Bill Text: IL SB1417 | 2009-2010 | 96th General Assembly | Enrolled

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Bill Title: Amends the Motor Vehicle Franchise Act. Expands the definition of the term "motor vehicle" to include any engine, transmission, or rear axle, regardless of whether it is attached to a vehicle chassis, that is manufactured for installation in any motor-driven vehicle with a gross vehicle weight rating of more than 16,000 pounds that is required to be registered under the Illinois Vehicle Code. Eliminates language providing that a manufacturer has good cause to cancel, terminate, or fail to extend or renew the franchise or selling agreement to all franchisees of a line make when the manufacturer permanently discontinues the manufacture or assembly of motor vehicles of such line make. Provides that it is a violation for a manufacturer to require or coerce a motor vehicle dealer to underutilize the motor vehicle dealer's facilities by requiring or coercing the motor vehicle dealer to cease operations for the selling or servicing of any vehicles that fall under a franchise agreement with another manufacturer. Provides an itemized list of what is considered reasonable compensation to a motor vehicle dealer for the value of the motor vehicle dealer's business and business premises, as well as a payment scheme for such compensation. Makes other changes. Effective immediately.

Spectrum: Slight Partisan Bill (Republican 8-5)

Status: (Passed) 2009-05-22 - Public Act . . . . . . . . . 96-0011 [SB1417 Detail]

Download: Illinois-2009-SB1417-Enrolled.html

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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 Sections 2, 4, 6, and 9 and by adding Section 9.5 as
follows:
(815 ILCS 710/2) (from Ch. 121 1/2, par. 752)
Sec. 2. Definitions. As used in this Act, the following
words shall, unless the context otherwise requires, have the
following meanings:
(a) "Motor vehicle", any motor driven vehicle required to
be registered under "The Illinois Vehicle Code". Beginning
January 1, 2010, the term "motor vehicle" also includes any
engine, transmission, or rear axle, regardless of whether it is
attached to a vehicle chassis, that is manufactured for
installation in any motor-driven vehicle with a gross vehicle
weight rating of more than 16,000 pounds that is required to be
registered under the Illinois Vehicle Code.
(b) "Manufacturer", any person engaged in the business of
manufacturing or assembling new and unused motor vehicles.
(c) "Factory branch", a branch office maintained by a
manufacturer which manufactures or assembles motor vehicles
for sale to distributors or motor vehicle dealers or which is

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maintained for directing and supervising the representatives
of the manufacturer.
(d) "Distributor branch", a branch office maintained by a
distributor or wholesaler who or which sells or distributes new
or used motor vehicles to motor vehicle dealers.
(e) "Factory representative", a representative employed by
a manufacturer or employed by a factory branch for the purpose
of making or promoting the sale of motor vehicles or for
contracting with, supervising, servicing or instructing motor
vehicle dealers or prospective motor vehicle dealers.
(f) "Distributor representative", a representative
employed by a distributor branch, distributor or wholesaler.
(g) "Distributor" or "wholesaler", any person who sells or
distributes new or used motor vehicles to motor vehicle dealers
or who maintains distributor representatives within the State.
(h) "Motor vehicle dealer", any person who, in the ordinary
course of business, is engaged in the business of selling new
or used motor vehicles to consumers or other end users.
(i) "Franchise", an oral or written arrangement for a
definite or indefinite period in which a manufacturer,
distributor or wholesaler grants to a motor vehicle dealer a
license to use a trade name, service mark, or related
characteristic, and in which there is a community of interest
in the marketing of motor vehicles or services related thereto
at wholesale, retail, leasing or otherwise.
(j) "Franchiser", a manufacturer, distributor or

