existing franchisee unless
12     the successor franchisee would not otherwise qualify for a
13     new motor vehicle dealer's license under the Illinois
14     Vehicle Code or unless the franchiser, having the burden of
15     proof, proves that such proposed successor is not of good
16     moral character or does not meet the franchiser's existing
17     and reasonable capital standards and, with consideration
18     given to the volume of sales and service of the dealership,
19     uniformly applied minimum business experience standards in
20     the market area. However, when such a rejection of a
21     proposal is made, the manufacturer shall give written
22     notice of its reasons to the franchisee within 60 days of
23     receipt by the manufacturer of the proposal. However,
24     nothing herein shall be construed to prevent a franchiser
25     from implementing affirmative action programs providing
26     business opportunities for minorities, or from complying

 

 

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1     with applicable federal, State or local law;
2         (12) to prevent or refuse to grant a franchise to a
3     person because such person owns, has investment in or
4     participates in the management of or holds a franchise for
5     the sale of another make or line of motor vehicles within 7
6     miles of the proposed franchise location in a county having
7     a population of more than 300,000 persons, or within 12
8     miles of the proposed franchise location in a county having
9     a population of less than 300,000 persons; or
10         (13) to prevent or attempt to prevent any new motor
11     vehicle dealer from establishing any additional motor
12     vehicle dealership or other facility limited to the sale of
13     factory repurchase vehicles or late model vehicles or
14     otherwise offering for sale factory repurchase vehicles of
15     the same line make at an existing franchise by failing to
16     make available any contract, agreement or other
17     arrangement which is made available or otherwise offered to
18     any person.
19     (f) It is deemed a violation for a manufacturer, a
20 distributor, a wholesale, a distributor branch or division, a
21 factory branch or division, or a wholesale branch or division,
22 or officer, agent, broker, shareholder, except a shareholder of
23 1% or less of the outstanding shares of any class of securities
24 of a manufacturer, distributor, or wholesaler which is a
25 publicly traded corporation, or other representative, directly
26 or indirectly, to own or operate a place of business as a motor

 

 

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1 vehicle franchisee or motor vehicle financing affiliate,
2 except that, this subsection shall not prohibit the ownership
3 or operation of a place of business by a manufacturer,
4 distributor, or wholesaler for a period, not to exceed 18
5 months, during the transition from one motor vehicle franchisee
6 to another; or the investment in a motor vehicle franchisee by
7 a manufacturer, distributor, or wholesaler if the investment is
8 for the sole purpose of enabling a partner or shareholder in
9 that motor vehicle franchisee to acquire an interest in that
10 motor vehicle franchisee and that partner or shareholder is not
11 otherwise employed by or associated with the manufacturer,
12 distributor, or wholesaler and would not otherwise have the
13 requisite capital investment funds to invest in the motor
14 vehicle franchisee, and has the right to purchase the entire
15 equity interest of the manufacturer, distributor, or
16 wholesaler in the motor vehicle franchisee within a reasonable
17 period of time not to exceed 5 years.
18 (Source: P.A. 94-287, eff. 1-1-06.)
 
19     (815 ILCS 710/6)  (from Ch. 121 1/2, par. 756)
20     Sec. 6. Warranty agreements; claims; approval; payment;
21 written disapproval.
22     (a) Every manufacturer, distributor, wholesaler,
23 distributor branch or division, factory branch or division, or
24 wholesale branch or division shall properly fulfill any
25 warranty agreement and adequately and fairly compensate each of

 

 

