(815 ILCS 710/4)
(from Ch. 121 1/2, par. 754)
Sec. 4.
Unfair competition and practices.
(a) The unfair methods of competition and unfair and deceptive acts or
practices listed in this Section are hereby declared to be unlawful. In
construing the provisions of this Section, the courts may be guided by the
interpretations of the Federal Trade Commission Act (15 U.S.C. 45 et
seq.), as from time to time amended.
(b) It shall be deemed a violation for any manufacturer, factory branch,
factory representative, distributor or wholesaler, distributor branch,
distributor representative or motor vehicle dealer to engage in any action
with respect to a franchise which is arbitrary, in bad faith or
unconscionable and which causes damage to any of the parties or to the public.
(c) It shall be deemed a violation for a manufacturer, a distributor,
a wholesaler, a distributor branch or division, a factory branch or division,
or a wholesale branch or division, or officer, agent or other representative
thereof, to coerce, or attempt to coerce, any motor vehicle dealer:
(1) to accept, buy or order any motor vehicle or
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vehicles, appliances, equipment, parts or accessories therefor, or any other commodity or commodities or service or services which such motor vehicle dealer has not voluntarily ordered or requested except items required by applicable local, state or federal law; or to require a motor vehicle dealer to accept, buy, order or purchase such items in order to obtain any motor vehicle or vehicles or any other commodity or commodities which have been ordered or requested by such motor vehicle dealer;
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(2) to order or accept delivery of any motor vehicle
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with special features, appliances, accessories or equipment not included in the list price of the motor vehicles as publicly advertised by the manufacturer thereof, except items required by applicable law; or
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(3) to order for anyone any parts, accessories,
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equipment, machinery, tools, appliances or any commodity whatsoever, except items required by applicable law.
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(d) It shall be deemed a violation for a manufacturer, a distributor,
a wholesaler, a distributor branch or division, or officer, agent or other
representative thereof:
(1) to adopt, change, establish or implement a plan
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or system for the allocation and distribution of new motor vehicles to motor vehicle dealers which is arbitrary or capricious or to modify an existing plan so as to cause the same to be arbitrary or capricious;
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(2) to fail or refuse to advise or disclose to any
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motor vehicle dealer having a franchise or selling agreement, upon written request therefor, the basis upon which new motor vehicles of the same line make are allocated or distributed to motor vehicle dealers in the State and the basis upon which the current allocation or distribution is being made or will be made to such motor vehicle dealer;
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(3) to refuse to deliver in reasonable quantities
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and within a reasonable time after receipt of dealer's order, to any motor vehicle dealer having a franchise or selling agreement for the retail sale of new motor vehicles sold or distributed by such manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division or wholesale branch or division, any such motor vehicles as are covered by such franchise or selling agreement specifically publicly advertised in the State by such manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division to be available for immediate delivery. However, the failure to deliver any motor vehicle shall not be considered a violation of this Act if such failure is due to an act of God, a work stoppage or delay due to a strike or labor difficulty, a shortage of materials, a lack of manufacturing capacity, a freight embargo or other cause over which the manufacturer, distributor, or wholesaler, or any agent thereof has no control;
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(4) to coerce, or attempt to coerce, any motor
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vehicle dealer to enter into any agreement with such manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division, or officer, agent or other representative thereof, or to do any other act prejudicial to the dealer by threatening to reduce his allocation of motor vehicles or cancel any franchise or any selling agreement existing between such manufacturer, distributor, wholesaler, distributor branch or division, or factory branch or division, or wholesale branch or division, and the dealer. However, notice in good faith to any motor vehicle dealer of the dealer's violation of any terms or provisions of such franchise or selling agreement or of any law or regulation applicable to the conduct of a motor vehicle dealer shall not constitute a violation of this Act;
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(5) to require a franchisee to participate in an
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advertising campaign or contest or any promotional campaign, or to purchase or lease any promotional materials, training materials, show room or other display decorations or materials at the expense of the franchisee;
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(6) to cancel or terminate the franchise or selling
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agreement of a motor vehicle dealer without good cause and without giving notice as hereinafter provided; to fail or refuse to extend the franchise or selling agreement of a motor vehicle dealer upon its expiration without good cause and without giving notice as hereinafter provided; or, to offer a renewal, replacement or succeeding franchise or selling agreement containing terms and provisions the effect of which is to substantially change or modify the sales and service obligations or capital requirements of the motor vehicle dealer arbitrarily and without good cause and without giving notice as hereinafter provided notwithstanding any term or provision of a franchise or selling agreement.
