Bill Text: IL SB2051 | 2023-2024 | 103rd General Assembly | Introduced

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Bill Title: Amends the Motor Vehicle Franchise Act. In provisions concerning unfair competition and practices, removes exceptions to the prohibition on a manufacturer, distributor, wholesaler, or distributor branch from exercising a right of first refusal or other right to acquire a franchise from a dealer. Makes conforming changes. Effective immediately.

Spectrum: Bipartisan Bill

Status: (Introduced) 2023-03-10 - Rule 3-9(a) / Re-referred to Assignments [SB2051 Detail]

Download: Illinois-2023-SB2051-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB2051 Introduced 2/9/2023, by Sen. Ram Villivalam SYNOPSIS AS INTRODUCED:
815 ILCS 710/4 from Ch. 121 1/2, par. 754
Amends the Motor Vehicle Franchise Act. In provisions concerning unfair competition and practices, removes exceptions to the prohibition on a manufacturer, distributor, wholesaler, or distributor branch from exercising a right of first refusal or other right to acquire a franchise from a dealer. Makes conforming changes. Effective immediately.
LRB103 27188 SPS 53558 b
A BILL FOR
SB2051 LRB103 27188 SPS 53558 b
AN ACT concerning business.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Motor Vehicle Franchise Act is amended by
changing Section 4 as follows:
(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,

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or attempt to coerce, any motor vehicle dealer:
(1) to accept, buy or order any motor vehicle or
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;
(2) to order or accept delivery of any motor vehicle
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
(3) to order for anyone any parts, accessories,
equipment, machinery, tools, appliances or any commodity
whatsoever, except items required by applicable law.
(c-5) 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 may not:
(1) require a motor vehicle dealer to offer a
secondary product; or

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(2) prohibit a motor vehicle dealer from offering a
secondary product, including, but not limited to:
(A) service contracts;
(B) maintenance agreements;
(C) extended warranties;
(D) protection product guarantees;
(E) guaranteed asset protection waivers;
(F) insurance;
(G) replacement parts;
(H) vehicle accessories;
(I) oil; or
(J) supplies.
It is not a violation of this subsection to offer an
incentive program to motor vehicle dealers to encourage them
to sell or offer to sell a secondary product approved,
endorsed, sponsored, or offered by the manufacturer,
distributor, wholesaler, distributor branch or division,
factory branch or division, wholesale branch or division, or
officer, agent, or other representative thereof, provided the
program does not provide vehicle sales or service incentives.
It is not a violation of this subsection to prohibit a
motor vehicle dealer from using secondary products for any
repair work paid for under the terms of a warranty, recall,
service contract, extended warranty, maintenance plan, or
certified pre-owned vehicle program established or offered by
the manufacturer, distributor, wholesaler, distributor branch

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or division, factory branch or division, or wholesale branch
or division, or officer, agent, or other representative
thereof.
As used in this subsection, "secondary product" means all
products that are not new motor vehicles or original equipment
manufacturer parts.
(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 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;
(2) to fail or refuse to advise or disclose to any
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;
(3) to refuse to deliver in reasonable quantities 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

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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;
(4) to coerce, or attempt to coerce, any motor 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

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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;
(5) to require a franchisee to participate in an
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;
(6) to cancel or terminate the franchise or selling
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.
(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:
(i) the business operations of the 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
(ii) the conviction of or plea of nolo
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.
Each notice of proposed action shall include a
detailed statement setting forth the specific grounds

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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.
(B) If a manufacturer, distributor, wholesaler,
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.
(C) Within 30 days from receipt of the notice
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 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.
The manufacturer shall have the burden of proof 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.
(D) Notwithstanding the terms, conditions, or
provisions of a franchise or selling agreement, the
following shall not constitute good cause for

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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.
(E) The manufacturer may not cancel or 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;
(7) notwithstanding the terms of any franchise
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,

