Bill Text: IL SB1687 | 2017-2018 | 100th General Assembly | Enrolled


Bill Title: Amends the Motor Vehicle Franchise Act. Provides additional findings that the regulation of motor vehicle manufacturers creates a system for servicing vehicles and complying with warranties. Provides that paying manufacturer's and distributor's fees under the Illinois Vehicle Code constitutes agreement with the terms of the Motor Vehicle Franchise Act. Limits the ability of a manufacturer to penalize a dealer if a customer resells or exports a vehicle. Limits a manufacturer from requiring dealer improvements or requiring that dealers use specific vendors for improvements. Effective immediately.

Spectrum: Bipartisan Bill

Status: (Enrolled) 2017-05-31 - Passed Both Houses [SB1687 Detail]

Download: Illinois-2017-SB1687-Enrolled.html



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1 AN ACT concerning business.
2 Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4 Section 5. The Motor Vehicle Franchise Act is amended by
5changing Sections 1.1, 2, 4, and 12 as follows:
6 (815 ILCS 710/1.1) (from Ch. 121 1/2, par. 751.1)
7 Sec. 1.1. Declaration of purpose. The Legislature finds and
8declares that the distribution and sale of vehicles within this
9State vitally affects the general economy of the State and the
10public interest, and welfare, and safety and that in order to
11promote the public interest, and welfare, and safety, and in
12the exercise of its police power, it is necessary to regulate
13motor vehicle manufacturers, distributors, wholesalers and
14factory or distributor branches or representatives, and to
15regulate dealers of motor vehicles doing business in this State
16in order to prevent frauds, impositions, discrimination, and
17other abuses upon its citizens, to protect and preserve the
18investments and properties of the citizens of this State, to
19foster healthy competition, and to provide adequate and
20sufficient service to consumers generally. The licensing and
21supervision of motor vehicle dealers is necessary for the
22protection of consumers and the sale of motor vehicles by
23unlicensed dealers should be prevented.

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1 The Legislature further finds that the regulation of motor
2vehicle manufacturers, distributors, wholesalers, factory
3branches, distributor branches and representatives, and
4dealers promotes the distribution of motor vehicles to the
5public and provides a system for servicing vehicles and for
6complying with manufacturer warranties so that consumers can
7keep their motor vehicles properly functioning and safe. The
8sale and distribution of motor vehicles constitutes a
9continuing obligation of manufacturers, distributors,
10wholesalers, factory branches, distributor branches and
11representatives, and dealers to consumers, and the public has
12an interest in promoting the availability of post-sale
13mechanical and operational services.
14(Source: P.A. 83-922.)
15 (815 ILCS 710/2) (from Ch. 121 1/2, par. 752)
16 Sec. 2. Definitions. As used in this Act, the following
17words shall, unless the context otherwise requires, have the
18following meanings:
19 (a) "Motor vehicle", any motor driven vehicle required to
20be registered under "The Illinois Vehicle Code". Beginning
21January 1, 2010, the term "motor vehicle" also includes any
22engine, transmission, or rear axle, regardless of whether it is
23attached to a vehicle chassis, that is manufactured for
24installation in any motor-driven vehicle with a gross vehicle
25weight rating of more than 16,000 pounds that is required to be

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1registered under the Illinois Vehicle Code.
2 (b) "Manufacturer", any person engaged in the business of
3manufacturing or assembling new and unused motor vehicles.
4"Manufacturer" includes a factory branch, distributor, and
5distributor branch.
6 (c) "Factory branch", a branch office maintained by a
7manufacturer which manufactures or assembles motor vehicles
8for sale to distributors or motor vehicle dealers or which is
9maintained for directing and supervising the representatives
10of the manufacturer.
11 (d) "Distributor branch", a branch office maintained by a
12distributor or wholesaler who or which sells or distributes new
13or used motor vehicles to motor vehicle dealers.
14 (e) "Factory representative", a representative employed by
15a manufacturer or employed by a factory branch for the purpose
16of making or promoting the sale of motor vehicles or for
17contracting with, supervising, servicing or instructing motor
18vehicle dealers or prospective motor vehicle dealers.
19 (f) "Distributor representative", a representative
20employed by a distributor branch, distributor or wholesaler.
21 (g) "Distributor" or "wholesaler", any person who sells or
22distributes new or used motor vehicles to motor vehicle dealers
23or who maintains distributor representatives within the State.
24 (h) "Motor vehicle dealer", any person who, in the ordinary
25course of business, is engaged in the business of selling new
26or used motor vehicles to consumers or other end users.

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1 (i) "Franchise", an oral or written arrangement for a
2definite or indefinite period in which a manufacturer,
3distributor or wholesaler grants to a motor vehicle dealer a
4license to use a trade name, service mark, or related
5characteristic, and in which there is a community of interest
6in the marketing of motor vehicles or services related thereto
7at wholesale, retail, leasing or otherwise.
8 (j) "Franchiser", a manufacturer, distributor or
9wholesaler who grants a franchise to a motor vehicle dealer.
10 (k) "Franchisee", a motor vehicle dealer to whom a
11franchise is offered or granted.
12 (l) "Sale", shall include the issuance, transfer,
13agreement for transfer, exchange, pledge, hypothecation,
14mortgage in any form, whether by transfer in trust or
15otherwise, of any motor vehicle or interest therein or of any
16franchise related thereto; and any option, subscription or
17other contract or solicitation, looking to a sale, or offer or
18attempt to sell in any form, whether oral or written. A gift or
19delivery of any motor vehicle or franchise with respect thereto
20with or as a bonus on account of the sale of anything shall be
21deemed a sale of such motor vehicle or franchise.
22 (m) "Fraud", shall include, in addition to its normal legal
23connotation, the following: a misrepresentation in any manner,
24whether intentionally false or due to reckless disregard for
25truth or falsity, of a material fact; a promise or
26representation not made honestly and in good faith; and an

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1intentional failure to disclose a material fact.
2 (n) "Person", a natural person, corporation, partnership,
3trust or other entity, and in case of an entity, it shall
4include any other entity in which it has a majority interest or
5which it effectively controls as well as the individual
6officers, directors and other persons in active control of the
7activities of each such entity.
8 (o) "New motor vehicle", a motor vehicle which has not been
9previously sold to any person except a distributor or
10wholesaler or motor vehicle dealer for resale.
11 (p) "Market Area", the franchisee's area of primary
12responsibility as defined in its franchise.
13 (q) "Relevant Market Area", the area within a radius of 10
14miles from the principal location of a franchise or dealership
15if said principal location is in a county having a population
16of more than 300,000 persons; if the principal location of a
17franchise or dealership is in a county having a population of
18less than 300,000 persons, then "relevant market area" shall
19mean the area within a radius of 15 miles from the principal
20location of said franchise or dealership.
21 (r) "Late model vehicle" means a vehicle of the current
22model year and one, 2, or 3 preceding model years for which the
23motor vehicle dealer holds an existing franchise from the
24manufacturer for that same line make.
25 (s) "Factory repurchase vehicle" means a motor vehicle of
26the current model year or a late model vehicle reacquired by

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1the manufacturer under an existing agreement or otherwise from
2a fleet, lease or daily rental company or under any State or
3federal law or program relating to allegedly defective new
4motor vehicles, and offered for sale and resold by the
5manufacturer directly or at a factory authorized or sponsored
6auction.
7 (t) "Board" means the Motor Vehicle Review Board created
8under this Act.
9 (u) "Secretary of State" means the Secretary of State of
10Illinois.
11 (v) "Good cause" means facts establishing commercial
12reasonableness in lawful or privileged competition and
13business practices as defined at common law.
14(Source: P.A. 95-678, eff. 10-11-07; 96-11, eff. 5-22-09.)
15 (815 ILCS 710/4) (from Ch. 121 1/2, par. 754)
16 Sec. 4. Unfair competition and practices.
17 (a) The unfair methods of competition and unfair and
18deceptive acts or practices listed in this Section are hereby
19declared to be unlawful. In construing the provisions of this
20Section, the courts may be guided by the interpretations of the
21Federal Trade Commission Act (15 U.S.C. 45 et seq.), as from
22time to time amended.
23 (b) It shall be deemed a violation for any manufacturer,
24factory branch, factory representative, distributor or
25wholesaler, distributor branch, distributor representative or