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(A) If a manufacturer, distributor, wholesaler,
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distributor branch or division, factory branch or division or wholesale branch or division intends to cancel or terminate a franchise or selling agreement or intends not to extend or renew a franchise or selling agreement on its expiration, it shall send a letter by certified mail, return receipt requested, to the affected franchisee at least 60 days before the effective date of the proposed action, or not later than 10 days before the proposed action when the reason for the action is based upon either of the following:
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(i) the business operations of the
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franchisee have been abandoned or the franchisee has failed to conduct customary sales and service operations during customary business hours for at least 7 consecutive business days unless such closing is due to an act of God, strike or labor difficulty or other cause over which the franchisee has no control; or
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(ii) the conviction of or plea of nolo
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contendere by the motor vehicle dealer or any operator thereof in a court of competent jurisdiction to an offense punishable by imprisonment for more than two years.
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Each notice of proposed action shall include a
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detailed statement setting forth the specific grounds for the proposed cancellation, termination, or refusal to extend or renew and shall state that the dealer has only 30 days from receipt of the notice to file with the Motor Vehicle Review Board a written protest against the proposed action.
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(B) If a manufacturer, distributor, wholesaler,
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distributor branch or division, factory branch or division or wholesale branch or division intends to change substantially or modify the sales and service obligations or capital requirements of a motor vehicle dealer as a condition to extending or renewing the existing franchise or selling agreement of such motor vehicle dealer, it shall send a letter by certified mail, return receipt requested, to the affected franchisee at least 60 days before the date of expiration of the franchise or selling agreement. Each notice of proposed action shall include a detailed statement setting forth the specific grounds for the proposed action and shall state that the dealer has only 30 days from receipt of the notice to file with the Motor Vehicle Review Board a written protest against the proposed action.
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(C) Within 30 days from receipt of the notice
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under subparagraphs (A) and (B), the franchisee may file with the Board a written protest against the proposed action.
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When the protest has been timely filed, the
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Board shall enter an order, fixing a date (within 60 days of the date of the order), time, and place of a hearing on the protest required under Sections 12 and 29 of this Act, and send by certified mail, return receipt requested, a copy of the order to the manufacturer that filed the notice of intention of the proposed action and to the protesting dealer or franchisee.
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The manufacturer shall have the burden of proof
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to establish that good cause exists to cancel or terminate, or fail to extend or renew the franchise or selling agreement of a motor vehicle dealer or franchisee, and to change substantially or modify the sales and service obligations or capital requirements of a motor vehicle dealer as a condition to extending or renewing the existing franchise or selling agreement. The determination whether good cause exists to cancel, terminate, or refuse to renew or extend the franchise or selling agreement, or to change or modify the obligations of the dealer as a condition to offer renewal, replacement, or succession shall be made by the Board under subsection (d) of Section 12 of this Act.
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(D) Notwithstanding the terms, conditions, or
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provisions of a franchise or selling agreement, the following shall not constitute good cause for cancelling or terminating or failing to extend or renew the franchise or selling agreement: (i) the change of ownership or executive management of the franchisee's dealership; or (ii) the fact that the franchisee or owner of an interest in the franchise owns, has an investment in, participates in the management of, or holds a license for the sale of the same or any other line make of new motor vehicles.
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Good cause shall exist to cancel, terminate or
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fail to offer a renewal or replacement franchise or selling agreement to all franchisees of a line make if the manufacturer permanently discontinues the manufacture or assembly of motor vehicles of such line make.
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(E) The manufacturer may not cancel or
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terminate, or fail to extend or renew a franchise or selling agreement or change or modify the obligations of the franchisee as a condition to offering a renewal, replacement, or succeeding franchise or selling agreement before the hearing process is concluded as prescribed by this Act, and thereafter, if the Board determines that the manufacturer has failed to meet its burden of proof and that good cause does not exist to allow the proposed action; or
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(7) notwithstanding the terms of any franchise
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agreement, to fail to indemnify and hold harmless its franchised dealers against any judgment or settlement for damages, including, but not limited to, court costs, expert witness fees, reasonable attorneys' fees of the new motor vehicle dealer, and other expenses incurred in the litigation, so long as such fees and costs are reasonable, arising out of complaints, claims or lawsuits including, but not limited to, strict liability, negligence, misrepresentation, warranty (express or implied), or recision of the sale as defined in Section 2‑608 of the Uniform Commercial Code, to the extent that the judgment or settlement relates to the alleged defective or negligent manufacture, assembly or design of new motor vehicles, parts or accessories or other functions by the manufacturer, beyond the control of the dealer; provided that, in order to provide an adequate defense, the manufacturer receives notice of the filing of a complaint, claim, or lawsuit within 60 days after the filing.