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but not limited to, strict liability, negligence,
misrepresentation, warranty (express or implied), or
rescission 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;
(8) to require or otherwise coerce a motor vehicle
dealer to underutilize the motor vehicle dealer's
facilities by requiring or otherwise coercing the motor
vehicle dealer to exclude or remove from the motor vehicle
dealer's facilities operations for selling or servicing of
any vehicles for which the motor vehicle dealer has a
franchise agreement with another manufacturer,
distributor, wholesaler, distribution branch or division,
or officer, agent, or other representative thereof;
provided, however, that, in light of all existing
circumstances, (i) the motor vehicle dealer maintains a
reasonable line of credit for each make or line of new
motor vehicle, (ii) the new motor vehicle dealer remains
in compliance with any reasonable facilities requirements
of the manufacturer, (iii) no change is made in the

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principal management of the new motor vehicle dealer, and
(iv) the addition of the make or line of new motor vehicles
would be reasonable. The reasonable facilities requirement
set forth in item (ii) of subsection (d)(8) shall not
include any requirement that a franchisee establish or
maintain exclusive facilities, personnel, or display
space. Any decision by a motor vehicle dealer to sell
additional makes or lines at the motor vehicle dealer's
facility shall be presumed to be reasonable, and the
manufacturer shall have the burden to overcome that
presumption. A motor vehicle dealer must provide a written
notification of its intent to add a make or line of new
motor vehicles to the manufacturer. If the manufacturer
does not respond to the motor vehicle dealer, in writing,
objecting to the addition of the make or line within 60
days after the date that the motor vehicle dealer sends
the written notification, then the manufacturer shall be
deemed to have approved the addition of the make or line;
(9) to use or consider the performance of a motor
vehicle dealer relating to the sale of the manufacturer's,
distributor's, or wholesaler's vehicles or the motor
vehicle dealer's ability to satisfy any minimum sales or
market share quota or responsibility relating to the sale
of the manufacturer's, distributor's, or wholesaler's new
vehicles in determining:
(A) the motor vehicle dealer's eligibility to

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purchase program, certified, or other used motor
vehicles from the manufacturer, distributor, or
wholesaler;
(B) the volume, type, or model of program,
certified, or other used motor vehicles that a motor
vehicle dealer is eligible to purchase from the
manufacturer, distributor, or wholesaler;
(C) the price of any program, certified, or other
used motor vehicle that the dealer is eligible to
purchase from the manufacturer, distributor, or
wholesaler; or
(D) the availability or amount of any discount,
credit, rebate, or sales incentive that the dealer is
eligible to receive from the manufacturer,
distributor, or wholesaler for the purchase of any
program, certified, or other used motor vehicle
offered for sale by the manufacturer, distributor, or
wholesaler;
(10) to take any adverse action against a dealer
pursuant to an export or sale-for-resale prohibition
because the dealer sold or leased a vehicle to a customer
who either exported the vehicle to a foreign country or
resold the vehicle in violation of the prohibition, unless
the export or sale-for-resale prohibition policy was
provided to the dealer in writing either electronically or
on paper, prior to the sale or lease, and the dealer knew

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or reasonably should have known of the customer's intent
to export or resell the vehicle in violation of the
prohibition at the time of the sale or lease. If the dealer
causes the vehicle to be registered and titled in this or
any other state, and collects or causes to be collected
any applicable sales or use tax to this State, a
rebuttable presumption is established that the dealer did
not have reason to know of the customer's intent to resell
the vehicle;
(11) to coerce or require any dealer to construct
improvements to his or her facilities or to install new
signs or other franchiser image elements that replace or
substantially alter those improvements, signs, or
franchiser image elements completed within the past 10
years that were required and approved by the manufacturer
or one of its affiliates. The 10-year period under this
paragraph (11) begins to run for a dealer, including that
dealer's successors and assigns, on the date that the
manufacturer gives final written approval of the facility
improvements or installation of signs or other franchiser
image elements or the date that the dealer receives a
certificate of occupancy, whichever is later. For the
purpose of this paragraph (11), the term "substantially
alter" does not include routine maintenance, including,
but not limited to, interior painting, that is reasonably
necessary to keep a dealer facility in attractive