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wholesaler who grants a franchise to a motor vehicle dealer.
(k) "Franchisee", a motor vehicle dealer to whom a
franchise is offered or granted.
(l) "Sale", shall include the issuance, transfer,
agreement for transfer, exchange, pledge, hypothecation,
mortgage in any form, whether by transfer in trust or
otherwise, of any motor vehicle or interest therein or of any
franchise related thereto; and any option, subscription or
other contract or solicitation, looking to a sale, or offer or
attempt to sell in any form, whether oral or written. A gift or
delivery of any motor vehicle or franchise with respect thereto
with or as a bonus on account of the sale of anything shall be
deemed a sale of such motor vehicle or franchise.
(m) "Fraud", shall include, in addition to its normal legal
connotation, the following: a misrepresentation in any manner,
whether intentionally false or due to reckless disregard for
truth or falsity, of a material fact; a promise or
representation not made honestly and in good faith; and an
intentional failure to disclose a material fact.
(n) "Person", a natural person, corporation, partnership,
trust or other entity, and in case of an entity, it shall
include any other entity in which it has a majority interest or
which it effectively controls as well as the individual
officers, directors and other persons in active control of the
activities of each such entity.
(o) "New motor vehicle", a motor vehicle which has not been

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previously sold to any person except a distributor or
wholesaler or motor vehicle dealer for resale.
(p) "Market Area", the franchisee's area of primary
responsibility as defined in its franchise.
(q) "Relevant Market Area", the area within a radius of 10
miles from the principal location of a franchise or dealership
if said principal location is in a county having a population
of more than 300,000 persons; if the principal location of a
franchise or dealership is in a county having a population of
less than 300,000 persons, then "relevant market area" shall
mean the area within a radius of 15 miles from the principal
location of said franchise or dealership.
(r) "Late model vehicle" means a vehicle of the current
model year and one, 2, or 3 preceding model years for which the
motor vehicle dealer holds an existing franchise from the
manufacturer for that same line make.
(s) "Factory repurchase vehicle" means a motor vehicle of
the current model year or a late model vehicle reacquired by
the manufacturer under an existing agreement or otherwise from
a fleet, lease or daily rental company or under any State or
federal law or program relating to allegedly defective new
motor vehicles, and offered for sale and resold by the
manufacturer directly or at a factory authorized or sponsored
auction.
(t) "Board" means the Motor Vehicle Review Board created
under this Act.

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(u) "Secretary of State" means the Secretary of State of
Illinois.
(v) "Good cause" means facts establishing commercial
reasonableness in lawful or privileged competition and
business practices as defined at common law.
(Source: P.A. 95-678, eff. 10-11-07.)
(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:

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(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.
(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;

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(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 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,

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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
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

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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,
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

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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
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

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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.
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

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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
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.
Good cause shall exist to cancel, terminate or 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.
(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

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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
(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,
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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(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 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

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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; or
(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
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

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(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.
(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;
(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

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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;
(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

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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
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

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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
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

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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.
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

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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
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

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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.
When a protest has been timely filed, the Board shall
enter an order fixing a date (within 60 days of the date of

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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
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

SB1417 Enrolled - 24 - LRB096 07805 KTG 17908 b
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 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

SB1417 Enrolled - 25 - LRB096 07805 KTG 17908 b
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.
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

SB1417 Enrolled - 26 - LRB096 07805 KTG 17908 b
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:
(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

SB1417 Enrolled - 27 - LRB096 07805 KTG 17908 b
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.
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.

SB1417 Enrolled - 28 - LRB096 07805 KTG 17908 b
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
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

SB1417 Enrolled - 29 - LRB096 07805 KTG 17908 b
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
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

SB1417 Enrolled - 30 - LRB096 07805 KTG 17908 b
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; or
(13) to prevent or attempt to prevent any new motor
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.
(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

SB1417 Enrolled - 31 - LRB096 07805 KTG 17908 b
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.)
(815 ILCS 710/6) (from Ch. 121 1/2, par. 756)
Sec. 6. Warranty agreements; claims; approval; payment;
written disapproval.
(a) Every manufacturer, distributor, wholesaler,
distributor branch or division, factory branch or division, or
wholesale branch or division shall properly fulfill any
warranty agreement and adequately and fairly compensate each of