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(e) It shall be deemed a violation for a manufacturer, a distributor,
a wholesaler, a distributor branch or division or officer, agent or other
representative thereof:
(1) to resort to or use any false or misleading
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advertisement in connection with his business as such manufacturer, distributor, wholesaler, distributor branch or division or officer, agent or other representative thereof;
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(2) to offer to sell or lease, or to sell or lease,
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any new motor vehicle to any motor vehicle dealer at a lower actual price therefor than the actual price offered to any other motor vehicle dealer for the same model vehicle similarly equipped or to utilize any device including, but not limited to, sales promotion plans or programs which result in such lesser actual price or fail to make available to any motor vehicle dealer any preferential pricing, incentive, rebate, finance rate, or low interest loan program offered to competing motor vehicle dealers in other contiguous states. However, the provisions of this paragraph shall not apply to sales to a motor vehicle dealer for resale to any unit of the United States Government, the State or any of its political subdivisions;
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(3) to offer to sell or lease, or to sell or lease,
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any new motor vehicle to any person, except a wholesaler, distributor or manufacturer's employees at a lower actual price therefor than the actual price offered and charged to a motor vehicle dealer for the same model vehicle similarly equipped or to utilize any device which results in such lesser actual price. However, the provisions of this paragraph shall not apply to sales to a motor vehicle dealer for resale to any unit of the United States Government, the State or any of its political subdivisions;
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(4) to prevent or attempt to prevent by contract or
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otherwise any motor vehicle dealer or franchisee from changing the executive management control of the motor vehicle dealer or franchisee unless the franchiser, having the burden of proof, proves that such change of executive management will result in executive management control by a person or persons who are not of good moral character or who do not meet the franchiser's existing and, with consideration given to the volume of sales and service of the dealership, uniformly applied minimum business experience standards in the market area. However where the manufacturer rejects a proposed change in executive management control, the manufacturer shall give written notice of his reasons to the dealer within 60 days of notice to the manufacturer by the dealer of the proposed change. If the manufacturer does not send a letter to the franchisee by certified mail, return receipt requested, within 60 days from receipt by the manufacturer of the proposed change, then the change of the executive management control of the franchisee shall be deemed accepted as proposed by the franchisee, and the manufacturer shall give immediate effect to such change;
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(5) to prevent or attempt to prevent by contract or
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otherwise any motor vehicle dealer from establishing or changing the capital structure of his dealership or the means by or through which he finances the operation thereof; provided the dealer meets any reasonable capital standards agreed to between the dealer and the manufacturer, distributor or wholesaler, who may require that the sources, method and manner by which the dealer finances or intends to finance its operation, equipment or facilities be fully disclosed;
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(6) to refuse to give effect to or prevent or
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attempt to prevent by contract or otherwise any motor vehicle dealer or any officer, partner or stockholder of any motor vehicle dealer from selling or transferring any part of the interest of any of them to any other person or persons or party or parties unless such sale or transfer is to a transferee who would not otherwise qualify for a new motor vehicle dealers license under "The Illinois Vehicle Code" or unless the franchiser, having the burden of proof, proves that such sale or transfer is to a person or party who is not of good moral character or does not meet the franchiser's existing and reasonable capital standards and, with consideration given to the volume of sales and service of the dealership, uniformly applied minimum business experience standards in the market area. However, nothing herein shall be construed to prevent a franchiser from implementing affirmative action programs providing business opportunities for minorities or from complying with applicable federal, State or local law:
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(A) If the manufacturer intends to refuse to
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approve the sale or transfer of all or a part of the interest, then it shall, within 60 days from receipt of the completed application forms generally utilized by a manufacturer to conduct its review and a copy of all agreements regarding the proposed transfer, send a letter by certified mail, return receipt requested, advising the franchisee of any refusal to approve the sale or transfer of all or part of the interest and shall state that the dealer only has 30 days from the receipt of the notice to file with the Motor Vehicle Review Board a written protest against the proposed action. The notice shall set forth specific criteria used to evaluate the prospective transferee and the grounds for refusing to approve the sale or transfer to that transferee. Within 30 days from the franchisee's receipt of the manufacturer's notice, the franchisee may file with the Board a written protest against the proposed action.