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1motor vehicle dealer to engage in any action with respect to a
2franchise which is arbitrary, in bad faith or unconscionable
3and which causes damage to any of the parties or to the public.
4 (c) It shall be deemed a violation for a manufacturer, a
5distributor, a wholesaler, a distributor branch or division, a
6factory branch or division, or a wholesale branch or division,
7or officer, agent or other representative thereof, to coerce,
8or attempt to coerce, any motor vehicle dealer:
9 (1) to accept, buy or order any motor vehicle or
10 vehicles, appliances, equipment, parts or accessories
11 therefor, or any other commodity or commodities or service
12 or services which such motor vehicle dealer has not
13 voluntarily ordered or requested except items required by
14 applicable local, state or federal law; or to require a
15 motor vehicle dealer to accept, buy, order or purchase such
16 items in order to obtain any motor vehicle or vehicles or
17 any other commodity or commodities which have been ordered
18 or requested by such motor vehicle dealer;
19 (2) to order or accept delivery of any motor vehicle
20 with special features, appliances, accessories or
21 equipment not included in the list price of the motor
22 vehicles as publicly advertised by the manufacturer
23 thereof, except items required by applicable law; or
24 (3) to order for anyone any parts, accessories,
25 equipment, machinery, tools, appliances or any commodity
26 whatsoever, except items required by applicable law.

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1 (d) It shall be deemed a violation for a manufacturer, a
2distributor, a wholesaler, a distributor branch or division, or
3officer, agent or other representative thereof:
4 (1) to adopt, change, establish or implement a plan or
5 system for the allocation and distribution of new motor
6 vehicles to motor vehicle dealers which is arbitrary or
7 capricious or to modify an existing plan so as to cause the
8 same to be arbitrary or capricious;
9 (2) to fail or refuse to advise or disclose to any
10 motor vehicle dealer having a franchise or selling
11 agreement, upon written request therefor, the basis upon
12 which new motor vehicles of the same line make are
13 allocated or distributed to motor vehicle dealers in the
14 State and the basis upon which the current allocation or
15 distribution is being made or will be made to such motor
16 vehicle dealer;
17 (3) to refuse to deliver in reasonable quantities and
18 within a reasonable time after receipt of dealer's order,
19 to any motor vehicle dealer having a franchise or selling
20 agreement for the retail sale of new motor vehicles sold or
21 distributed by such manufacturer, distributor, wholesaler,
22 distributor branch or division, factory branch or division
23 or wholesale branch or division, any such motor vehicles as
24 are covered by such franchise or selling agreement
25 specifically publicly advertised in the State by such
26 manufacturer, distributor, wholesaler, distributor branch

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1 or division, factory branch or division, or wholesale
2 branch or division to be available for immediate delivery.
3 However, the failure to deliver any motor vehicle shall not
4 be considered a violation of this Act if such failure is
5 due to an act of God, a work stoppage or delay due to a
6 strike or labor difficulty, a shortage of materials, a lack
7 of manufacturing capacity, a freight embargo or other cause
8 over which the manufacturer, distributor, or wholesaler,
9 or any agent thereof has no control;
10 (4) to coerce, or attempt to coerce, any motor vehicle
11 dealer to enter into any agreement with such manufacturer,
12 distributor, wholesaler, distributor branch or division,
13 factory branch or division, or wholesale branch or
14 division, or officer, agent or other representative
15 thereof, or to do any other act prejudicial to the dealer
16 by threatening to reduce his allocation of motor vehicles
17 or cancel any franchise or any selling agreement existing
18 between such manufacturer, distributor, wholesaler,
19 distributor branch or division, or factory branch or
20 division, or wholesale branch or division, and the dealer.
21 However, notice in good faith to any motor vehicle dealer
22 of the dealer's violation of any terms or provisions of
23 such franchise or selling agreement or of any law or
24 regulation applicable to the conduct of a motor vehicle
25 dealer shall not constitute a violation of this Act;
26 (5) to require a franchisee to participate in an

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1 advertising campaign or contest or any promotional
2 campaign, or to purchase or lease any promotional
3 materials, training materials, show room or other display
4 decorations or materials at the expense of the franchisee;
5 (6) to cancel or terminate the franchise or selling
6 agreement of a motor vehicle dealer without good cause and
7 without giving notice as hereinafter provided; to fail or
8 refuse to extend the franchise or selling agreement of a
9 motor vehicle dealer upon its expiration without good cause
10 and without giving notice as hereinafter provided; or, to
11 offer a renewal, replacement or succeeding franchise or
12 selling agreement containing terms and provisions the
13 effect of which is to substantially change or modify the
14 sales and service obligations or capital requirements of
15 the motor vehicle dealer arbitrarily and without good cause
16 and without giving notice as hereinafter provided
17 notwithstanding any term or provision of a franchise or
18 selling agreement.
19 (A) If a manufacturer, distributor, wholesaler,
20 distributor branch or division, factory branch or
21 division or wholesale branch or division intends to
22 cancel or terminate a franchise or selling agreement or
23 intends not to extend or renew a franchise or selling
24 agreement on its expiration, it shall send a letter by
25 certified mail, return receipt requested, to the
26 affected franchisee at least 60 days before the

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1 effective date of the proposed action, or not later
2 than 10 days before the proposed action when the reason
3 for the action is based upon either of the following:
4 (i) the business operations of the franchisee
5 have been abandoned or the franchisee has failed to
6 conduct customary sales and service operations
7 during customary business hours for at least 7
8 consecutive business days unless such closing is
9 due to an act of God, strike or labor difficulty or
10 other cause over which the franchisee has no
11 control; or
12 (ii) the conviction of or plea of nolo
13 contendere by the motor vehicle dealer or any
14 operator thereof in a court of competent
15 jurisdiction to an offense punishable by
16 imprisonment for more than two years.
17 Each notice of proposed action shall include a
18 detailed statement setting forth the specific grounds
19 for the proposed cancellation, termination, or refusal
20 to extend or renew and shall state that the dealer has
21 only 30 days from receipt of the notice to file with
22 the Motor Vehicle Review Board a written protest
23 against the proposed action.
24 (B) If a manufacturer, distributor, wholesaler,
25 distributor branch or division, factory branch or
26 division or wholesale branch or division intends to

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1 change substantially or modify the sales and service
2 obligations or capital requirements of a motor vehicle
3 dealer as a condition to extending or renewing the
4 existing franchise or selling agreement of such motor
5 vehicle dealer, it shall send a letter by certified
6 mail, return receipt requested, to the affected
7 franchisee at least 60 days before the date of
8 expiration of the franchise or selling agreement. Each
9 notice of proposed action shall include a detailed
10 statement setting forth the specific grounds for the
11 proposed action and shall state that the dealer has
12 only 30 days from receipt of the notice to file with
13 the Motor Vehicle Review Board a written protest
14 against the proposed action.
15 (C) Within 30 days from receipt of the notice under
16 subparagraphs (A) and (B), the franchisee may file with
17 the Board a written protest against the proposed
18 action.
19 When the protest has been timely filed, the Board
20 shall enter an order, fixing a date (within 60 days of
21 the date of the order), time, and place of a hearing on
22 the protest required under Sections 12 and 29 of this
23 Act, and send by certified mail, return receipt
24 requested, a copy of the order to the manufacturer that
25 filed the notice of intention of the proposed action
26 and to the protesting dealer or franchisee.