SB1417 Enrolled - 32 - LRB096 07805 KTG 17908 b
its motor vehicle dealers for labor and parts.
(b) In no event shall such compensation fail to include
reasonable compensation for diagnostic work, as well as repair
service, labor, and parts. Time allowances for the diagnosis
and performance of warranty work and service shall be
reasonable and adequate for the work to be performed. In the
determination of what constitutes reasonable compensation
under this Section, the principal factor to be given
consideration shall be the prevailing wage rates being paid by
the dealer in the relevant market area in which the motor
vehicle dealer is doing business, and in no event shall such
compensation of a motor vehicle dealer for warranty service be
less than the rates charged by such dealer for like service to
retail customers for nonwarranty service and repairs. The
franchiser shall reimburse the franchisee for any parts
provided in satisfaction of a warranty at the prevailing retail
price charged by that dealer for the same parts when not
provided in satisfaction of a warranty; provided that such
motor vehicle franchisee's prevailing retail price is not
unreasonable when compared with that of the holders of motor
vehicle franchises from the same motor vehicle franchiser for
identical merchandise in the geographic area in which the motor
vehicle franchisee is engaged in business. All claims, either
original or resubmitted, made by motor vehicle dealers
hereunder and under Section 5 for such labor and parts shall be
either approved or disapproved within 30 days following their

SB1417 Enrolled - 33 - LRB096 07805 KTG 17908 b
submission. All approved claims shall be paid within 30 days
following their approval. The motor vehicle dealer who submits
a claim which is disapproved shall be notified in writing of
the disapproval within the same period, and each such notice
shall state the specific grounds upon which the disapproval is
based. The motor vehicle dealer shall be permitted to correct
and resubmit such disapproved claims within 30 days of receipt
of disapproval. Any claims not specifically disapproved in
writing within 30 days from their submission shall be deemed
approved and payment shall follow within 30 days. The
manufacturer or franchiser shall have the right to require
reasonable documentation for claims and to audit such claims
within a one year period from the date the claim was paid or
credit issued by the manufacturer or franchiser, and to charge
back any false or unsubstantiated claims. The audit and charge
back provisions of this Section also apply to all other
incentive and reimbursement programs for a period of one year
18 months after the date the claim was paid or credit issued by
the manufacturer or franchiser of the transactions that are
subject to audit by the franchiser. However, the manufacturer
retains the right to charge back any fraudulent claim if the
manufacturer establishes in a court of competent jurisdiction
in this State that the claim is fraudulent.
(c) The motor vehicle franchiser shall not, by agreement,
by restrictions upon reimbursement, or otherwise, restrict the
nature and extent of services to be rendered or parts to be

SB1417 Enrolled - 34 - LRB096 07805 KTG 17908 b
provided so that such restriction prevents the motor vehicle
franchisee from satisfying the warranty by rendering services
in a good and workmanlike manner and providing parts which are
required in accordance with generally accepted standards. Any
such restriction shall constitute a prohibited practice.
(d) For the purposes of this Section, the "prevailing
retail price charged by that dealer for the same parts" means
the price paid by the motor vehicle franchisee for parts,
including all shipping and other charges, multiplied by the sum
of 1.0 and the franchisee's average percentage markup over the
price paid by the motor vehicle franchisee for parts purchased
by the motor vehicle franchisee from the motor vehicle
franchiser and sold at retail. The motor vehicle franchisee may
establish average percentage markup under this Section by
submitting to the motor vehicle franchiser 100 sequential
customer paid service repair orders or 90 days of customer paid
service repair orders, whichever is less, covering repairs made
no more than 180 days before the submission, and declaring what
the average percentage markup is. The average percentage markup
so declared shall go into effect 30 days following the
declaration, subject to audit of the submitted repair orders by
the motor vehicle franchiser and adjustment of the average
percentage markup based on that audit. Any audit must be
conducted within 30 days following the declaration. Only retail
sales not involving warranty repairs, parts covered by
subsection (e) of this Section, or parts supplied for routine

