[§437-54] Transfer of franchise to successor who is not a qualified purchaser.

353 words·~2 min read·/hi/chapter-437/437-54

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

(a)A manufacturer or distributor shall not refuse or fail to give effect, unless it has good cause, to the dealer's designated successor, whether designated by will, other estate planning document, or written notice to the manufacturer or distributor either while the dealer was living or within ninety days of the dealer's death or incapacity.

(b)In determining whether good cause exists for the manufacturer's or distributor's refusal to honor the succession, the manufacturer or distributor shall have the burden to prove that the successor is not of good moral character, is not willing to be bound by the terms of the franchise agreement, and is either not qualified to operate the dealership or fails to demonstrate that the dealership will be operated by a qualified executive manager.

(c)The designated successor shall furnish written notice to the manufacturer or distributor including all necessary application forms and related information customarily required by the manufacturer or distributor of the successor's intention to succeed to the ownership of the new motor vehicle dealership within sixty days prior to the designee's actual proposed succession to dealership ownership for the manufacturer or distributor to determine whether the proposed successor meets the normal, reasonable, and uniformly applied standards for the grant of an application as a new motor vehicle dealer.

(d)The manufacturer or distributor shall notify the proposed successor of its belief that good cause exists to refuse to honor the succession within sixty days after receipt of the notice of the proposed successor's intent to succeed the franchise, and the manufacturer or distributor shall detail its reasons why it believes good cause exists to deny the succession.

(e)A proposed successor may file a petition in the manner prescribed in section 437-51 within sixty days after receipt of the manufacturer's or distributor's notice of refusal to honor the succession. The franchise shall continue, and the manufacturer or distributor is prohibited from any action to the contrary, until a final judgment has been rendered on the proposed succession. [L 2010, c 164, pt of §2]