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1 The manufacturer shall have the burden of proof to
2 establish that good cause exists to cancel or
3 terminate, or fail to extend or renew the franchise or
4 selling agreement of a motor vehicle dealer or
5 franchisee, and to change substantially or modify the
6 sales and service obligations or capital requirements
7 of a motor vehicle dealer as a condition to extending
8 or renewing the existing franchise or selling
9 agreement. The determination whether good cause exists
10 to cancel, terminate, or refuse to renew or extend the
11 franchise or selling agreement, or to change or modify
12 the obligations of the dealer as a condition to offer
13 renewal, replacement, or succession shall be made by
14 the Board under subsection (d) of Section 12 of this
15 Act.
16 (D) Notwithstanding the terms, conditions, or
17 provisions of a franchise or selling agreement, the
18 following shall not constitute good cause for
19 cancelling or terminating or failing to extend or renew
20 the franchise or selling agreement: (i) the change of
21 ownership or executive management of the franchisee's
22 dealership; or (ii) the fact that the franchisee or
23 owner of an interest in the franchise owns, has an
24 investment in, participates in the management of, or
25 holds a license for the sale of the same or any other
26 line make of new motor vehicles.

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1 (E) The manufacturer may not cancel or terminate,
2 or fail to extend or renew a franchise or selling
3 agreement or change or modify the obligations of the
4 franchisee as a condition to offering a renewal,
5 replacement, or succeeding franchise or selling
6 agreement before the hearing process is concluded as
7 prescribed by this Act, and thereafter, if the Board
8 determines that the manufacturer has failed to meet its
9 burden of proof and that good cause does not exist to
10 allow the proposed action;
11 (7) notwithstanding the terms of any franchise
12 agreement, to fail to indemnify and hold harmless its
13 franchised dealers against any judgment or settlement for
14 damages, including, but not limited to, court costs, expert
15 witness fees, reasonable attorneys' fees of the new motor
16 vehicle dealer, and other expenses incurred in the
17 litigation, so long as such fees and costs are reasonable,
18 arising out of complaints, claims or lawsuits including,
19 but not limited to, strict liability, negligence,
20 misrepresentation, warranty (express or implied), or
21 rescission recision of the sale as defined in Section 2-608
22 of the Uniform Commercial Code, to the extent that the
23 judgment or settlement relates to the alleged defective or
24 negligent manufacture, assembly or design of new motor
25 vehicles, parts or accessories or other functions by the
26 manufacturer, beyond the control of the dealer; provided

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1 that, in order to provide an adequate defense, the
2 manufacturer receives notice of the filing of a complaint,
3 claim, or lawsuit within 60 days after the filing;
4 (8) to require or otherwise coerce a motor vehicle
5 dealer to underutilize the motor vehicle dealer's
6 facilities by requiring or otherwise coercing the motor
7 vehicle dealer to exclude or remove from the motor vehicle
8 dealer's facilities operations for selling or servicing of
9 any vehicles for which the motor vehicle dealer has a
10 franchise agreement with another manufacturer,
11 distributor, wholesaler, distribution branch or division,
12 or officer, agent, or other representative thereof;
13 provided, however, that, in light of all existing
14 circumstances, (i) the motor vehicle dealer maintains a
15 reasonable line of credit for each make or line of new
16 motor vehicle, (ii) the new motor vehicle dealer remains in
17 compliance with any reasonable facilities requirements of
18 the manufacturer, (iii) no change is made in the principal
19 management of the new motor vehicle dealer, and (iv) the
20 addition of the make or line of new motor vehicles would be
21 reasonable. The reasonable facilities requirement set
22 forth in item (ii) of subsection (d)(8) shall not include
23 any requirement that a franchisee establish or maintain
24 exclusive facilities, personnel, or display space. Any
25 decision by a motor vehicle dealer to sell additional makes
26 or lines at the motor vehicle dealer's facility shall be

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1 presumed to be reasonable, and the manufacturer shall have
2 the burden to overcome that presumption. A motor vehicle
3 dealer must provide a written notification of its intent to
4 add a make or line of new motor vehicles to the
5 manufacturer. If the manufacturer does not respond to the
6 motor vehicle dealer, in writing, objecting to the addition
7 of the make or line within 60 days after the date that the
8 motor vehicle dealer sends the written notification, then
9 the manufacturer shall be deemed to have approved the
10 addition of the make or line; or
11 (9) to use or consider the performance of a motor
12 vehicle dealer relating to the sale of the manufacturer's,
13 distributor's, or wholesaler's vehicles or the motor
14 vehicle dealer's ability to satisfy any minimum sales or
15 market share quota or responsibility relating to the sale
16 of the manufacturer's, distributor's, or wholesaler's new
17 vehicles in determining:
18 (A) the motor vehicle dealer's eligibility to
19 purchase program, certified, or other used motor
20 vehicles from the manufacturer, distributor, or
21 wholesaler;
22 (B) the volume, type, or model of program,
23 certified, or other used motor vehicles that a motor
24 vehicle dealer is eligible to purchase from the
25 manufacturer, distributor, or wholesaler;
26 (C) the price of any program, certified, or other

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1 used motor vehicle that the dealer is eligible to
2 purchase from the manufacturer, distributor, or
3 wholesaler; or
4 (D) the availability or amount of any discount,
5 credit, rebate, or sales incentive that the dealer is
6 eligible to receive from the manufacturer,
7 distributor, or wholesaler for the purchase of any
8 program, certified, or other used motor vehicle
9 offered for sale by the manufacturer, distributor, or
10 wholesaler; .
11 (10) to take any adverse action against a dealer
12 pursuant to an export or sale-for-resale prohibition
13 because the dealer sold or leased a vehicle to a customer
14 who either exported the vehicle to a foreign country or
15 resold the vehicle in violation of the prohibition, unless
16 the export or sale-for-resale prohibition policy was
17 provided to the dealer in writing either electronically or
18 on paper, prior to the sale or lease, and the dealer knew
19 or reasonably should have known of the customer's intent to
20 export or resell the vehicle in violation of the
21 prohibition at the time of the sale or lease. If the dealer
22 causes the vehicle to be registered and titled in this or
23 any other state, and collects or causes to be collected any
24 applicable sales or use tax to this State, a rebuttable
25 presumption is established that the dealer did not have
26 reason to know of the customer's intent to resell the

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1 vehicle;
2 (11) to coerce or require any dealer to construct
3 improvements to his or her facilities or to install new
4 signs or other franchiser image elements that replace or
5 substantially alter those improvements, signs, or
6 franchiser image elements completed within the past 10
7 years that were required and approved by the manufacturer
8 or one of its affiliates. The 10-year period under this
9 paragraph (11) begins to run for a dealer, including that
10 dealer's successors and assigns, on the date that the
11 manufacturer gives final written approval of the facility
12 improvements or installation of signs or other franchiser
13 image elements or the date that the dealer receives a
14 certificate of occupancy, whichever is later. For the
15 purpose of this paragraph (11), the term "substantially
16 alter" does not include routine maintenance, including,
17 but not limited to, interior painting, that is reasonably
18 necessary to keep a dealer facility in attractive
19 condition; or
20 (12) to require a dealer to purchase goods or services
21 to make improvements to the dealer's facilities from a
22 vendor selected, identified, or designated by a
23 manufacturer or one of its affiliates by agreement,
24 program, incentive provision, or otherwise without making
25 available to the dealer the option to obtain the goods or
26 services of substantially similar quality and overall