SB1417 Enrolled - 35 - LRB096 07805 KTG 17908 b
vehicle maintenance, shall be considered in calculating
average percentage markup. No motor vehicle franchiser shall
require a motor vehicle franchisee to establish average
percentage markup by a methodology, or by requiring
information, that is unduly burdensome or time consuming to
provide, including, but not limited to, part by part or
transaction by transaction calculations. A motor vehicle
franchisee shall not request a change in the average percentage
markup more than twice in one calendar year.
(e) If a motor vehicle franchiser supplies a part or parts
for use in a repair rendered under a warranty other than by
sale of that part or parts to the motor vehicle franchisee, the
motor vehicle franchisee shall be entitled to compensation
equivalent to the motor vehicle franchisee's average
percentage markup on the part or parts, as if the part or parts
had been sold to the motor vehicle franchisee by the motor
vehicle franchiser. The requirements of this subsection (e)
shall not apply to entire engine assemblies and entire
transmission assemblies. In the case of those assemblies, the
motor vehicle franchiser shall reimburse the motor vehicle
franchisee in the amount of 30% of what the motor vehicle
franchisee would have paid the motor vehicle franchiser for the
assembly if the assembly had not been supplied by the
franchiser other than by the sale of that assembly to the motor
vehicle franchisee.
(f) The obligations imposed on motor vehicle franchisers by

SB1417 Enrolled - 36 - LRB096 07805 KTG 17908 b
this Section shall apply to any parent, subsidiary, affiliate,
or agent of the motor vehicle franchiser, any person under
common ownership or control, any employee of the motor vehicle
franchiser, and any person holding 1% or more of the shares of
any class of securities or other ownership interest in the
motor vehicle franchiser, if a warranty or service or repair
plan is issued by that person instead of or in addition to one
issued by the motor vehicle franchiser.
(g) (1) Any motor vehicle franchiser and at least a
majority of its Illinois franchisees of the same line make may
agree in an express written contract citing this Section upon a
uniform warranty reimbursement policy used by contracting
franchisees to perform warranty repairs. The policy shall only
involve either reimbursement for parts used in warranty repairs
or the use of a Uniform Time Standards Manual, or both.
Reimbursement for parts under the agreement shall be used
instead of the franchisees' "prevailing retail price charged by
that dealer for the same parts" as defined in this Section to
calculate compensation due from the franchiser for parts used
in warranty repairs. This Section does not authorize a
franchiser and its Illinois franchisees to establish a uniform
hourly labor reimbursement.
Each franchiser shall only have one such agreement with
each line make. Any such agreement shall:
(A) Establish a uniform parts reimbursement rate. The
uniform parts reimbursement rate shall be greater than the

SB1417 Enrolled - 37 - LRB096 07805 KTG 17908 b
franchiser's nationally established parts reimbursement
rate in effect at the time the first such agreement becomes
effective; however, any subsequent agreement shall result
in a uniform reimbursement rate that is greater or equal to
the rate set forth in the immediately prior agreement.
(B) Apply to all warranty repair orders written during
the period that the agreement is effective.
(C) Be available, during the period it is effective, to
any motor vehicle franchisee of the same line make at any
time and on the same terms.
(D) Be for a term not to exceed 3 years so long as any
party to the agreement may terminate the agreement upon the
annual anniversary of the agreement and with 30 days' prior
written notice; however, the agreement shall remain in
effect for the term of the agreement regardless of the
number of dealers of the same line make that may terminate
the agreement.
(2) A franchiser that enters into an agreement with its
franchisees pursuant to paragraph (1) of this subsection (g)
may seek to recover its costs from only those franchisees that
are receiving their "prevailing retail price charged by that
dealer" under subsections (a) through (f) of this Section,
subject to the following requirements:
(A) "costs" means the difference between the uniform
reimbursement rate set forth in an agreement entered into
pursuant to paragraph (1) of this subsection (g) and the

