Sec. 45.25.110. Termination of franchise agreements.

401 words·~2 min read·/ak/title-45/chapter-25/45-25-110

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(a)A manufacturer may not terminate a franchise agreement with a new motor vehicle dealer unless

(1)the manufacturer has

(A)complied with the notice requirements of this chapter; and

(B)shown that there is good cause for the termination of the franchise agreement, and, if the reasons underlying the good cause can be corrected by the new motor vehicle dealer, the new motor vehicle dealer has failed for 120 days after delivery of the notice required by AS 45.25.120 to make the corrections; the circumstances identified under AS 45.25.120 (a)(2) for which a 15-day notice of termination is required do not qualify as reasons for which correction is allowed under this subparagraph; or

(2)the new motor vehicle dealer has systematically engaged in fraud against consumers or the manufacturer or in the operation of the new motor vehicle dealership.

(b)Notwithstanding (a)(1) of this section, a manufacturer may not terminate a franchise agreement with a new motor vehicle dealer because of the death or incapacity of an owner if the owner is not listed in the franchise as one on whose expertise and abilities the manufacturer relied in the granting of the franchise.

(c)A failure of a new motor vehicle dealer under

(a)of this section that relates to the performance of the new motor vehicle dealer in sales, service, or level of customer satisfaction does not amount to good cause under this section if the new motor vehicle dealer failed to comply and the failure to comply was caused by

(1)an insufficient supply of new motor vehicles; or

(2)market, economic, or other factors that exist within the new motor vehicle dealer's relevant market area and that were beyond the control of the new motor vehicle dealer.

(d)In this section, “good cause” includes when the new motor vehicle dealer fails to comply with or observe a material provision of the franchise agreement. For the purposes of determining good cause under this subsection, reasonable sales and service performance criteria and capital and facility requirements may be considered material provisions only if the criteria or requirements were communicated in writing to the new motor vehicle dealer within a reasonable period before the effective date of the termination or nonrenewal so that a reasonable opportunity was afforded over a period of not less than six months to comply with the criteria or requirements.