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1 design from a vendor chosen by the dealer and approved by
2 the manufacturer; however, approval by the manufacturer
3 shall not be unreasonably withheld, and the dealer's option
4 to select a vendor shall not be available if the
5 manufacturer provides substantial reimbursement for the
6 goods or services offered. "Substantial reimbursement"
7 means an amount equal to or greater than the cost savings
8 that would result if the dealer were to utilize a vendor of
9 the dealer's own selection instead of using the vendor
10 identified by the manufacturer. For the purpose of this
11 paragraph (12), the term "goods" does not include movable
12 displays, brochures, and promotional materials containing
13 material subject to the intellectual property rights of a
14 manufacturer. If signs, other than signs containing the
15 manufacturer's brand or logo or free-standing signs that
16 are not directly attached to a building, or other
17 franchiser image or design elements or trade dress are to
18 be leased to the dealer by a vendor selected, identified,
19 or designated by the manufacturer, the dealer has the right
20 to purchase the signs or other franchiser image or design
21 elements or trade dress of substantially similar quality
22 and design from a vendor selected by the dealer if the
23 signs, franchiser image or design elements, or trade dress
24 are approved by the manufacturer. Approval by the
25 manufacturer shall not be unreasonably withheld. This
26 paragraph (12) shall not be construed to allow a dealer or

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1 vendor to impair, infringe upon, or eliminate, directly or
2 indirectly, the intellectual property rights of the
3 manufacturer including, but not limited to, the
4 manufacturer's intellectual property rights in any
5 trademarks or trade dress, or other intellectual property
6 interests owned or controlled by the manufacturer. This
7 paragraph (12) shall not be construed to permit a dealer to
8 erect or maintain signs that do not conform to the
9 manufacturer's intellectual property rights or trademark
10 or trade dress usage guidelines.
11 (e) It shall be deemed a violation for a manufacturer, a
12distributor, a wholesaler, a distributor branch or division or
13officer, agent or other representative thereof:
14 (1) to resort to or use any false or misleading
15 advertisement in connection with his business as such
16 manufacturer, distributor, wholesaler, distributor branch
17 or division or officer, agent or other representative
18 thereof;
19 (2) to offer to sell or lease, or to sell or lease, any
20 new motor vehicle to any motor vehicle dealer at a lower
21 actual price therefor than the actual price offered to any
22 other motor vehicle dealer for the same model vehicle
23 similarly equipped or to utilize any device including, but
24 not limited to, sales promotion plans or programs which
25 result in such lesser actual price or fail to make
26 available to any motor vehicle dealer any preferential

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1 pricing, incentive, rebate, finance rate, or low interest
2 loan program offered to competing motor vehicle dealers in
3 other contiguous states. However, the provisions of this
4 paragraph shall not apply to sales to a motor vehicle
5 dealer for resale to any unit of the United States
6 Government, the State or any of its political subdivisions;
7 (3) to offer to sell or lease, or to sell or lease, any
8 new motor vehicle to any person, except a wholesaler,
9 distributor or manufacturer's employees at a lower actual
10 price therefor than the actual price offered and charged to
11 a motor vehicle dealer for the same model vehicle similarly
12 equipped or to utilize any device which results in such
13 lesser actual price. However, the provisions of this
14 paragraph shall not apply to sales to a motor vehicle
15 dealer for resale to any unit of the United States
16 Government, the State or any of its political subdivisions;
17 (4) to prevent or attempt to prevent by contract or
18 otherwise any motor vehicle dealer or franchisee from
19 changing the executive management control of the motor
20 vehicle dealer or franchisee unless the franchiser, having
21 the burden of proof, proves that such change of executive
22 management will result in executive management control by a
23 person or persons who are not of good moral character or
24 who do not meet the franchiser's existing and, with
25 consideration given to the volume of sales and service of
26 the dealership, uniformly applied minimum business

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1 experience standards in the market area. However where the
2 manufacturer rejects a proposed change in executive
3 management control, the manufacturer shall give written
4 notice of his reasons to the dealer within 60 days of
5 notice to the manufacturer by the dealer of the proposed
6 change. If the manufacturer does not send a letter to the
7 franchisee by certified mail, return receipt requested,
8 within 60 days from receipt by the manufacturer of the
9 proposed change, then the change of the executive
10 management control of the franchisee shall be deemed
11 accepted as proposed by the franchisee, and the
12 manufacturer shall give immediate effect to such change;
13 (5) to prevent or attempt to prevent by contract or
14 otherwise any motor vehicle dealer from establishing or
15 changing the capital structure of his dealership or the
16 means by or through which he finances the operation
17 thereof; provided the dealer meets any reasonable capital
18 standards agreed to between the dealer and the
19 manufacturer, distributor or wholesaler, who may require
20 that the sources, method and manner by which the dealer
21 finances or intends to finance its operation, equipment or
22 facilities be fully disclosed;
23 (6) to refuse to give effect to or prevent or attempt
24 to prevent by contract or otherwise any motor vehicle
25 dealer or any officer, partner or stockholder of any motor
26 vehicle dealer from selling or transferring any part of the

SB1687 Enrolled- 23 -LRB100 07840 JLS 17909 b
1 interest of any of them to any other person or persons or
2 party or parties unless such sale or transfer is to a
3 transferee who would not otherwise qualify for a new motor
4 vehicle dealers license under the "The Illinois Vehicle
5 Code" or unless the franchiser, having the burden of proof,
6 proves that such sale or transfer is to a person or party
7 who is not of good moral character or does not meet the
8 franchiser's existing and reasonable capital standards
9 and, with consideration given to the volume of sales and
10 service of the dealership, uniformly applied minimum
11 business experience standards in the market area. However,
12 nothing herein shall be construed to prevent a franchiser
13 from implementing affirmative action programs providing
14 business opportunities for minorities or from complying
15 with applicable federal, State or local law:
16 (A) If the manufacturer intends to refuse to
17 approve the sale or transfer of all or a part of the
18 interest, then it shall, within 60 days from receipt of
19 the completed application forms generally utilized by
20 a manufacturer to conduct its review and a copy of all
21 agreements regarding the proposed transfer, send a
22 letter by certified mail, return receipt requested,
23 advising the franchisee of any refusal to approve the
24 sale or transfer of all or part of the interest and
25 shall state that the dealer only has 30 days from the
26 receipt of the notice to file with the Motor Vehicle

SB1687 Enrolled- 24 -LRB100 07840 JLS 17909 b
1 Review Board a written protest against the proposed
2 action. The notice shall set forth specific criteria
3 used to evaluate the prospective transferee and the
4 grounds for refusing to approve the sale or transfer to
5 that transferee. Within 30 days from the franchisee's
6 receipt of the manufacturer's notice, the franchisee
7 may file with the Board a written protest against the
8 proposed action.
9 When a protest has been timely filed, the Board
10 shall enter an order, fixing the date (within 60 days
11 of the date of such order), time, and place of a
12 hearing on the protest, required under Sections 12 and
13 29 of this Act, and send by certified mail, return
14 receipt requested, a copy of the order to the
15 manufacturer that filed notice of intention of the
16 proposed action and to the protesting franchisee.
17 The manufacturer shall have the burden of proof to
18 establish that good cause exists to refuse to approve
19 the sale or transfer to the transferee. The
20 determination whether good cause exists to refuse to
21 approve the sale or transfer shall be made by the Board
22 under subdivisions (6)(B). The manufacturer shall not
23 refuse to approve the sale or transfer by a dealer or
24 an officer, partner, or stockholder of a franchise or
25 any part of the interest to any person or persons
26 before the hearing process is concluded as prescribed