SB1417 Enrolled - 38 - LRB096 07805 KTG 17908 b
"prevailing retail price charged by that dealer" received
by those franchisees of the same line make. "Costs" do not
include the following: legal fees or expenses;
administrative expenses; a profit mark-up; or any other
item;
(B) the costs shall be recovered only by increasing the
invoice price on new vehicles received by those
franchisees; and
(C) price increases imposed for the purpose of
recovering costs imposed by this Section may vary from time
to time and from model to model, but shall apply uniformly
to all franchisees of the same line make in the State of
Illinois that have requested reimbursement for warranty
repairs at their "prevailing retail price charged by that
dealer", except that a franchiser may make an exception for
vehicles that are titled in the name of a consumer in
another state.
(3) If a franchiser contracts with its Illinois dealers
pursuant to paragraph (1) of this subsection (g), the
franchiser shall certify under oath to the Motor Vehicle Review
Board that a majority of the franchisees of that line make did
agree to such an agreement and file a sample copy of the
agreement. On an annual basis, each franchiser shall certify
under oath to the Motor Vehicle Review Board that the
reimbursement costs it recovers under paragraph (2) of this
subsection (g) do not exceed the amounts authorized by

SB1417 Enrolled - 39 - LRB096 07805 KTG 17908 b
paragraph (2) of this subsection (g). The franchiser shall
maintain for a period of 3 years a file that contains the
information upon which its certification is based.
(3.1) A franchiser subject to subdivision (g)(2) of this
Section, upon request of a dealer subject to that subdivision,
shall disclose to the dealer, in writing or in person if
requested by the dealer, the method by which the franchiser
calculated the amount of the costs to be reimbursed by the
dealer. The franchiser shall also provide aggregate data
showing (i) the total costs the franchiser incurred and (ii)
the total number of new vehicles invoiced to each dealer that
received the "prevailing retail price charged by that dealer"
during the relevant period of time. In responding to a dealer's
request under this subdivision (g)(3.1), a franchiser may not
disclose any confidential or competitive information regarding
any other dealer. Any dealer who receives information from a
franchiser under this subdivision (g)(3.1) may not disclose
that information to any third party unless the disclosure
occurs in the course of a lawful proceeding before, or upon the
order of, the Motor Vehicle Review Board or a court of
competent jurisdiction.
(4) If a franchiser and its franchisees do not enter into
an agreement pursuant to paragraph (1) of this subsection (g),
and for any matter that is not the subject of an agreement,
this subsection (g) shall have no effect whatsoever.
(5) For purposes of this subsection (g), a Uniform Time

SB1417 Enrolled - 40 - LRB096 07805 KTG 17908 b
Standard Manual is a document created by a franchiser that
establishes the time allowances for the diagnosis and
performance of warranty work and service. The allowances shall
be reasonable and adequate for the work and service to be
performed. Each franchiser shall have a reasonable and fair
process that allows a franchisee to request a modification or
adjustment of a standard or standards included in such a
manual.
(6) A franchiser may not take any adverse action against a
franchisee for not having executed an agreement contemplated by
this subsection (g) or for receiving the "prevailing retail
price charged by that dealer". Nothing in this subsection shall
be construed to prevent a franchiser from making a
determination of a franchisee's "prevailing retail price
charged by that dealer", as provided by this Section.
(Source: P.A. 94-882, eff. 6-20-06.)
(815 ILCS 710/9) (from Ch. 121 1/2, par. 759)
Sec. 9. Renewals; transfers.
(a) Anything to the contrary notwithstanding, it shall be
unlawful for the manufacturer, wholesaler, distributor or
franchiser without good cause, to fail to renew a franchise on
terms then equally available to all its motor vehicle dealers,
or to terminate a franchise or restrict the transfer of a
franchise until the franchisee shall receive fair and
reasonable compensation for the value of the business and