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condition; or
(12) to require a dealer to purchase goods or services
to make improvements to the dealer's facilities from a
vendor selected, identified, or designated by a
manufacturer or one of its affiliates by agreement,
program, incentive provision, or otherwise without making
available to the dealer the option to obtain the goods or
services of substantially similar quality and overall
design from a vendor chosen by the dealer and approved by
the manufacturer; however, approval by the manufacturer
shall not be unreasonably withheld, and the dealer's
option to select a vendor shall not be available if the
manufacturer provides substantial reimbursement for the
goods or services offered. "Substantial reimbursement"
means an amount equal to or greater than the cost savings
that would result if the dealer were to utilize a vendor of
the dealer's own selection instead of using the vendor
identified by the manufacturer. For the purpose of this
paragraph (12), the term "goods" does not include movable
displays, brochures, and promotional materials containing
material subject to the intellectual property rights of a
manufacturer. If signs, other than signs containing the
manufacturer's brand or logo or free-standing signs that
are not directly attached to a building, or other
franchiser image or design elements or trade dress are to
be leased to the dealer by a vendor selected, identified,

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or designated by the manufacturer, the dealer has the
right to purchase the signs or other franchiser image or
design elements or trade dress of substantially similar
quality and design from a vendor selected by the dealer if
the signs, franchiser image or design elements, or trade
dress are approved by the manufacturer. Approval by the
manufacturer shall not be unreasonably withheld. This
paragraph (12) shall not be construed to allow a dealer or
vendor to impair, infringe upon, or eliminate, directly or
indirectly, the intellectual property rights of the
manufacturer, including, but not limited to, the
manufacturer's intellectual property rights in any
trademarks or trade dress, or other intellectual property
interests owned or controlled by the manufacturer. This
paragraph (12) shall not be construed to permit a dealer
to erect or maintain signs that do not conform to the
manufacturer's intellectual property rights or trademark
or trade dress usage guidelines.
(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
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, 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;
(3) to offer to sell or lease, or to sell or lease, 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
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;
(5) to prevent or attempt to prevent by contract or
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

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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;
(6) to refuse to give effect to or prevent or 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:
(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.
When a protest has been timely filed, the Board
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 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.
(B) Good cause to refuse to approve such sale or
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.
(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;
(8) to grant an additional franchise in the relevant
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

SB2051 - 23 - LRB103 27188 SPS 53558 b
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.
When a protest has been timely filed, the 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 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.
When more than one protest is filed against the 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

SB2051 - 24 - LRB103 27188 SPS 53558 b
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.
The determination whether good cause exists for
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.
A. (Blank).
B. For the purposes of this Section, appointment

SB2051 - 25 - LRB103 27188 SPS 53558 b
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.
C. This Section does not apply to the relocation
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

SB2051 - 26 - LRB103 27188 SPS 53558 b
may not file a written protest against the relocation
with the Motor Vehicle Review Board.
D. Nothing in this Section 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;
(9) to require a motor vehicle dealer to assent to a
release, assignment, novation, waiver or estoppel which
would relieve any person from liability imposed by this
Act;
(10) to prevent or refuse to give effect to the
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

SB2051 - 27 - LRB103 27188 SPS 53558 b
under the existing franchise if:
(i) The designated successor gives the
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
(ii) The designated successor agrees to be
bound by all the terms and conditions of the
existing franchise.
Notwithstanding the foregoing, in the event the 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.
(A) If the franchiser intends to refuse to honor
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.

SB2051 - 28 - LRB103 27188 SPS 53558 b
The notice shall set forth the specific grounds for
the refusal to honor the succession and discontinue
the existing franchise agreement.
If notice of refusal is not timely served upon 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.
Within 30 days from the date the notice was
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.
When a protest has been timely filed, the 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 franchiser that
filed the notice of intention of the proposed action
and to the protesting designee or such other person.
The manufacturer shall have the burden of proof 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

SB2051 - 29 - LRB103 27188 SPS 53558 b
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.
(B) No manufacturer shall impose any conditions
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;
(11) to prevent or refuse to approve a proposal to
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

SB2051 - 30 - LRB103 27188 SPS 53558 b
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;
(12) to prevent or refuse to grant a franchise to a
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;
(13) to prevent or attempt to prevent any new motor
vehicle dealer from establishing any additional motor

