2016 Tennessee Code
Title 55 - Motor and Other Vehicles
Chapter 28 - Tennessee Recreation Vehicle Franchise Act of 2016 [Effective July 1, 2017]
§ 55-28-104. Termination, cancellation, or failure to renew manufacturer/dealer agreement by manufacturer or distributor. [Effective July 1, 2017.]

TN Code § 55-28-104 (2016) What's This?

(a) A manufacturer or distributor, directly or through any authorized officer, agent, or employee, may terminate, cancel, or fail to renew a manufacturer/dealer agreement only with good cause.

(b) The manufacturer or distributor has the burden of showing good cause for terminating, canceling, or failing to renew a manufacturer/dealer agreement with a dealer. For purposes of determining whether there is good cause for the proposed action, any of the following factors may be considered:

(1) The extent of the affected dealer's penetration in the area of sales responsibility;

(2) The nature and extent of the dealer's investment in its business;

(3) The adequacy of the dealer's service facilities, equipment, parts, supplies, and personnel;

(4) The effect of the proposed action on the community;

(5) The extent and quality of the dealer's service under recreational vehicle warranties;

(6) The dealer's failure to follow agreed-upon procedures or standards related to the overall operation of the dealership; or

(7) The dealer's performance under the terms of its manufacturer/dealer agreement.

(c) Except as otherwise provided in this section, a manufacturer or distributor shall provide a dealer with at least ninety (90) days prior written notice of termination, cancellation, or nonrenewal of the manufacturer/dealer agreement.

(d) (1) The notice must state all reasons for the proposed termination, cancellation, or nonrenewal and must further state that if, within thirty (30) days following receipt of the notice, the dealer provides to the manufacturer or distributor a written notice of intent to cure all claimed deficiencies, the dealer will then have ninety (90) days following receipt of the original notice to rectify the deficiencies.

(2) If the deficiencies are rectified within ninety (90) days, the manufacturer's or distributor's notice is voided. If the dealer fails to provide the notice of intent to cure the deficiencies or fails to cure the deficiencies in the prescribed time period, the termination, cancellation, or nonrenewal takes effect as provided in the original notice.

(e) The notice period may be reduced to thirty (30) days if the manufacturer's or distributor's grounds for termination, cancellation, or nonrenewal are due to any of the following good cause factors:

(1) A dealer or one of its owners being convicted of or entering a plea of nolo contendere to a felony;

(2) The abandonment or closing of the business operations of the dealer for ten (10) consecutive business days unless the closing is due to an act of God, strike, labor difficulty, or other cause over which the dealer has no control;

(3) A significant misrepresentation by the dealer materially affecting the business relationship;

(4) A suspension or revocation of the dealer's license, or refusal to renew the dealer's license, by the commission; or

(5) A material violation of this chapter which is not cured within thirty (30) days of written notice by the manufacturer.

(f) Subsection (c) does not apply if the reason for termination, cancellation, or nonrenewal is the dealer's insolvency, the occurrence of an assignment for the benefit of creditors, or bankruptcy.

Disclaimer: These codes may not be the most recent version. Tennessee may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.