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1 its motor vehicle dealers for labor and parts.
2     (b) In no event shall such compensation fail to include
3 reasonable compensation for diagnostic work, as well as repair
4 service, labor, and parts. Time allowances for the diagnosis
5 and performance of warranty work and service shall be
6 reasonable and adequate for the work to be performed. In the
7 determination of what constitutes reasonable compensation
8 under this Section, the principal factor to be given
9 consideration shall be the prevailing wage rates being paid by
10 the dealer in the relevant market area in which the motor
11 vehicle dealer is doing business, and in no event shall such
12 compensation of a motor vehicle dealer for warranty service be
13 less than the rates charged by such dealer for like service to
14 retail customers for nonwarranty service and repairs. The
15 franchiser shall reimburse the franchisee for any parts
16 provided in satisfaction of a warranty at the prevailing retail
17 price charged by that dealer for the same parts when not
18 provided in satisfaction of a warranty; provided that such
19 motor vehicle franchisee's prevailing retail price is not
20 unreasonable when compared with that of the holders of motor
21 vehicle franchises from the same motor vehicle franchiser for
22 identical merchandise in the geographic area in which the motor
23 vehicle franchisee is engaged in business. All claims, either
24 original or resubmitted, made by motor vehicle dealers
25 hereunder and under Section 5 for such labor and parts shall be
26 either approved or disapproved within 30 days following their

 

 

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1 submission. All approved claims shall be paid within 30 days
2 following their approval. The motor vehicle dealer who submits
3 a claim which is disapproved shall be notified in writing of
4 the disapproval within the same period, and each such notice
5 shall state the specific grounds upon which the disapproval is
6 based. The motor vehicle dealer shall be permitted to correct
7 and resubmit such disapproved claims within 30 days of receipt
8 of disapproval. Any claims not specifically disapproved in
9 writing within 30 days from their submission shall be deemed
10 approved and payment shall follow within 30 days. The
11 manufacturer or franchiser shall have the right to require
12 reasonable documentation for claims and to audit such claims
13 within a one year period from the date the claim was paid or
14 credit issued by the manufacturer or franchiser, and to charge
15 back any false or unsubstantiated claims. The audit and charge
16 back provisions of this Section also apply to all other
17 incentive and reimbursement programs for a period of one year
18 18 months after the date the claim was paid or credit issued by
19 the manufacturer or franchiser of the transactions that are
20 subject to audit by the franchiser. However, the manufacturer
21 retains the right to charge back any fraudulent claim if the
22 manufacturer establishes in a court of competent jurisdiction
23 in this State that the claim is fraudulent.
24     (c) The motor vehicle franchiser shall not, by agreement,
25 by restrictions upon reimbursement, or otherwise, restrict the
26 nature and extent of services to be rendered or parts to be

 

 

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1 provided so that such restriction prevents the motor vehicle
2 franchisee from satisfying the warranty by rendering services
3 in a good and workmanlike manner and providing parts which are
4 required in accordance with generally accepted standards. Any
5 such restriction shall constitute a prohibited practice.
6     (d) For the purposes of this Section, the "prevailing
7 retail price charged by that dealer for the same parts" means
8 the price paid by the motor vehicle franchisee for parts,
9 including all shipping and other charges, multiplied by the sum
10 of 1.0 and the franchisee's average percentage markup over the
11 price paid by the motor vehicle franchisee for parts purchased
12 by the motor vehicle franchisee from the motor vehicle
13 franchiser and sold at retail. The motor vehicle franchisee may
14 establish average percentage markup under this Section by
15 submitting to the motor vehicle franchiser 100 sequential
16 customer paid service repair orders or 90 days of customer paid
17 service repair orders, whichever is less, covering repairs made
18 no more than 180 days before the submission, and declaring what
19 the average percentage markup is. The average percentage markup
20 so declared shall go into effect 30 days following the
21 declaration, subject to audit of the submitted repair orders by
22 the motor vehicle franchiser and adjustment of the average
23 percentage markup based on that audit. Any audit must be
24 conducted within 30 days following the declaration. Only retail
25 sales not involving warranty repairs, parts covered by
26 subsection (e) of this Section, or parts supplied for routine

 

 