SB1417 Enrolled - 41 - LRB096 07805 KTG 17908 b
business premises.
(b) For the purposes of this Section 9, the term
"reasonable compensation" includes, but is not limited to all
of the following items:
(1) An amount equal to the current, fair rental value
of the portion of the motor vehicle dealer's established
place of business that is used for motor vehicle sales and
service with the manufacturer, wholesaler, distributor or
franchiser for a period of one year beginning on the date
of the nonrenewal, termination, or restriction on the
transfer of the franchise.
(2) The franchisee's cost of each new undamaged and
unsold current and prior year motor vehicles that were
acquired within 12 months of termination and have 500 or
fewer miles recorded on the odometer that are in the
franchisee's inventory at the time of nonrenewal,
termination, or restriction and that were purchased or
acquired from the manufacturer or from another dealer of
the same line make in the ordinary course of business.
(3) The franchisee's cost of each new, unused,
undamaged, and unsold part or accessory that is in the
current parts catalogue or is identical to a part or
accessory in the current parts catalogue except for the
number assigned to the part or accessory due to a change in
the number after the purchase of the part or accessory and
that is still in the original, resalable merchandising

SB1417 Enrolled - 42 - LRB096 07805 KTG 17908 b
package and in an unbroken lot, except that, in the case of
sheet metal, a comparable substitute for the original
package may be used if the part or accessory was purchased
(i) directly from the manufacturer, distributor,
wholesaler, distributor branch or division, or officer,
agent, or other representative thereof or (ii) from an
outgoing authorized dealer as a part of the dealer's
initial inventory.
(4) The fair market value of each undamaged sign owned
by the dealer that bears a trademark or trade name used or
claimed by the manufacturer, distributor, wholesaler,
distributor branch or division, or officer, agent, or other
representative thereof that was purchased as a requirement
of the manufacturer, distributor, wholesaler, distributor
branch or division, or officer, agent, or other
representative thereof.
(5) The fair market value of all special tools, data
processing equipment, and automotive service equipment
owned by the dealer that (i) were recommended in writing
and designated as special tools and equipment, (ii) were
purchased at the request of the manufacturer, distributor,
wholesaler, distributor branch or division, or officer,
agent, or other representative thereof, and (iii) are in
usable and good condition except for reasonable wear and
tear.
(6) The cost of transporting, handling, packing,

SB1417 Enrolled - 43 - LRB096 07805 KTG 17908 b
storing, and loading any property that is subject to
repurchase under this Section.
This subsection (b) shall not apply to a non-renewal or
termination that is implemented as a result of a sale of the
assets or stock of the franchise.
(c) The payment under item (b)(1) is due in 12 equal,
monthly installments, beginning 30 days after the franchise is
terminated or nonrenewed. The payments under items (b)(2)
through (b)(6) are due no later than 90 days after the
franchise is terminated or nonrenewed. As a condition of
payment under items (b)(2) through (b)(6), the motor vehicle
dealer must comply with all reasonable requirements provided by
the manufacturer, distributor, or wholesaler regarding the
return of inventory.
If a manufacturer, distributor, or wholesaler does not
reimburse the motor vehicle dealer for the amounts required
under items (b)(2) through (b)(6) by the deadlines under this
subsection (c), and the Board or, if agreed to under Section
12, the arbitrator, finds the manufacturer, distributor, or
wholesaler in violation of this subsection, then the
manufacturer, distributor, or wholesaler shall, in addition to
any other amounts due, pay the motor vehicle dealer:
(1) interest on the amount due at a rate reasonable in
light of commercial practices, determined by the Board or
arbitrator; and
(2) reasonable attorney's fees and costs.