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When a protest has been timely filed, the Board
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shall enter an order, fixing the date (within 60 days of the date of such order), time, and place of a hearing on the protest, required under Sections 12 and 29 of this Act, and send by certified mail, return receipt requested, a copy of the order to the manufacturer that filed notice of intention of the proposed action and to the protesting franchisee.
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The manufacturer shall have the burden of proof
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to establish that good cause exists to refuse to approve the sale or transfer to the transferee. The determination whether good cause exists to refuse to approve the sale or transfer shall be made by the Board under subdivisions (6)(B). The manufacturer shall not refuse to approve the sale or transfer by a dealer or an officer, partner, or stockholder of a franchise or any part of the interest to any person or persons before the hearing process is concluded as prescribed by this Act, and thereafter if the Board determines that the manufacturer has failed to meet its burden of proof and that good cause does not exist to refuse to approve the sale or transfer to the transferee.
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(B) Good cause to refuse to approve such sale or
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transfer under this Section is established when such sale or transfer is to a transferee who would not otherwise qualify for a new motor vehicle dealers license under "The Illinois Vehicle Code" or such sale or transfer is to a person or party who is not of good moral character or does not meet the franchiser's existing and reasonable capital standards and, with consideration given to the volume of sales and service of the dealership, uniformly applied minimum business experience standards in the market area.
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(7) to obtain money, goods, services, anything of
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value, or any other benefit from any other person with whom the motor vehicle dealer does business, on account of or in relation to the transactions between the dealer and the other person as compensation, except for services actually rendered, unless such benefit is promptly accounted for and transmitted to the motor vehicle dealer;
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(8) to grant an additional franchise in the relevant
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market area of an existing franchise of the same line make or to relocate an existing motor vehicle dealership within or into a relevant market area of an existing franchise of the same line make. However, if the manufacturer wishes to grant such an additional franchise to an independent person in a bona fide relationship in which such person is prepared to make a significant investment subject to loss in such a dealership, or if the manufacturer wishes to relocate an existing motor vehicle dealership, then the manufacturer shall send a letter by certified mail, return receipt requested, to each existing dealer or dealers of the same line make whose relevant market area includes the proposed location of the additional or relocated franchise at least 60 days before the manufacturer grants an additional franchise or relocates an existing franchise of the same line make within or into the relevant market area of an existing franchisee of the same line make. Each notice shall set forth the specific grounds for the proposed grant of an additional or relocation of an existing franchise and shall state that the dealer has only 30 days from the date of receipt of the notice to file with the Motor Vehicle Review Board a written protest against the proposed action. Unless the parties agree upon the grant or establishment of the additional or relocated franchise within 30 days from the date the notice was received by the existing franchisee of the same line make or any person entitled to receive such notice, the franchisee or other person may file with the Board a written protest against the grant or establishment of the proposed additional or relocated franchise.
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When a protest has been timely filed, the Board
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shall enter an order fixing a date (within 60 days of the date of the order), time, and place of a hearing on the protest, required under Sections 12 and 29 of this Act, and send by certified or registered mail, return receipt requested, a copy of the order to the manufacturer that filed the notice of intention to grant or establish the proposed additional or relocated franchise and to the protesting dealer or dealers of the same line make whose relevant market area includes the proposed location of the additional or relocated franchise.
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When more than one protest is filed against the
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grant or establishment of the additional or relocated franchise of the same line make, the Board may consolidate the hearings to expedite disposition of the matter. The manufacturer shall have the burden of proof to establish that good cause exists to allow the grant or establishment of the additional or relocated franchise. The manufacturer may not grant or establish the additional franchise or relocate the existing franchise before the hearing process is concluded as prescribed by this Act, and thereafter if the Board determines that the manufacturer has failed to meet its burden of proof and that good cause does not exist to allow the grant or establishment of the additional franchise or relocation of the existing franchise.
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The determination whether good cause exists for
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allowing the grant or establishment of an additional franchise or relocated existing franchise, shall be made by the Board under subsection (c) of Section 12 of this Act. If the manufacturer seeks to enter into a contract, agreement or other arrangement with any person, establishing any additional motor vehicle dealership or other facility, limited to the sale of factory repurchase vehicles or late model vehicles, then the manufacturer shall follow the notice procedures set forth in this Section and the determination whether good cause exists for allowing the proposed agreement shall be made by the Board under subsection (c) of Section 12, with the manufacturer having the burden of proof.