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1 vehicle maintenance, shall be considered in calculating
2 average percentage markup. No motor vehicle franchiser shall
3 require a motor vehicle franchisee to establish average
4 percentage markup by a methodology, or by requiring
5 information, that is unduly burdensome or time consuming to
6 provide, including, but not limited to, part by part or
7 transaction by transaction calculations. A motor vehicle
8 franchisee shall not request a change in the average percentage
9 markup more than twice in one calendar year.
10     (e) If a motor vehicle franchiser supplies a part or parts
11 for use in a repair rendered under a warranty other than by
12 sale of that part or parts to the motor vehicle franchisee, the
13 motor vehicle franchisee shall be entitled to compensation
14 equivalent to the motor vehicle franchisee's average
15 percentage markup on the part or parts, as if the part or parts
16 had been sold to the motor vehicle franchisee by the motor
17 vehicle franchiser. The requirements of this subsection (e)
18 shall not apply to entire engine assemblies and entire
19 transmission assemblies. In the case of those assemblies, the
20 motor vehicle franchiser shall reimburse the motor vehicle
21 franchisee in the amount of 30% of what the motor vehicle
22 franchisee would have paid the motor vehicle franchiser for the
23 assembly if the assembly had not been supplied by the
24 franchiser other than by the sale of that assembly to the motor
25 vehicle franchisee.
26     (f) The obligations imposed on motor vehicle franchisers by

 

 

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1 this Section shall apply to any parent, subsidiary, affiliate,
2 or agent of the motor vehicle franchiser, any person under
3 common ownership or control, any employee of the motor vehicle
4 franchiser, and any person holding 1% or more of the shares of
5 any class of securities or other ownership interest in the
6 motor vehicle franchiser, if a warranty or service or repair
7 plan is issued by that person instead of or in addition to one
8 issued by the motor vehicle franchiser.
9     (g) (1) Any motor vehicle franchiser and at least a
10 majority of its Illinois franchisees of the same line make may
11 agree in an express written contract citing this Section upon a
12 uniform warranty reimbursement policy used by contracting
13 franchisees to perform warranty repairs. The policy shall only
14 involve either reimbursement for parts used in warranty repairs
15 or the use of a Uniform Time Standards Manual, or both.
16 Reimbursement for parts under the agreement shall be used
17 instead of the franchisees' "prevailing retail price charged by
18 that dealer for the same parts" as defined in this Section to
19 calculate compensation due from the franchiser for parts used
20 in warranty repairs. This Section does not authorize a
21 franchiser and its Illinois franchisees to establish a uniform
22 hourly labor reimbursement.
23     Each franchiser shall only have one such agreement with
24 each line make. Any such agreement shall:
25         (A) Establish a uniform parts reimbursement rate. The
26     uniform parts reimbursement rate shall be greater than the

 

 

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1     franchiser's nationally established parts reimbursement
2     rate in effect at the time the first such agreement becomes
3     effective; however, any subsequent agreement shall result
4     in a uniform reimbursement rate that is greater or equal to
5     the rate set forth in the immediately prior agreement.
6         (B) Apply to all warranty repair orders written during
7     the period that the agreement is effective.
8         (C) Be available, during the period it is effective, to
9     any motor vehicle franchisee of the same line make at any
10     time and on the same terms.
11         (D) Be for a term not to exceed 3 years so long as any
12     party to the agreement may terminate the agreement upon the
13     annual anniversary of the agreement and with 30 days' prior
14     written notice; however, the agreement shall remain in
15     effect for the term of the agreement regardless of the
16     number of dealers of the same line make that may terminate
17     the agreement.
18     (2) A franchiser that enters into an agreement with its
19 franchisees pursuant to paragraph (1) of this subsection (g)
20 may seek to recover its costs from only those franchisees that
21 are receiving their "prevailing retail price charged by that
22 dealer" under subsections (a) through (f) of this Section,
23 subject to the following requirements:
24         (A) "costs" means the difference between the uniform
25     reimbursement rate set forth in an agreement entered into
26     pursuant to paragraph (1) of this subsection (g) and the

 

 