SB1417 Enrolled - 44 - LRB096 07805 KTG 17908 b
(3) reasonable attorney's fees and costs.
(Source: P.A. 83-922.)
(815 ILCS 710/9.5 new)
Sec. 9.5. Termination with good cause.
(a) Anything to the contrary notwithstanding, if a
manufacturer, wholesaler, distributor, or franchiser, with
good cause, (i) fails to renew a franchise on terms then
equally available to all of its motor vehicle dealers, (ii)
terminates a franchise, or (iii) restricts the transfer of a
franchise, the manufacturer, wholesaler, distributor or
franchiser shall pay to the franchisee all of the following,
including, but not limited to:
(1) Upon termination, cancellation, or nonrenewal of a
line make or upon termination, cancellation, or nonrenewal
due to a dealer's poor sales and service performance
pursuant to notice provided under Section 4(d)(6), an
amount equal to the current, fair rental value of the
portion of the motor vehicle dealer's established place of
business that is used for motor vehicle sales and service
with the manufacturer, wholesaler, distributor or
franchiser for a period of one year beginning on the date
of the nonrenewal, termination, or restriction on the
transfer of the franchise.
(2) The franchisee's cost of each new undamaged and
unsold current and prior model year motor vehicles that

SB1417 Enrolled - 45 - LRB096 07805 KTG 17908 b
were acquired within 12 months of termination and have 500
or fewer miles recorded on the odometer in the franchisee's
inventory at the time of nonrenewal, termination, or
restriction and that were purchased or acquired from the
manufacturer or from another motor vehicle dealer of the
same line make in the ordinary course of business.
(3) The franchisee's cost of each new, unused,
undamaged, and unsold part or accessory that is in the
current parts catalogue or is identical to a part or
accessory in the current parts catalogue except for a
number assigned to the part or accessory due to a change in
the number after the purchase of the part or accessory and
that is still in the original, resalable merchandising
package and in an unbroken lot, except that, in the case of
sheet metal, a comparable substitute for the original
package may be used if the part or accessory was purchased
(i) directly from the manufacturer, distributor,
wholesaler, distributor branch or division, or officer,
agent, or other representative thereof or (ii) from an
outgoing authorized dealer as a part of the dealer's
initial inventory.
(4) The fair market value of each undamaged sign owned
by the dealer that bears a trademark or trade name used or
claimed by the manufacturer, distributor, wholesaler,
distributor branch, or division, or officer, agent, or
other representative thereof that was purchased as a

SB1417 Enrolled - 46 - LRB096 07805 KTG 17908 b
requirement of the manufacturer, distributor, wholesaler,
distributor branch, or division, or officer, agent, or
other representative thereof.
(5) The fair market value of all special tools, data
processing equipment, and automotive service equipment
owned by the dealer that (i) were recommended in writing
and designated as special tools and equipment, (ii) were
purchased at the request of the manufacturer, distributor,
wholesaler, distributor branch or division, or officer,
agent, or other representative thereof, and (iii) are in
usable and good condition except for reasonable wear and
tear.
(b) The payment under item (a)(1) is due in 12 equal,
monthly installments, beginning 30 days after the franchise is
terminated or nonrenewed. The payments under items (a)(2)
through (a)(5) are due no later than 90 days after the
franchise is terminated or nonrenewed. As a condition of
payment under items (a)(2) through (a)(5) the motor vehicle
dealer must comply with all reasonable requirements provided by
the manufacturer, distributor, or wholesaler regarding the
return of inventory.
If a manufacturer, distributor, or wholesaler does not
reimburse the motor vehicle dealer for the amounts required
under items (a)(2) through (a)(6) by the deadlines under this
subsection (b), then the manufacturer, distributor, or
wholesaler shall, in addition to any amounts due, pay the motor

SB1417 Enrolled - 47 - LRB096 07805 KTG 17908 b
vehicle dealer:
(1) interest on the amount due at a rate reasonable in
light of commercial practices, determined by the Board or
arbitrator; and
(2) reasonable attorney's fees and costs.
(c) This Section does not apply to a termination or
nonrenewal that is implemented as a result of the sale of the
assets or stock of the franchise.
Section 99. Effective date. This Act takes effect upon
becoming law.