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A. (Blank).
B. For the purposes of this Section, appointment
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of a successor motor vehicle dealer at the same location as its predecessor, or within 2 miles of such location, or the relocation of an existing dealer or franchise within 2 miles of the relocating dealer's or franchisee's existing location, shall not be construed as a grant, establishment or the entering into of an additional franchise or selling agreement, or a relocation of an existing franchise. The reopening of a motor vehicle dealership that has not been in operation for 18 months or more shall be deemed the grant of an additional franchise or selling agreement.
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C. This Section does not apply to the relocation
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of an existing dealership or franchise in a county having a population of more than 300,000 persons when the new location is within the dealer's current relevant market area, provided the new location is more than 7 miles from the nearest dealer of the same line make. This Section does not apply to the relocation of an existing dealership or franchise in a county having a population of less than 300,000 persons when the new location is within the dealer's current relevant market area, provided the new location is more than 12 miles from the nearest dealer of the same line make. A dealer that would be farther away from the new location of an existing dealership or franchise of the same line make after a relocation may not file a written protest against the relocation with the Motor Vehicle Review Board.
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D. Nothing in this Section shall be construed to
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prevent a franchiser from implementing affirmative action programs providing business opportunities for minorities or from complying with applicable federal, State or local law;
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(9) to require a motor vehicle dealer to assent to a
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release, assignment, novation, waiver or estoppel which would relieve any person from liability imposed by this Act;
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(10) to prevent or refuse to give effect to the
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succession to the ownership or management control of a dealership by any legatee under the will of a dealer or to an heir under the laws of descent and distribution of this State unless the franchisee has designated a successor to the ownership or management control under the succession provisions of the franchise. Unless the franchiser, having the burden of proof, proves that the successor is a person who is not of good moral character or does not meet the franchiser's existing and reasonable capital standards and, with consideration given to the volume of sales and service of the dealership, uniformly applied minimum business experience standards in the market area, any designated successor of a dealer or franchisee may succeed to the ownership or management control of a dealership under the existing franchise if:
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(i) The designated successor gives the
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franchiser written notice by certified mail, return receipt requested, of his or her intention to succeed to the ownership of the dealer within 60 days of the dealer's death or incapacity; and
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(ii) The designated successor agrees to be
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bound by all the terms and conditions of the existing franchise.
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Notwithstanding the foregoing, in the event the
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motor vehicle dealer or franchisee and manufacturer have duly executed an agreement concerning succession rights prior to the dealer's death or incapacitation, the agreement shall be observed.
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(A) If the franchiser intends to refuse to honor
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the successor to the ownership of a deceased or incapacitated dealer or franchisee under an existing franchise agreement, the franchiser shall send a letter by certified mail, return receipt requested, to the designated successor within 60 days from receipt of a proposal advising of its intent to refuse to honor the succession and to discontinue the existing franchise agreement and shall state that the designated successor only has 30 days from the receipt of the notice to file with the Motor Vehicle Review Board a written protest against the proposed action. The notice shall set forth the specific grounds for the refusal to honor the succession and discontinue the existing franchise agreement.
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If notice of refusal is not timely served upon
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the designated successor, the franchise agreement shall continue in effect subject to termination only as otherwise permitted by paragraph (6) of subsection (d) of Section 4 of this Act.
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Within 30 days from the date the notice was
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received by the designated successor or any other person entitled to notice, the designee or other person may file with the Board a written protest against the proposed action.
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When a protest has been timely filed, the Board
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shall enter an order, fixing a date (within 60 days of the date of the order), time, and place of a hearing on the protest, required under Sections 12 and 29 of this Act, and send by certified mail, return receipt requested, a copy of the order to the franchiser that filed the notice of intention of the proposed action and to the protesting designee or such other person.
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The manufacturer shall have the burden of proof
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to establish that good cause exists to refuse to honor the succession and discontinue the existing franchise agreement. The determination whether good cause exists to refuse to honor the succession shall be made by the Board under subdivision (B) of this paragraph (10). The manufacturer shall not refuse to honor the succession or discontinue the existing franchise agreement before the hearing process is concluded as prescribed by this Act, and thereafter if the Board determines that it has failed to meet its burden of proof and that good cause does not exist to refuse to honor the succession and discontinue the existing franchise agreement.