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1     "prevailing retail price charged by that dealer" received
2     by those franchisees of the same line make. "Costs" do not
3     include the following: legal fees or expenses;
4     administrative expenses; a profit mark-up; or any other
5     item;
6         (B) the costs shall be recovered only by increasing the
7     invoice price on new vehicles received by those
8     franchisees; and
9         (C) price increases imposed for the purpose of
10     recovering costs imposed by this Section may vary from time
11     to time and from model to model, but shall apply uniformly
12     to all franchisees of the same line make in the State of
13     Illinois that have requested reimbursement for warranty
14     repairs at their "prevailing retail price charged by that
15     dealer", except that a franchiser may make an exception for
16     vehicles that are titled in the name of a consumer in
17     another state.
18     (3) If a franchiser contracts with its Illinois dealers
19 pursuant to paragraph (1) of this subsection (g), the
20 franchiser shall certify under oath to the Motor Vehicle Review
21 Board that a majority of the franchisees of that line make did
22 agree to such an agreement and file a sample copy of the
23 agreement. On an annual basis, each franchiser shall certify
24 under oath to the Motor Vehicle Review Board that the
25 reimbursement costs it recovers under paragraph (2) of this
26 subsection (g) do not exceed the amounts authorized by

 

 

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1 paragraph (2) of this subsection (g). The franchiser shall
2 maintain for a period of 3 years a file that contains the
3 information upon which its certification is based.
4     (3.1) A franchiser subject to subdivision (g)(2) of this
5 Section, upon request of a dealer subject to that subdivision,
6 shall disclose to the dealer, in writing or in person if
7 requested by the dealer, the method by which the franchiser
8 calculated the amount of the costs to be reimbursed by the
9 dealer. The franchiser shall also provide aggregate data
10 showing (i) the total costs the franchiser incurred and (ii)
11 the total number of new vehicles invoiced to each dealer that
12 received the "prevailing retail price charged by that dealer"
13 during the relevant period of time. In responding to a dealer's
14 request under this subdivision (g)(3.1), a franchiser may not
15 disclose any confidential or competitive information regarding
16 any other dealer. Any dealer who receives information from a
17 franchiser under this subdivision (g)(3.1) may not disclose
18 that information to any third party unless the disclosure
19 occurs in the course of a lawful proceeding before, or upon the
20 order of, the Motor Vehicle Review Board or a court of
21 competent jurisdiction.
22     (4) If a franchiser and its franchisees do not enter into
23 an agreement pursuant to paragraph (1) of this subsection (g),
24 and for any matter that is not the subject of an agreement,
25 this subsection (g) shall have no effect whatsoever.
26     (5) For purposes of this subsection (g), a Uniform Time

 

 

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1 Standard Manual is a document created by a franchiser that
2 establishes the time allowances for the diagnosis and
3 performance of warranty work and service. The allowances shall
4 be reasonable and adequate for the work and service to be
5 performed. Each franchiser shall have a reasonable and fair
6 process that allows a franchisee to request a modification or
7 adjustment of a standard or standards included in such a
8 manual.
9     (6) A franchiser may not take any adverse action against a
10 franchisee for not having executed an agreement contemplated by
11 this subsection (g) or for receiving the "prevailing retail
12 price charged by that dealer". Nothing in this subsection shall
13 be construed to prevent a franchiser from making a
14 determination of a franchisee's "prevailing retail price
15 charged by that dealer", as provided by this Section.
16 (Source: P.A. 94-882, eff. 6-20-06.)
 
17     (815 ILCS 710/9)  (from Ch. 121 1/2, par. 759)
18     Sec. 9. Renewals; transfers.
19     (a) Anything to the contrary notwithstanding, it shall be
20 unlawful for the manufacturer, wholesaler, distributor or
21 franchiser without good cause, to fail to renew a franchise on
22 terms then equally available to all its motor vehicle dealers,
23 or to terminate a franchise or restrict the transfer of a
24 franchise until the franchisee shall receive fair and
25 reasonable compensation for the value of the business and

 

 