SB1687 Enrolled- 25 -LRB100 07840 JLS 17909 b
1 by this Act, and thereafter if the Board determines
2 that the manufacturer has failed to meet its burden of
3 proof and that good cause does not exist to refuse to
4 approve the sale or transfer to the transferee.
5 (B) Good cause to refuse to approve such sale or
6 transfer under this Section is established when such
7 sale or transfer is to a transferee who would not
8 otherwise qualify for a new motor vehicle dealers
9 license under the "The Illinois Vehicle Code" or such
10 sale or transfer is to a person or party who is not of
11 good moral character or does not meet the franchiser's
12 existing and reasonable capital standards and, with
13 consideration given to the volume of sales and service
14 of the dealership, uniformly applied minimum business
15 experience standards in the market area.
16 (7) to obtain money, goods, services, anything of
17 value, or any other benefit from any other person with whom
18 the motor vehicle dealer does business, on account of or in
19 relation to the transactions between the dealer and the
20 other person as compensation, except for services actually
21 rendered, unless such benefit is promptly accounted for and
22 transmitted to the motor vehicle dealer;
23 (8) to grant an additional franchise in the relevant
24 market area of an existing franchise of the same line make
25 or to relocate an existing motor vehicle dealership within
26 or into a relevant market area of an existing franchise of

SB1687 Enrolled- 26 -LRB100 07840 JLS 17909 b
1 the same line make. However, if the manufacturer wishes to
2 grant such an additional franchise to an independent person
3 in a bona fide relationship in which such person is
4 prepared to make a significant investment subject to loss
5 in such a dealership, or if the manufacturer wishes to
6 relocate an existing motor vehicle dealership, then the
7 manufacturer shall send a letter by certified mail, return
8 receipt requested, to each existing dealer or dealers of
9 the same line make whose relevant market area includes the
10 proposed location of the additional or relocated franchise
11 at least 60 days before the manufacturer grants an
12 additional franchise or relocates an existing franchise of
13 the same line make within or into the relevant market area
14 of an existing franchisee of the same line make. Each
15 notice shall set forth the specific grounds for the
16 proposed grant of an additional or relocation of an
17 existing franchise and shall state that the dealer has only
18 30 days from the date of receipt of the notice to file with
19 the Motor Vehicle Review Board a written protest against
20 the proposed action. Unless the parties agree upon the
21 grant or establishment of the additional or relocated
22 franchise within 30 days from the date the notice was
23 received by the existing franchisee of the same line make
24 or any person entitled to receive such notice, the
25 franchisee or other person may file with the Board a
26 written protest against the grant or establishment of the

SB1687 Enrolled- 27 -LRB100 07840 JLS 17909 b
1 proposed additional or relocated franchise.
2 When a protest has been timely filed, the Board shall
3 enter an order fixing a date (within 60 days of the date of
4 the order), time, and place of a hearing on the protest,
5 required under Sections 12 and 29 of this Act, and send by
6 certified or registered mail, return receipt requested, a
7 copy of the order to the manufacturer that filed the notice
8 of intention to grant or establish the proposed additional
9 or relocated franchise and to the protesting dealer or
10 dealers of the same line make whose relevant market area
11 includes the proposed location of the additional or
12 relocated franchise.
13 When more than one protest is filed against the grant
14 or establishment of the additional or relocated franchise
15 of the same line make, the Board may consolidate the
16 hearings to expedite disposition of the matter. The
17 manufacturer shall have the burden of proof to establish
18 that good cause exists to allow the grant or establishment
19 of the additional or relocated franchise. The manufacturer
20 may not grant or establish the additional franchise or
21 relocate the existing franchise before the hearing process
22 is concluded as prescribed by this Act, and thereafter if
23 the Board determines that the manufacturer has failed to
24 meet its burden of proof and that good cause does not exist
25 to allow the grant or establishment of the additional
26 franchise or relocation of the existing franchise.

SB1687 Enrolled- 28 -LRB100 07840 JLS 17909 b
1 The determination whether good cause exists for
2 allowing the grant or establishment of an additional
3 franchise or relocated existing franchise, shall be made by
4 the Board under subsection (c) of Section 12 of this Act.
5 If the manufacturer seeks to enter into a contract,
6 agreement or other arrangement with any person,
7 establishing any additional motor vehicle dealership or
8 other facility, limited to the sale of factory repurchase
9 vehicles or late model vehicles, then the manufacturer
10 shall follow the notice procedures set forth in this
11 Section and the determination whether good cause exists for
12 allowing the proposed agreement shall be made by the Board
13 under subsection (c) of Section 12, with the manufacturer
14 having the burden of proof.
15 A. (Blank).
16 B. For the purposes of this Section, appointment of
17 a successor motor vehicle dealer at the same location
18 as its predecessor, or within 2 miles of such location,
19 or the relocation of an existing dealer or franchise
20 within 2 miles of the relocating dealer's or
21 franchisee's existing location, shall not be construed
22 as a grant, establishment or the entering into of an
23 additional franchise or selling agreement, or a
24 relocation of an existing franchise. The reopening of a
25 motor vehicle dealership that has not been in operation
26 for 18 months or more shall be deemed the grant of an

SB1687 Enrolled- 29 -LRB100 07840 JLS 17909 b
1 additional franchise or selling agreement.
2 C. This Section does not apply to the relocation of
3 an existing dealership or franchise in a county having
4 a population of more than 300,000 persons when the new
5 location is within the dealer's current relevant
6 market area, provided the new location is more than 7
7 miles from the nearest dealer of the same line make.
8 This Section does not apply to the relocation of an
9 existing dealership or franchise in a county having a
10 population of less than 300,000 persons when the new
11 location is within the dealer's current relevant
12 market area, provided the new location is more than 12
13 miles from the nearest dealer of the same line make. A
14 dealer that would be farther away from the new location
15 of an existing dealership or franchise of the same line
16 make after a relocation may not file a written protest
17 against the relocation with the Motor Vehicle Review
18 Board.
19 D. Nothing in this Section shall be construed to
20 prevent a franchiser from implementing affirmative
21 action programs providing business opportunities for
22 minorities or from complying with applicable federal,
23 State or local law;
24 (9) to require a motor vehicle dealer to assent to a
25 release, assignment, novation, waiver or estoppel which
26 would relieve any person from liability imposed by this

SB1687 Enrolled- 30 -LRB100 07840 JLS 17909 b
1 Act;
2 (10) to prevent or refuse to give effect to the
3 succession to the ownership or management control of a
4 dealership by any legatee under the will of a dealer or to
5 an heir under the laws of descent and distribution of this
6 State unless the franchisee has designated a successor to
7 the ownership or management control under the succession
8 provisions of the franchise. Unless the franchiser, having
9 the burden of proof, proves that the successor is a person
10 who is not of good moral character or does not meet the
11 franchiser's existing and reasonable capital standards
12 and, with consideration given to the volume of sales and
13 service of the dealership, uniformly applied minimum
14 business experience standards in the market area, any
15 designated successor of a dealer or franchisee may succeed
16 to the ownership or management control of a dealership
17 under the existing franchise if:
18 (i) The designated successor gives the
19 franchiser written notice by certified mail,
20 return receipt requested, of his or her intention
21 to succeed to the ownership of the dealer within 60
22 days of the dealer's death or incapacity; and
23 (ii) The designated successor agrees to be
24 bound by all the terms and conditions of the
25 existing franchise.
26 Notwithstanding the foregoing, in the event the motor

