The State of New Jersey is adopting significant changes to it’s Franchise Protection Act which protects automobile dealerships against the franchisor’s controls. Some of the more poignant aspects of the law include:
It shall now be unlawful for a motor vehicle manufacturer to:
- To impose or attempt to impose any requirement, limitation or regulation on, or interfere or attempt to interfere with, the manner in which a motor vehicle franchisee utilizes the facilities at which a motor vehicle franchise is operated, including, but not limited to, requirements, limitations or regulations as to the line makes of motor vehicles that may be sold or offered for sale at the facility, or to take or withhold or threaten to take or withhold any action, impose or threaten to impose any penalty, or deny or threaten to deny any benefit, as a result of the manner in which the motor vehicle franchisee utilizes his facilities, except that the motor vehicle franchisor may require that the portion of the facilities allocated to or used for the motor vehicle franchise meets the motor vehicle franchisor’s reasonable, written space and volume requirements as uniformly applied by the motor vehicle franchisor. 1The provisions of this subsection shall not apply if the motor vehicle franchisor and the motor vehicle franchisee voluntarily agree to the requirement and separate and valuable consideration therefor is paid.
- To impose or attempt to impose any conditions on the approval of the transfer of a motor vehicle franchise, except as provided in section 6 of P.L. 1971, c.356 (C.56:10-6).
- To take or withhold or threaten to take or withhold any action, impose or threaten to impose any penalty, or deny or threaten to deny any benefit, because the motor vehicle franchisee sold or leased a motor vehicle to a customer who exported the vehicle to a foreign country or who resold the vehicle, unless the motor vehicle franchisor can establish that the motor vehicle franchisee 1[had actual knowledge] knew or reasonably should have known1 , prior to the sale or lease, that the customer intended to export or resell the motor vehicle; provided, however, that it shall be 1[conclusively]1 presumed that the motor vehicle franchisee 1[had no such actual knowledge] did not know or should not have reasonably known that the vehicle would be exported1 if the vehicle is titled or registered in any state or the District of Columbia.
- To allocate vehicles to or evaluate the performance of a motor vehicle franchise based on, or offer any discount, incentive, bonus, program, allowance or credit that differentiates between vehicle sales by a motor vehicle franchisee within a territory or geographic area assigned to the motor vehicle franchisee and vehicle sales outside of such territory or geographic area.