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(B) No manufacturer shall impose any conditions
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upon honoring the succession and continuing the existing franchise agreement with the designated successor other than that the franchisee has designated a successor to the ownership or management control under the succession provisions of the franchise, or that the designated successor is of good moral character or meets the reasonable capital standards and, with consideration given to the volume of sales and service of the dealership, uniformly applied minimum business experience standards in the market area;
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(11) to prevent or refuse to approve a proposal to
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establish a successor franchise at a location previously approved by the franchiser when submitted with the voluntary termination by the existing franchisee unless the successor franchisee would not otherwise qualify for a new motor vehicle dealer's license under the Illinois Vehicle Code or unless the franchiser, having the burden of proof, proves that such proposed successor is not of good moral character or does not meet the franchiser's existing and reasonable capital standards and, with consideration given to the volume of sales and service of the dealership, uniformly applied minimum business experience standards in the market area. However, when such a rejection of a proposal is made, the manufacturer shall give written notice of its reasons to the franchisee within 60 days of receipt by the manufacturer of the proposal. However, nothing herein shall be construed to prevent a franchiser from implementing affirmative action programs providing business opportunities for minorities, or from complying with applicable federal, State or local law;
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(12) to prevent or refuse to grant a franchise to a
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person because such person owns, has investment in or participates in the management of or holds a franchise for the sale of another make or line of motor vehicles within 7 miles of the proposed franchise location in a county having a population of more than 300,000 persons, or within 12 miles of the proposed franchise location in a county having a population of less than 300,000 persons; or
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(13) to prevent or attempt to prevent any new motor
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vehicle dealer from establishing any additional motor vehicle dealership or other facility limited to the sale of factory repurchase vehicles or late model vehicles or otherwise offering for sale factory repurchase vehicles of the same line make at an existing franchise by failing to make available any contract, agreement or other arrangement which is made available or otherwise offered to any person.
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(f) It is deemed a violation for a manufacturer, a distributor, a
wholesale,
a distributor
branch or division, a factory branch or division, or a wholesale branch or
division, or
officer, agent, broker, shareholder, except a shareholder of 1% or less of the
outstanding
shares of any class of securities of a manufacturer, distributor, or wholesaler
which is a
publicly traded corporation, or other representative, directly or indirectly,
to own or
operate a place of business as a motor vehicle franchisee or motor vehicle
financing
affiliate, except that, this subsection shall not prohibit the ownership or
operation of a
place of business by a manufacturer, distributor, or wholesaler for a period,
not to exceed
18 months, during the transition from one motor vehicle franchisee to another;
or the
investment in a motor vehicle franchisee by a manufacturer, distributor, or
wholesaler if
the investment is for the sole purpose of enabling a partner or shareholder in
that motor
vehicle franchisee to acquire an interest in that motor vehicle franchisee and
that partner
or shareholder is not otherwise employed by or associated with the
manufacturer,
distributor, or wholesaler and would not otherwise have the requisite capital
investment
funds to invest in the motor vehicle franchisee, and has the right to purchase
the entire
equity interest of the manufacturer, distributor, or wholesaler in the motor
vehicle
franchisee within a reasonable period of time not to exceed 5 years.
(Source: P.A. 94‑287, eff. 1‑1‑06.)
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(815 ILCS 710/12) (from Ch. 121 1/2, par. 762)
Sec. 12.
Arbitration; administrative proceedings; civil actions;
determining good cause.
(a) The franchiser and franchisee may agree to submit a dispute
involving
Section 4, 5, 6, 7, 9, 10.1, or 11
to
arbitration. Any such proceeding shall be conducted under the provisions of
the Uniform Arbitration Act by a 3 member panel composed of one member
appointed by the franchisee and one member appointed by the franchiser who
together shall choose the third member.
An arbitration proceeding hereunder
for a remedy under paragraph (6) of subsection (d) or paragraph (6), (8),
(10) or (11) of subsection (e) of Section 4 of this Act
shall be commenced by written notice
to the franchiser by the objecting franchisee
within 30 days from the date the dealer received notice
to cancel, terminate, modify or not extend or renew an existing franchise
or selling agreement or refusal to honor succession to ownership or refusal
to honor a sale or transfer or to grant or enter into the additional
franchise
or selling agreement, or to relocate an existing motor vehicle dealer;
or within 60 days of the date the franchisee received notice in writing by
the
franchiser of its determination under any
provision of Section 4 (other than paragraph (6) of subsection (d) or
paragraph (6), (8), (10) or (11) of subsection (e) of Section 4), 5, 6, 7, 9,
10.1, or 11 of this Act; however, if notice of the provision under which the
determination has been made is not given by the franchiser, then the
proceeding shall be commenced as provided by Section 14 of this Act.