SB2051 - 31 - LRB103 27188 SPS 53558 b
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; or
(14) to exercise a right of first refusal or other
right to acquire a franchise from a dealer. , unless the
manufacturer:
(A) notifies the dealer in writing that it intends
to exercise its right to acquire the franchise not
later than 60 days after the manufacturer's or
distributor's receipt of a notice of the proposed
transfer from the dealer and all information and
documents reasonably and customarily required by
the manufacturer or distributor supporting the
proposed transfer;
(B) pays to the dealer the same or greater
consideration as the dealer has contracted to receive
in connection with the proposed transfer or sale of
all or substantially all of the dealership assets,
stock, or other ownership interest, including the
purchase or lease of all real property, leasehold, or
improvements related to the transfer or sale of the
dealership. Upon exercise of the right of first

SB2051 - 32 - LRB103 27188 SPS 53558 b
refusal or such other right, the manufacturer or
distributor shall have the right to assign the lease
or to convey the real property;
(C) assumes all of the duties, obligations, and
liabilities contained in the agreements that were to
be assumed by the proposed transferee and with respect
to which the manufacturer or distributor exercised the
right of first refusal or other right to acquire the
franchise;
(D) reimburses the proposed transferee for all
reasonable expenses incurred in evaluating,
investigating, and negotiating the transfer of the
dealership prior to the manufacturer's or
distributor's exercise of its right of first refusal
or other right to acquire the dealership. For purposes
of this paragraph, "reasonable expenses" includes the
usual and customary legal and accounting fees charged
for similar work, as well as expenses associated with
the evaluation and investigation of any real property
on which the dealership is operated. The proposed
transferee shall submit an itemized list of its
expenses to the manufacturer or distributor not later
than 30 days after the manufacturer's or distributor's
exercise of the right of first refusal or other right
to acquire the motor vehicle franchise. The
manufacturer or distributor shall reimburse the

SB2051 - 33 - LRB103 27188 SPS 53558 b
proposed transferee for its expenses not later than 90
days after receipt of the itemized list. A
manufacturer or distributor may request to be provided
with the itemized list of expenses before exercising
the manufacturer's or distributor's right of first
refusal.
Except as provided in this paragraph (14), neither the
selling dealer nor the manufacturer or distributor shall
have any liability to any person as a result of a
manufacturer or distributor exercising its right of first
refusal.
For the purpose of this paragraph, "proposed
transferee" means the person to whom the franchise would
have been transferred to, or was proposed to be
transferred to, had the right of first refusal or other
right to acquire the franchise not been exercised by the
manufacturer or distributor.
(f) It is 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, 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

SB2051 - 34 - LRB103 27188 SPS 53558 b
affiliate, except that, this subsection shall not prohibit:
(1) 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;
(2) 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; or
(3) the ownership or operation of a place of business
by a manufacturer that manufactures only diesel engines
for installation in trucks having a gross vehicle weight
rating of more than 16,000 pounds that are required to be
registered under the Illinois Vehicle Code, provided that:
(A) the manufacturer does not otherwise
manufacture, distribute, or sell motor vehicles as
defined under Section 1-217 of the Illinois Vehicle

SB2051 - 35 - LRB103 27188 SPS 53558 b
Code;
(B) the manufacturer owned a place of business and
it was in operation as of January 1, 2016;
(C) the manufacturer complies with all obligations
owed to dealers that are not owned, operated, or
controlled by the manufacturer, including, but not
limited to those obligations arising pursuant to
Section 6;
(D) to further avoid any acts or practices, the
effect of which may be to lessen or eliminate
competition, the manufacturer provides to dealers on
substantially equal terms access to all support for
completing repairs, including, but not limited to,
parts and assemblies, training, and technical service
bulletins, and other information concerning repairs
that the manufacturer provides to facilities that are
owned, operated, or controlled by the manufacturer;
and
(E) the manufacturer does not require that
warranty repair work be performed by a
manufacturer-owned repair facility and the
manufacturer provides any dealer that has an agreement
with the manufacturer to sell and perform warranty
repairs on the manufacturer's engines the opportunity
to perform warranty repairs on those engines,
regardless of whether the dealer sold the truck into