SB1687 Enrolled- 31 -LRB100 07840 JLS 17909 b
1 vehicle dealer or franchisee and manufacturer have duly
2 executed an agreement concerning succession rights prior
3 to the dealer's death or incapacitation, the agreement
4 shall be observed.
5 (A) If the franchiser intends to refuse to honor
6 the successor to the ownership of a deceased or
7 incapacitated dealer or franchisee under an existing
8 franchise agreement, the franchiser shall send a
9 letter by certified mail, return receipt requested, to
10 the designated successor within 60 days from receipt of
11 a proposal advising of its intent to refuse to honor
12 the succession and to discontinue the existing
13 franchise agreement and shall state that the
14 designated successor only has 30 days from the receipt
15 of the notice to file with the Motor Vehicle Review
16 Board a written protest against the proposed action.
17 The notice shall set forth the specific grounds for the
18 refusal to honor the succession and discontinue the
19 existing franchise agreement.
20 If notice of refusal is not timely served upon the
21 designated successor, the franchise agreement shall
22 continue in effect subject to termination only as
23 otherwise permitted by paragraph (6) of subsection (d)
24 of Section 4 of this Act.
25 Within 30 days from the date the notice was
26 received by the designated successor or any other

SB1687 Enrolled- 32 -LRB100 07840 JLS 17909 b
1 person entitled to notice, the designee or other person
2 may file with the Board a written protest against the
3 proposed action.
4 When a protest has been timely filed, the Board
5 shall enter an order, fixing a date (within 60 days of
6 the date of the order), time, and place of a hearing on
7 the protest, required under Sections 12 and 29 of this
8 Act, and send by certified mail, return receipt
9 requested, a copy of the order to the franchiser that
10 filed the notice of intention of the proposed action
11 and to the protesting designee or such other person.
12 The manufacturer shall have the burden of proof to
13 establish that good cause exists to refuse to honor the
14 succession and discontinue the existing franchise
15 agreement. The determination whether good cause exists
16 to refuse to honor the succession shall be made by the
17 Board under subdivision (B) of this paragraph (10). The
18 manufacturer shall not refuse to honor the succession
19 or discontinue the existing franchise agreement before
20 the hearing process is concluded as prescribed by this
21 Act, and thereafter if the Board determines that it has
22 failed to meet its burden of proof and that good cause
23 does not exist to refuse to honor the succession and
24 discontinue the existing franchise agreement.
25 (B) No manufacturer shall impose any conditions
26 upon honoring the succession and continuing the

SB1687 Enrolled- 33 -LRB100 07840 JLS 17909 b
1 existing franchise agreement with the designated
2 successor other than that the franchisee has
3 designated a successor to the ownership or management
4 control under the succession provisions of the
5 franchise, or that the designated successor is of good
6 moral character or meets the reasonable capital
7 standards and, with consideration given to the volume
8 of sales and service of the dealership, uniformly
9 applied minimum business experience standards in the
10 market area;
11 (11) to prevent or refuse to approve a proposal to
12 establish a successor franchise at a location previously
13 approved by the franchiser when submitted with the
14 voluntary termination by the existing franchisee unless
15 the successor franchisee would not otherwise qualify for a
16 new motor vehicle dealer's license under the Illinois
17 Vehicle Code or unless the franchiser, having the burden of
18 proof, proves that such proposed successor is not of good
19 moral character or does not meet the franchiser's existing
20 and reasonable capital standards and, with consideration
21 given to the volume of sales and service of the dealership,
22 uniformly applied minimum business experience standards in
23 the market area. However, when such a rejection of a
24 proposal is made, the manufacturer shall give written
25 notice of its reasons to the franchisee within 60 days of
26 receipt by the manufacturer of the proposal. However,

SB1687 Enrolled- 34 -LRB100 07840 JLS 17909 b
1 nothing herein shall be construed to prevent a franchiser
2 from implementing affirmative action programs providing
3 business opportunities for minorities, or from complying
4 with applicable federal, State or local law;
5 (12) to prevent or refuse to grant a franchise to a
6 person because such person owns, has investment in or
7 participates in the management of or holds a franchise for
8 the sale of another make or line of motor vehicles within 7
9 miles of the proposed franchise location in a county having
10 a population of more than 300,000 persons, or within 12
11 miles of the proposed franchise location in a county having
12 a population of less than 300,000 persons; or
13 (13) to prevent or attempt to prevent any new motor
14 vehicle dealer from establishing any additional motor
15 vehicle dealership or other facility limited to the sale of
16 factory repurchase vehicles or late model vehicles or
17 otherwise offering for sale factory repurchase vehicles of
18 the same line make at an existing franchise by failing to
19 make available any contract, agreement or other
20 arrangement which is made available or otherwise offered to
21 any person; or .
22 (14) to exercise a right of first refusal or other
23 right to acquire a franchise from a dealer, unless the
24 manufacturer:
25 (A) notifies the dealer in writing that it intends
26 to exercise its right to acquire the franchise not

SB1687 Enrolled- 35 -LRB100 07840 JLS 17909 b
1 later than 60 days after the manufacturer's or
2 distributor's receipt of a notice of the proposed
3 transfer from the dealer and all information and
4 documents reasonably and customarily required by the
5 manufacturer or distributor supporting the proposed
6 transfer;
7 (B) pays to the dealer the same or greater
8 consideration as the dealer has contracted to receive
9 in connection with the proposed transfer or sale of all
10 or substantially all of the dealership assets, stock,
11 or other ownership interest, including the purchase or
12 lease of all real property, leasehold, or improvements
13 related to the transfer or sale of the dealership. Upon
14 exercise of the right of first refusal or such other
15 right, the manufacturer or distributor shall have the
16 right to assign the lease or to convey the real
17 property;
18 (C) assumes all of the duties, obligations, and
19 liabilities contained in the agreements that were to be
20 assumed by the proposed transferee and with respect to
21 which the manufacturer or distributor exercised the
22 right of first refusal or other right to acquire the
23 franchise;
24 (D) reimburses the proposed transferee for all
25 reasonable expenses incurred in evaluating,
26 investigating, and negotiating the transfer of the

SB1687 Enrolled- 36 -LRB100 07840 JLS 17909 b
1 dealership prior to the manufacturer's or
2 distributor's exercise of its right of first refusal or
3 other right to acquire the dealership. For purposes of
4 this paragraph, "reasonable expenses" includes the
5 usual and customary legal and accounting fees charged
6 for similar work, as well as expenses associated with
7 the evaluation and investigation of any real property
8 on which the dealership is operated. The proposed
9 transferee shall submit an itemized list of its
10 expenses to the manufacturer or distributor not later
11 than 30 days after the manufacturer's or distributor's
12 exercise of the right of first refusal or other right
13 to acquire the motor vehicle franchise. The
14 manufacturer or distributor shall reimburse the
15 proposed transferee for its expenses not later than 90
16 days after receipt of the itemized list. A manufacturer
17 or distributor may request to be provided with the
18 itemized list of expenses before exercising the
19 manufacturer's or distributor's right of first
20 refusal.
21 Except as provided in this paragraph (14), neither the
22 selling dealer nor the manufacturer or distributor shall
23 have any liability to any person as a result of a
24 manufacturer or distributor exercising its right of first
25 refusal.
26 For the purpose of this paragraph, "proposed

SB1687 Enrolled- 37 -LRB100 07840 JLS 17909 b
1 transferee" means the person to whom the franchise would
2 have been transferred to, or was proposed to be transferred
3 to, had the right of first refusal or other right to
4 acquire the franchise not been exercised by the
5 manufacturer or distributor.
6 (f) It is deemed a violation for a manufacturer, a
7distributor, a wholesaler, a distributor branch or division, a
8factory branch or division, or a wholesale branch or division,
9or officer, agent, broker, shareholder, except a shareholder of
101% or less of the outstanding shares of any class of securities
11of a manufacturer, distributor, or wholesaler which is a
12publicly traded corporation, or other representative, directly
13or indirectly, to own or operate a place of business as a motor
14vehicle franchisee or motor vehicle financing affiliate,
15except that, this subsection shall not prohibit:
16 (1) the ownership or operation of a place of business
17 by a manufacturer, distributor, or wholesaler for a period,
18 not to exceed 18 months, during the transition from one
19 motor vehicle franchisee to another;
20 (2) the investment in a motor vehicle franchisee by a
21 manufacturer, distributor, or wholesaler if the investment
22 is for the sole purpose of enabling a partner or
23 shareholder in that motor vehicle franchisee to acquire an
24 interest in that motor vehicle franchisee and that partner
25 or shareholder is not otherwise employed by or associated
26 with the manufacturer, distributor, or wholesaler and

