56:10-23 Factors for consideration if proposed franchise will harm public interest.

713 words·~3 min read·/nj/title-56/chapter-10/56-10-23

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

8. a. The grant, reopening or reactivation of a franchise or establishment, or the reopening or reactivation of a business shall be deemed injurious to existing franchisees or to the public interest unless the franchisor proves, by a preponderance of the evidence, that:

(1)The proposed franchise or business would materially enhance the availability of stable, adequate and reliable sales and service to purchasers of vehicles in the same line make in the market area served by the franchisees entitled to notice;

(2)The proposed franchise or business would not affect the stability of existing franchisees in the same line make;

(3)The existing franchisees in the same line make have not provided adequate representation of the line make in their market areas for a period of at least two years based on the availability of motor vehicle sales and service facilities, equipment, supply of motor vehicle parts and qualified service personnel;

(4)The franchisor's action is in good faith.

b. In determining whether the grant, relocation, reopening or reactivation of a franchise or establishment, relocation, reopening or reactivation of a business will be injurious to existing franchisees or to the public interest, it shall be conclusively presumed that the proposed grant, relocation, reopening or reactivation of the franchise or establishment, relocation, reopening or reactivation of the business will be injurious to existing franchisees or to the public interest if:

(1)for the 24-month period prior to notice pursuant to section 4 of P.L.1982, c.156 (C.56:10-19), the average market penetration of the franchisees given notice pursuant to section 4 of P.L.1982, c.156 (C.56:10-19), in the area of primary responsibility or territory assigned to such franchises, is at least equal to the average market penetration of all franchisees in the same line make in this State;

(2)the proposed franchise or business is likely to cause not less than a 25% reduction in new vehicle sales or not less than a 25% reduction in gross income for the protesting franchisee;

(3)the proposed franchise or business will not operate a full service franchise or business at the proposed location; or

(4)an owner or operator of the proposed franchise or business has engaged in materially unfair or deceptive business practices with respect to a motor vehicle franchise or business.

c. The presumption in subsection b. of this section shall not apply to the grant, reopening or reactivation of a franchise or to the establishment, reopening or reactivation of a business if the proposed franchisee is a minority or a woman. For the purposes of this subsection, "minority" means a person who is:

(1)Black, which is a person having origins in any of the black racial groups in Africa; or

(2)Hispanic, which is a person of Spanish or Portuguese culture with origins in Mexico, South or Central America, or the Caribbean Islands, regardless of race; or

(3)Asian American, which is a person having origins in any of the original peoples of the Far East, Southeast Asia, Indian Subcontinent, Hawaii, or the Pacific Islands; or

(4)American Indian or Alaskan native, which is a person having origins in any of the original peoples of North America.

d. In determining whether the relocation of an existing franchise or business will be injurious to existing franchisees or the public interest, the committee shall consider in making its determination, whether the franchisor has proven, by a preponderance of the evidence, that:

(1)The relocation would materially enhance the availability of stable, adequate and reliable sales and service to purchasers of vehicles in the same line make in the market areas served by the franchisees entitled to notice;

(2)The relocation would not affect the stability of the existing franchises in the same line make;

(4)The relocation is in good faith; and

(5)The effect on the relocating dealer of the denial of its relocation outweighs the injury to an existing franchisee.

L.1982, c.156, s.8; amended 1993, c.189, s.2; 1999, c.45, s.4; 2011, c.66, s.11.