SB2051 - 36 - LRB103 27188 SPS 53558 b
which the engine was installed.
(g) Notwithstanding the terms, provisions, or conditions
of any agreement or waiver, 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 directly or indirectly condition
the awarding of a franchise to a prospective new motor vehicle
dealer, the addition of a line make or franchise to an existing
dealer, the renewal of a franchise of an existing dealer, the
approval of the relocation of an existing dealer's facility,
or the approval of the sale or transfer of the ownership of a
franchise on the willingness of a dealer, proposed new dealer,
or owner of an interest in the dealership facility to enter
into a site control agreement or exclusive use agreement
unless separate and reasonable consideration was offered and
accepted for that agreement.
For purposes of this subsection (g), the terms "site
control agreement" and "exclusive use agreement" include any
agreement that has the effect of either (i) requiring that the
dealer establish or maintain exclusive dealership facilities;
or (ii) restricting the ability of the dealer, or the ability
of the dealer's lessor in the event the dealership facility is
being leased, to transfer, sell, lease, or change the use of
the dealership premises, whether by sublease, lease,
collateral pledge of lease, or other similar agreement. "Site

SB2051 - 37 - LRB103 27188 SPS 53558 b
control agreement" and "exclusive use agreement" also include
a manufacturer restricting the ability of a dealer to
transfer, sell, or lease the dealership premises by right of
first refusal to purchase or lease, option to purchase, or
option to lease if the transfer, sale, or lease of the
dealership premises is to a person who is an immediate family
member of the dealer. For the purposes of this subsection (g),
"immediate family member" means a spouse, parent, son,
daughter, son-in-law, daughter-in-law, brother, and sister.
If a manufacturer exercises any right of first refusal to
purchase or lease or option to purchase or lease with regard to
a transfer, sale, or lease of the dealership premises to a
person who is not an immediate family member of the dealer,
then (1) within 60 days from the 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, the manufacturer must notify the dealer of
its intent to exercise the right of first refusal to purchase
or lease or option to purchase or lease and (2) the exercise of
the right of first refusal to purchase or lease or option to
purchase or lease must result in the dealer receiving
consideration, terms, and conditions that either are the same
as or greater than that which they have contracted to receive
in connection with the proposed transfer, sale, or lease of
the dealership premises.
Any provision contained in any agreement entered into on

SB2051 - 38 - LRB103 27188 SPS 53558 b
or after November 25, 2009 (the effective date of Public Act
96-824) that is inconsistent with the provisions of this
subsection (g) shall be voidable at the election of the
affected dealer, prospective dealer, or owner of an interest
in the dealership facility.
(h) For purposes of this subsection:
"Successor manufacturer" means any motor vehicle
manufacturer that, on or after January 1, 2009, acquires,
succeeds to, or assumes any part of the business of another
manufacturer, referred to as the "predecessor manufacturer",
as the result of any of the following:
(i) A change in ownership, operation, or control of
the predecessor manufacturer by sale or transfer of
assets, corporate stock or other equity interest,
assignment, merger, consolidation, combination, joint
venture, redemption, court-approved sale, operation of law
or otherwise.
(ii) The termination, suspension, or cessation of a
part or all of the business operations of the predecessor
manufacturer.
(iii) The discontinuance of the sale of the product
line.
(iv) A change in distribution system by the
predecessor manufacturer, whether through a change in
distributor or the predecessor manufacturer's decision to
cease conducting business through a distributor