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1 business premises.
2     (b) For the purposes of this Section 9, the term
3 "reasonable compensation" includes, but is not limited to all
4 of the following items:
5         (1) An amount equal to the current, fair rental value
6     of the portion of the motor vehicle dealer's established
7     place of business that is used for motor vehicle sales and
8     service with the manufacturer, wholesaler, distributor or
9     franchiser for a period of one year beginning on the date
10     of the nonrenewal, termination, or restriction on the
11     transfer of the franchise.
12         (2) The franchisee's cost of each new undamaged and
13     unsold current and prior year motor vehicles that were
14     acquired within 12 months of termination and have 500 or
15     fewer miles recorded on the odometer that are in the
16     franchisee's inventory at the time of nonrenewal,
17     termination, or restriction and that were purchased or
18     acquired from the manufacturer or from another dealer of
19     the same line make in the ordinary course of business.
20         (3) The franchisee's cost of each new, unused,
21     undamaged, and unsold part or accessory that is in the
22     current parts catalogue or is identical to a part or
23     accessory in the current parts catalogue except for the
24     number assigned to the part or accessory due to a change in
25     the number after the purchase of the part or accessory and
26     that is still in the original, resalable merchandising

 

 

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1     package and in an unbroken lot, except that, in the case of
2     sheet metal, a comparable substitute for the original
3     package may be used if the part or accessory was purchased
4     (i) directly from the manufacturer, distributor,
5     wholesaler, distributor branch or division, or officer,
6     agent, or other representative thereof or (ii) from an
7     outgoing authorized dealer as a part of the dealer's
8     initial inventory.
9         (4) The fair market value of each undamaged sign owned
10     by the dealer that bears a trademark or trade name used or
11     claimed by the manufacturer, distributor, wholesaler,
12     distributor branch or division, or officer, agent, or other
13     representative thereof that was purchased as a requirement
14     of the manufacturer, distributor, wholesaler, distributor
15     branch or division, or officer, agent, or other
16     representative thereof.
17         (5) The fair market value of all special tools, data
18     processing equipment, and automotive service equipment
19     owned by the dealer that (i) were recommended in writing
20     and designated as special tools and equipment, (ii) were
21     purchased at the request of the manufacturer, distributor,
22     wholesaler, distributor branch or division, or officer,
23     agent, or other representative thereof, and (iii) are in
24     usable and good condition except for reasonable wear and
25     tear.
26         (6) The cost of transporting, handling, packing,

 

 

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1     storing, and loading any property that is subject to
2     repurchase under this Section.
3     This subsection (b) shall not apply to a non-renewal or
4 termination that is implemented as a result of a sale of the
5 assets or stock of the franchise.
6     (c) The payment under item (b)(1) is due in 12 equal,
7 monthly installments, beginning 30 days after the franchise is
8 terminated or nonrenewed. The payments under items (b)(2)
9 through (b)(6) are due no later than 90 days after the
10 franchise is terminated or nonrenewed. As a condition of
11 payment under items (b)(2) through (b)(6), the motor vehicle
12 dealer must comply with all reasonable requirements provided by
13 the manufacturer, distributor, or wholesaler regarding the
14 return of inventory.
15     If a manufacturer, distributor, or wholesaler does not
16 reimburse the motor vehicle dealer for the amounts required
17 under items (b)(2) through (b)(6) by the deadlines under this
18 subsection (c), and the Board or, if agreed to under Section
19 12, the arbitrator, finds the manufacturer, distributor, or
20 wholesaler in violation of this subsection, then the
21 manufacturer, distributor, or wholesaler shall, in addition to
22 any other amounts due, pay the motor vehicle dealer:
23         (1) interest on the amount due at a rate reasonable in
24     light of commercial practices, determined by the Board or
25     arbitrator; and
26         (2) reasonable attorney's fees and costs.

 

 

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1         (3) reasonable attorney's fees and costs.
2 (Source: P.A. 83-922.)
 