The franchiser and the franchisee shall appoint their respective arbitrators
and they shall select the third arbitrator within 14 days of receipt of
such notice by the franchiser. The arbitrators shall commence hearings
within 60 days after all the arbitrators have been appointed and a decision
shall be rendered within 30 days after completion of the hearing.
During the pendency of the arbitration, any party may apply to a court
of competent jurisdiction which shall have power to modify or stay the
effective date of a proposed additional franchise or selling
agreement, or the effective date of a proposed motor vehicle dealership
relocation or the effective date of a cancellation, termination or
modification or refusal to honor succession or refusal to allow a sale or
transfer or extend the expiration date of a franchise or selling
agreement pending a final determination of
the issues raised in the arbitration hearing upon such terms as the court
may determine. Any such modification or stay shall not be effective for
more than 60 days unless extended by the court for good cause or unless
the arbitration hearing is then in progress.
(b) If the franchiser and the franchisee have not agreed to submit a
dispute involving
Section 4, 5, 6, 7, 9, 10.1, or 11 of this Act to arbitration under
subsection (a), then a proceeding before
the Motor Vehicle Review Board as prescribed by subsection (c) or (d) of
Section 12 and Section 29 of this Act for a remedy other than damages under
paragraph (6) of subsection (d) or paragraph (6), (8), (10), or (11) of
subsection (e) of Section 4 of this Act shall be commenced upon receipt by
the Motor Vehicle Review Board of a timely notice of protest or within 60
days of the date the franchisee received notice in writing by the franchiser
of its determination under any provision of those Sections other than
paragraph (6) of subsection (d) or paragraph (6), (8), (10), or (11) of
subsection (e) of Section 4 of this Act; however, if
notice of the provision under which the determination has been made is not
given by the franchiser, then the proceeding shall be commenced as provided
by Section 14 of this Act.
During the pendency of a proceeding under this Section, a party
may apply to a court of competent jurisdiction that shall have power to modify
or stay the effective date of a proposed additional franchise or selling
agreement, or the effective date of a proposed motor vehicle
dealership relocation, or the effective date of a cancellation,
termination, or modification, or extend the expiration date of a
franchise or selling agreement or refusal to honor succession to
ownership or refusal to approve a sale or transfer pending a final
determination of the issues raised in the hearing upon such terms as
the court may determine. Any modification or stay shall not be
effective for more than 60 days unless extended by the court for good cause or
unless the hearing is then in progress.
(c) In proceedings under (a) or (b), when determining whether good cause
has been established for granting such proposed additional franchise or
selling agreement, or for relocating an existing motor vehicle dealership, the
arbitrators or Board shall consider all
relevant
circumstances in accordance with subsection (v) of Section 2 of this Act,
including but not limited to:
(1) whether the establishment of such additional |
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franchise or the relocation of such motor vehicle dealership is warranted by economic and marketing conditions including anticipated future changes;
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(2) the retail sales and service business transacted
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by the objecting motor vehicle dealer or dealers and other motor vehicle dealers of the same line make with a place of business in the relevant market area to be served by the additional franchise or the relocated motor vehicle dealership during the 5 year period immediately preceding such notice as compared to the business available to them;
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(3) the investment necessarily made and obligations
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incurred by the objecting motor vehicle dealer or dealers and other motor vehicle dealers of the same line make with a place of business in the relevant market area to be served by the additional franchise or the relocated motor vehicle dealership to perform their obligations under existing franchises or selling agreements; and, the manufacturer shall give reasonable credit for sales of factory repurchase vehicles purchased by the objecting motor vehicle dealer or dealers and other motor vehicle dealers of the same line make with the place of business in the relevant market area to be served by the additional franchise or the relocated motor vehicle dealership, or the additional motor vehicle dealership or other facility limited to the sale of factory repurchase or late model vehicles, at manufacturer authorized or sponsored auctions in determining performance of obligations under existing franchises or selling agreements relating to total new vehicle sales;
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(4) the permanency of the investment of the
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objecting motor vehicle dealer or dealers and other motor vehicle dealers of the same line make with a place of business in the relevant market area to be served by the additional franchise or the relocated motor vehicle dealership;
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(5) whether it is beneficial or injurious to the
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public welfare for an additional franchise or relocated motor vehicle dealership to be established;
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(6) whether the objecting motor vehicle dealer or
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dealers and other motor vehicle dealers of the same line make with a place of business in the relevant market area to be served by the additional franchisee or relocated motor vehicle dealership are providing adequate competition and convenient consumer care for the motor vehicles of the same line make owned or operated in the area to be served by the additional franchise or relocated motor vehicle dealership;