SB2051 - 39 - LRB103 27188 SPS 53558 b
altogether.
"Former Franchisee" means a new motor vehicle dealer that
has entered into a franchise with a predecessor manufacturer
and that has either:
(i) entered into a termination agreement or deferred
termination agreement with a predecessor or successor
manufacturer related to such franchise; or
(ii) has had such franchise canceled, terminated,
nonrenewed, noncontinued, rejected, nonassumed, or
otherwise ended.
For a period of 3 years from: (i) the date that a successor
manufacturer acquires, succeeds to, or assumes any part of the
business of a predecessor manufacturer; (ii) the last day that
a former franchisee is authorized to remain in business as a
franchised dealer with respect to a particular franchise under
a termination agreement or deferred termination agreement with
a predecessor or successor manufacturer; (iii) the last day
that a former franchisee that was cancelled, terminated,
nonrenewed, noncontinued, rejected, nonassumed, or otherwise
ended by a predecessor or successor manufacturer is authorized
to remain in business as a franchised dealer with respect to a
particular franchise; or (iv) November 25, 2009 (the effective
date of Public Act 96-824), whichever is latest, it shall be
unlawful for such successor manufacturer to enter into a same
line make franchise with any person or to permit the
relocation of any existing same line make franchise, for a

SB2051 - 40 - LRB103 27188 SPS 53558 b
line make of the predecessor manufacturer that would be
located or relocated within the relevant market area of a
former franchisee who owned or leased a dealership facility in
that relevant market area without first offering the
additional or relocated franchise to the former franchisee, or
the designated successor of such former franchisee in the
event the former franchisee is deceased or a person with a
disability, at no cost and without any requirements or
restrictions other than those imposed generally on the
manufacturer's other franchisees at that time, unless one of
the following applies:
(1) As a result of the former franchisee's
cancellation, termination, noncontinuance, or nonrenewal
of the franchise, the predecessor manufacturer had
consolidated the line make with another of its line makes
for which the predecessor manufacturer had a franchisee
with a then-existing dealership facility located within
that relevant market area.
(2) The successor manufacturer has paid the former
franchisee, or the designated successor of such former
franchisee in the event the former franchisee is deceased
or a person with a disability, the fair market value of the
former franchisee's franchise on (i) the date the
franchiser announces the action which results in the
termination, cancellation, or nonrenewal; or (ii) the date
the action which results in termination, cancellation, or

SB2051 - 41 - LRB103 27188 SPS 53558 b
nonrenewal first became general knowledge; or (iii) the
day 12 months prior to the date on which the notice of
termination, cancellation, or nonrenewal is issued,
whichever amount is higher. Payment is due within 90 days
of the effective date of the termination, cancellation, or
nonrenewal. If the termination, cancellation, or
nonrenewal is due to a manufacturer's change in
distributors, the manufacturer may avoid paying fair
market value to the dealer if the new distributor or the
manufacturer offers the dealer a franchise agreement with
terms acceptable to the dealer.
(3) The successor manufacturer proves that it would
have had good cause to terminate the franchise agreement
of the former franchisee, or the successor of the former
franchisee under item (e)(10) in the event that the former
franchisee is deceased or a person with a disability. The
determination of whether the successor manufacturer would
have had good cause to terminate the franchise agreement
of the former franchisee, or the successor of the former
franchisee, shall be made by the Board under subsection
(d) of Section 12. A successor manufacturer that seeks to
assert that it would have had good cause to terminate a
former franchisee, or the successor of the former
franchisee, must file a petition seeking a hearing on this
issue before the Board and shall have the burden of
proving that it would have had good cause to terminate the

SB2051 - 42 - LRB103 27188 SPS 53558 b
former franchisee or the successor of the former
franchisee. No successor dealer, other than the former
franchisee, may be appointed or franchised by the
successor manufacturer within the relevant market area of
the former franchisee until the Board has held a hearing
and rendered a determination on the issue of whether the
successor manufacturer would have had good cause to
terminate the former franchisee.
In the event that a successor manufacturer attempts to
enter into a same line make franchise with any person or to
permit the relocation of any existing line make franchise
under this subsection (h) at a location that is within the
relevant market area of 2 or more former franchisees, then the
successor manufacturer may not offer it to any person other
than one of those former franchisees unless the successor
manufacturer can prove that at least one of the 3 exceptions in
items (1), (2), and (3) of this subsection (h) applies to each
of those former franchisees.
(Source: P.A. 102-433, eff. 1-1-22.)
Section 99. Effective date. This Act takes effect upon
becoming law.