SB1687 Enrolled- 38 -LRB100 07840 JLS 17909 b
1 would not otherwise have the requisite capital investment
2 funds to invest in the motor vehicle franchisee, and has
3 the right to purchase the entire equity interest of the
4 manufacturer, distributor, or wholesaler in the motor
5 vehicle franchisee within a reasonable period of time not
6 to exceed 5 years; or
7 (3) the ownership or operation of a place of business
8 by a manufacturer that manufactures only diesel engines for
9 installation in trucks having a gross vehicle weight rating
10 of more than 16,000 pounds that are required to be
11 registered under the Illinois Vehicle Code, provided that:
12 (A) the manufacturer does not otherwise
13 manufacture, distribute, or sell motor vehicles as
14 defined under Section 1-217 of the Illinois Vehicle
15 Code;
16 (B) the manufacturer owned a place of business and
17 it was in operation as of January 1, 2016;
18 (C) the manufacturer complies with all obligations
19 owed to dealers that are not owned, operated, or
20 controlled by the manufacturer, including, but not
21 limited to those obligations arising pursuant to
22 Section 6;
23 (D) to further avoid any acts or practices, the
24 effect of which may be to lessen or eliminate
25 competition, the manufacturer provides to dealers on
26 substantially equal terms access to all support for

SB1687 Enrolled- 39 -LRB100 07840 JLS 17909 b
1 completing repairs, including, but not limited to,
2 parts and assemblies, training, and technical service
3 bulletins, and other information concerning repairs
4 that the manufacturer provides to facilities that are
5 owned, operated, or controlled by the manufacturer;
6 and
7 (E) the manufacturer does not require that
8 warranty repair work be performed by a
9 manufacturer-owned repair facility and the
10 manufacturer provides any dealer that has an agreement
11 with the manufacturer to sell and perform warranty
12 repairs on the manufacturer's engines the opportunity
13 to perform warranty repairs on those engines,
14 regardless of whether the dealer sold the truck into
15 which the engine was installed.
16 (g) Notwithstanding the terms, provisions, or conditions
17of any agreement or waiver, it shall be deemed a violation for
18a manufacturer, a distributor, a wholesaler, a distributor
19branch or division, a factory branch or division, or a
20wholesale branch or division, or officer, agent or other
21representative thereof, to directly or indirectly condition
22the awarding of a franchise to a prospective new motor vehicle
23dealer, the addition of a line make or franchise to an existing
24dealer, the renewal of a franchise of an existing dealer, the
25approval of the relocation of an existing dealer's facility, or
26the approval of the sale or transfer of the ownership of a

SB1687 Enrolled- 40 -LRB100 07840 JLS 17909 b
1franchise on the willingness of a dealer, proposed new dealer,
2or owner of an interest in the dealership facility to enter
3into a site control agreement or exclusive use agreement unless
4separate and reasonable consideration was offered and accepted
5for that agreement.
6 For purposes of this subsection (g), the terms "site
7control agreement" and "exclusive use agreement" include any
8agreement that has the effect of either (i) requiring that the
9dealer establish or maintain exclusive dealership facilities;
10or (ii) restricting the ability of the dealer, or the ability
11of the dealer's lessor in the event the dealership facility is
12being leased, to transfer, sell, lease, or change the use of
13the dealership premises, whether by sublease, lease,
14collateral pledge of lease, or other similar agreement. "Site
15control agreement" and "exclusive use agreement" also include a
16manufacturer restricting the ability of a dealer to transfer,
17sell, or lease the dealership premises by right of first
18refusal to purchase or lease, option to purchase, or option to
19lease if the transfer, sale, or lease of the dealership
20premises is to a person who is an immediate family member of
21the dealer. For the purposes of this subsection (g), "immediate
22family member" means a spouse, parent, son, daughter,
23son-in-law, daughter-in-law, brother, and sister.
24 If a manufacturer exercises any right of first refusal to
25purchase or lease or option to purchase or lease with regard to
26a transfer, sale, or lease of the dealership premises to a

SB1687 Enrolled- 41 -LRB100 07840 JLS 17909 b
1person who is not an immediate family member of the dealer,
2then (1) within 60 days from the receipt of the completed
3application forms generally utilized by a manufacturer to
4conduct its review and a copy of all agreements regarding the
5proposed transfer, the manufacturer must notify the dealer of
6its intent to exercise the right of first refusal to purchase
7or lease or option to purchase or lease and (2) the exercise of
8the right of first refusal to purchase or lease or option to
9purchase or lease must result in the dealer receiving
10consideration, terms, and conditions that either are the same
11as or greater than that which they have contracted to receive
12in connection with the proposed transfer, sale, or lease of the
13dealership premises.
14 Any provision contained in any agreement entered into on or
15after November 25, 2009 (the effective date of Public Act
1696-824) this amendatory Act of the 96th General Assembly that
17is inconsistent with the provisions of this subsection (g)
18shall be voidable at the election of the affected dealer,
19prospective dealer, or owner of an interest in the dealership
20facility.
21 (h) For purposes of this subsection:
22 "Successor manufacturer" means any motor vehicle
23manufacturer that, on or after January 1, 2009, acquires,
24succeeds to, or assumes any part of the business of another
25manufacturer, referred to as the "predecessor manufacturer",
26as the result of any of the following:

SB1687 Enrolled- 42 -LRB100 07840 JLS 17909 b
1 (i) A change in ownership, operation, or control of the
2 predecessor manufacturer by sale or transfer of assets,
3 corporate stock or other equity interest, assignment,
4 merger, consolidation, combination, joint venture,
5 redemption, court-approved sale, operation of law or
6 otherwise.
7 (ii) The termination, suspension, or cessation of a
8 part or all of the business operations of the predecessor
9 manufacturer.
10 (iii) The discontinuance of the sale of the product
11 line.
12 (iv) A change in distribution system by the predecessor
13 manufacturer, whether through a change in distributor or
14 the predecessor manufacturer's decision to cease
15 conducting business through a distributor altogether.
16 "Former Franchisee" means a new motor vehicle dealer that
17has entered into a franchise with a predecessor manufacturer
18and that has either:
19 (i) entered into a termination agreement or deferred
20 termination agreement with a predecessor or successor
21 manufacturer related to such franchise; or
22 (ii) has had such franchise canceled, terminated,
23 nonrenewed, noncontinued, rejected, nonassumed, or
24 otherwise ended.
25 For a period of 3 years from: (i) the date that a successor
26manufacturer acquires, succeeds to, or assumes any part of the

SB1687 Enrolled- 43 -LRB100 07840 JLS 17909 b
1business of a predecessor manufacturer; (ii) the last day that
2a former franchisee is authorized to remain in business as a
3franchised dealer with respect to a particular franchise under
4a termination agreement or deferred termination agreement with
5a predecessor or successor manufacturer; (iii) the last day
6that a former franchisee that was cancelled, terminated,
7nonrenewed, noncontinued, rejected, nonassumed, or otherwise
8ended by a predecessor or successor manufacturer is authorized
9to remain in business as a franchised dealer with respect to a
10particular franchise; or (iv) November 25, 2009 (the effective
11date of Public Act 96-824) this amendatory Act of the 96th
12General Assembly, whichever is latest, it shall be unlawful for
13such successor manufacturer to enter into a same line make
14franchise with any person or to permit the relocation of any
15existing same line make franchise, for a line make of the
16predecessor manufacturer that would be located or relocated
17within the relevant market area of a former franchisee who
18owned or leased a dealership facility in that relevant market
19area without first offering the additional or relocated
20franchise to the former franchisee, or the designated successor
21of such former franchisee in the event the former franchisee is
22deceased or a person with a disability, at no cost and without
23any requirements or restrictions other than those imposed
24generally on the manufacturer's other franchisees at that time,
25unless one of the following applies:
26 (1) As a result of the former franchisee's