3     (815 ILCS 710/9.5 new)
4     Sec. 9.5. Termination with good cause.
5     (a) Anything to the contrary notwithstanding, if a
6 manufacturer, wholesaler, distributor, or franchiser, with
7 good cause, (i) fails to renew a franchise on terms then
8 equally available to all of its motor vehicle dealers, (ii)
9 terminates a franchise, or (iii) restricts the transfer of a
10 franchise, the manufacturer, wholesaler, distributor or
11 franchiser shall pay to the franchisee all of the following,
12 including, but not limited to:
13         (1) Upon termination, cancellation, or nonrenewal of a
14     line make or upon termination, cancellation, or nonrenewal
15     due to a dealer's poor sales and service performance
16     pursuant to notice provided under Section 4(d)(6), an
17     amount equal to the current, fair rental value of the
18     portion of the motor vehicle dealer's established place of
19     business that is used for motor vehicle sales and service
20     with the manufacturer, wholesaler, distributor or
21     franchiser for a period of one year beginning on the date
22     of the nonrenewal, termination, or restriction on the
23     transfer of the franchise.
24         (2) The franchisee's cost of each new undamaged and
25     unsold current and prior model year motor vehicles that

 

 

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1     were acquired within 12 months of termination and have 500
2     or fewer miles recorded on the odometer in the franchisee's
3     inventory at the time of nonrenewal, termination, or
4     restriction and that were purchased or acquired from the
5     manufacturer or from another motor vehicle dealer of the
6     same line make in the ordinary course of business.
7         (3) The franchisee's cost of each new, unused,
8     undamaged, and unsold part or accessory that is in the
9     current parts catalogue or is identical to a part or
10     accessory in the current parts catalogue except for a
11     number assigned to the part or accessory due to a change in
12     the number after the purchase of the part or accessory and
13     that is still in the original, resalable merchandising
14     package and in an unbroken lot, except that, in the case of
15     sheet metal, a comparable substitute for the original
16     package may be used if the part or accessory was purchased
17     (i) directly from the manufacturer, distributor,
18     wholesaler, distributor branch or division, or officer,
19     agent, or other representative thereof or (ii) from an
20     outgoing authorized dealer as a part of the dealer's
21     initial inventory.
22         (4) The fair market value of each undamaged sign owned
23     by the dealer that bears a trademark or trade name used or
24     claimed by the manufacturer, distributor, wholesaler,
25     distributor branch, or division, or officer, agent, or
26     other representative thereof that was purchased as a

 

 

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1     requirement of the manufacturer, distributor, wholesaler,
2     distributor branch, or division, or officer, agent, or
3     other representative thereof.
4         (5) The fair market value of all special tools, data
5     processing equipment, and automotive service equipment
6     owned by the dealer that (i) were recommended in writing
7     and designated as special tools and equipment, (ii) were
8     purchased at the request of the manufacturer, distributor,
9     wholesaler, distributor branch or division, or officer,
10     agent, or other representative thereof, and (iii) are in
11     usable and good condition except for reasonable wear and
12     tear.
13     (b) The payment under item (a)(1) is due in 12 equal,
14 monthly installments, beginning 30 days after the franchise is
15 terminated or nonrenewed. The payments under items (a)(2)
16 through (a)(5) are due no later than 90 days after the
17 franchise is terminated or nonrenewed. As a condition of
18 payment under items (a)(2) through (a)(5) the motor vehicle
19 dealer must comply with all reasonable requirements provided by
20 the manufacturer, distributor, or wholesaler regarding the
21 return of inventory.
22     If a manufacturer, distributor, or wholesaler does not
23 reimburse the motor vehicle dealer for the amounts required
24 under items (a)(2) through (a)(6) by the deadlines under this
25 subsection (b), then the manufacturer, distributor, or
26 wholesaler shall, in addition to any amounts due, pay the motor

 

 

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1 vehicle dealer:
2         (1) interest on the amount due at a rate reasonable in
3     light of commercial practices, determined by the Board or
4     arbitrator; and
5         (2) reasonable attorney's fees and costs.
6     (c) This Section does not apply to a termination or
7 nonrenewal that is implemented as a result of the sale of the
8 assets or stock of the franchise.
 
9     Section 99. Effective date. This Act takes effect upon
10 becoming law.