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(7) whether the objecting motor vehicle dealer or
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dealers and other motor vehicle dealers of the same line make with a place of business in the relevant market area to be served by the additional franchisee or the relocated motor vehicle dealership have adequate motor vehicle sales and service facilities, equipment, vehicle parts and qualified personnel to reasonably provide for the needs of the customer; provided, however, that good cause shall not be shown solely by a desire for further market penetration;
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(8) whether the establishment of an additional
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franchise or the relocation of a motor vehicle dealership would be in the public interest;
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(9) whether there has been a material breach by a
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motor vehicle dealer of the existing franchise agreement which creates a substantially detrimental effect upon the distribution of the franchiser's motor vehicles in the affected motor vehicle dealer's relevant market area or fraudulent claims for warranty work, insolvency or inability to pay debts as they mature;
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(10) the effect of an additional franchise or
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relocated motor vehicle dealership upon the existing motor vehicle dealers of the same line make in the relevant market area to be served by the additional franchisee or relocated motor vehicle dealership; and
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(11) whether the manufacturer has given reasonable
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credit to the objecting motor vehicle dealer or dealers and other motor vehicle dealers of the same line make with a place of business in the relevant market area to be served by the additional franchise or relocated motor vehicle dealership or additional motor vehicle dealership or other facility limited to the sale of factory repurchase or late model vehicles, for retail sales of factory repurchase vehicles purchased by the motor vehicle dealer or dealers at manufacturer authorized or sponsored auctions.
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(d) In proceedings under subsection (a) or (b), when determining
whether good cause has been established for cancelling, terminating, refusing
to extend or renew, or changing or modifying the obligations of the motor
vehicle dealer as a condition to offering a renewal, replacement, or
succeeding franchise or selling agreement, the arbitrators or Board
shall consider all relevant circumstances in accordance with
subsection (v) of Section 2 of this Act, including but not
limited to:
(1) The amount of retail sales transacted by the
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franchisee during a 5‑year period immediately before the date of the notice of proposed action as compared to the business available to the franchisee.
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(2) The investment necessarily made and obligations
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incurred by the franchisee to perform its part of the franchise.
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(3) The permanency of the franchisee's investment.
(4) Whether it is injurious to the public interest
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for the franchise to be cancelled or terminated or not extended or modified, or the business of the franchise disrupted.
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(5) Whether the franchisee has adequate motor
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vehicle sales and service facilities, equipment, vehicle parts, and service personnel to reasonably provide for the need of the customers for the same line make of motor vehicles handled by the franchisee.
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(6) Whether the franchisee fails to fulfill the
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warranty obligations of the manufacturer required to be performed by the franchisee.
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(7) The extent and materiality of the franchisee's
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failure to comply with the terms of the franchise and the reasonableness and fairness of those terms.
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(8) Whether the owners of the franchise had actual
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knowledge of the facts and circumstances upon which cancellation or termination, failure to extend or renew, or changing or modification of the obligations of the franchisee as a condition to offering a renewal, replacement, or succeeding franchise or selling agreement.
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(e) If the franchiser and the franchisee have not agreed to
submit a dispute to arbitration, and the dispute did not arise under paragraph
(6) of subsection (d) or paragraph (6),
(8), (10), or (11) of subsection (e) of Section 4 of this Act, then
a proceeding for a remedy other than damages may be
commenced by the objecting
franchisee in the circuit court of the county in which the objecting
franchisee has its principal place of business, within 60 days of the
date the franchisee received notice in writing by the franchiser of
its determination under any provision of this Act other than paragraph (6)
of subsection (d) or paragraph (6), (8), (10), or (11) of subsection (e) of
Section 4 of this Act; however, if notice of the provision under which the
determination has been made is not given by the franchiser, then the
proceeding shall be commenced as provided by Section 14 of this Act.
(f) The changes to this Section made by this amendatory Act of the
92nd General Assembly (i) apply only to causes of action accruing on or
after its effective date and (ii) are intended to provide only an additional
venue for dispute resolution without changing any substantive rights under this
Act.
(Source: P.A. 92‑272, eff. 1‑1‑02.)
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