SB1687 Enrolled- 44 -LRB100 07840 JLS 17909 b
1 cancellation, termination, noncontinuance, or nonrenewal
2 of the franchise, the predecessor manufacturer had
3 consolidated the line make with another of its line makes
4 for which the predecessor manufacturer had a franchisee
5 with a then-existing dealership facility located within
6 that relevant market area.
7 (2) The successor manufacturer has paid the former
8 franchisee, or the designated successor of such former
9 franchisee in the event the former franchisee is deceased
10 or a person with a disability, the fair market value of the
11 former franchisee's franchise on (i) the date the
12 franchisor announces the action which results in the
13 termination, cancellation, or nonrenewal; or (ii) the date
14 the action which results in termination, cancellation, or
15 nonrenewal first became general knowledge; or (iii) the day
16 12 months prior to the date on which the notice of
17 termination, cancellation, or nonrenewal is issued,
18 whichever amount is higher. Payment is due within 90 days
19 of the effective date of the termination, cancellation, or
20 nonrenewal. If the termination, cancellation, or
21 nonrenewal is due to a manufacturer's change in
22 distributors, the manufacturer may avoid paying fair
23 market value to the dealer if the new distributor or the
24 manufacturer offers the dealer a franchise agreement with
25 terms acceptable to the dealer.
26 (3) The successor manufacturer proves that it would

SB1687 Enrolled- 45 -LRB100 07840 JLS 17909 b
1 have had good cause to terminate the franchise agreement of
2 the former franchisee, or the successor of the former
3 franchisee under item (e)(10) in the event that the former
4 franchisee is deceased or a person with a disability. The
5 determination of whether the successor manufacturer would
6 have had good cause to terminate the franchise agreement of
7 the former franchisee, or the successor of the former
8 franchisee, shall be made by the Board under subsection (d)
9 of Section 12. A successor manufacturer that seeks to
10 assert that it would have had good cause to terminate a
11 former franchisee, or the successor of the former
12 franchisee, must file a petition seeking a hearing on this
13 issue before the Board and shall have the burden of proving
14 that it would have had good cause to terminate the former
15 franchisee or the successor of the former franchisee. No
16 successor dealer, other than the former franchisee, may be
17 appointed or franchised by the successor manufacturer
18 within the relevant market area of the former franchisee
19 until the Board has held a hearing and rendered a
20 determination on the issue of whether the successor
21 manufacturer would have had good cause to terminate the
22 former franchisee.
23 In the event that a successor manufacturer attempts to
24enter into a same line make franchise with any person or to
25permit the relocation of any existing line make franchise under
26this subsection (h) at a location that is within the relevant

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1market area of 2 or more former franchisees, then the successor
2manufacturer may not offer it to any person other than one of
3those former franchisees unless the successor manufacturer can
4prove that at least one of the 3 exceptions in items (1), (2),
5and (3) of this subsection (h) applies to each of those former
6franchisees.
7(Source: P.A. 99-143, eff. 7-27-15; 99-844, eff. 8-19-16;
8revised 10-27-16.)
9 (815 ILCS 710/12) (from Ch. 121 1/2, par. 762)
10 Sec. 12. Arbitration; administrative proceedings; civil
11actions; determining good cause.
12 (a) The franchiser and franchisee may agree to submit a
13dispute involving Section 4, 5, 6, 7, 9, 10.1, or 11 to
14arbitration. Any such proceeding shall be conducted under the
15provisions of the Uniform Arbitration Act by a 3 member panel
16composed of one member appointed by the franchisee and one
17member appointed by the franchiser who together shall choose
18the third member.
19 An arbitration proceeding hereunder for a remedy under
20paragraph (6) of subsection (d) or paragraph (6), (8), (10) or
21(11) of subsection (e) of Section 4 of this Act shall be
22commenced by written notice to the franchiser by the objecting
23franchisee within 30 days from the date the dealer received
24notice to cancel, terminate, modify or not extend or renew an
25existing franchise or selling agreement or refusal to honor

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1succession to ownership or refusal to honor a sale or transfer
2or to grant or enter into the additional franchise or selling
3agreement, or to relocate an existing motor vehicle dealer; or
4within 60 days of the date the franchisee received notice in
5writing by the franchiser of its determination under any
6provision of Section 4 (other than paragraph (6) of subsection
7(d) or paragraph (6), (8), (10) or (11) of subsection (e) of
8Section 4), 5, 6, 7, 9, 10.1, or 11 of this Act; however, if
9notice of the provision under which the determination has been
10made is not given by the franchiser, then the proceeding shall
11be commenced as provided by Section 14 of this Act.
12 The franchiser and the franchisee shall appoint their
13respective arbitrators and they shall select the third
14arbitrator within 14 days of receipt of such notice by the
15franchiser. The arbitrators shall commence hearings within 60
16days after all the arbitrators have been appointed and a
17decision shall be rendered within 30 days after completion of
18the hearing.
19 During the pendency of the arbitration, any party may apply
20to a court of competent jurisdiction which shall have power to
21modify or stay the effective date of a proposed additional
22franchise or selling agreement, or the effective date of a
23proposed motor vehicle dealership relocation or the effective
24date of a cancellation, termination or modification or refusal
25to honor succession or refusal to allow a sale or transfer or
26extend the expiration date of a franchise or selling agreement

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1pending a final determination of the issues raised in the
2arbitration hearing upon such terms as the court may determine.
3Any such modification or stay shall not be effective for more
4than 60 days unless extended by the court for good cause or
5unless the arbitration hearing is then in progress.
6 (b) If the franchiser and the franchisee have not agreed to
7submit a dispute involving Section 4, 5, 6, 7, 9, 10.1, or 11
8of this Act to arbitration under subsection (a), then a
9proceeding before the Motor Vehicle Review Board as prescribed
10by subsection (c) or (d) of Section 12 and Section 29 of this
11Act for a remedy other than damages under paragraph (6) of
12subsection (d) or paragraph (6), (8), (10), or (11) of
13subsection (e) of Section 4 of this Act shall be commenced upon
14receipt by the Motor Vehicle Review Board of a timely notice of
15protest or within 60 days of the date the franchisee received
16notice in writing by the franchiser of its determination under
17any provision of those Sections other than paragraph (6) of
18subsection (d) or paragraph (6), (8), (10), or (11) of
19subsection (e) of Section 4 of this Act; however, if notice of
20the provision under which the determination has been made is
21not given by the franchiser, then the proceeding shall be
22commenced as provided by Section 14 of this Act.
23 During the pendency of a proceeding under this Section, a
24party may apply to a court of competent jurisdiction that shall
25have power to modify or stay the effective date of a proposed
26additional franchise or selling agreement, or the effective

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1date of a proposed motor vehicle dealership relocation, or the
2effective date of a cancellation, termination, or
3modification, or extend the expiration date of a franchise or
4selling agreement or refusal to honor succession to ownership
5or refusal to approve a sale or transfer pending a final
6determination of the issues raised in the hearing upon such
7terms as the court may determine. Any modification or stay
8shall not be effective for more than 60 days unless extended by
9the court for good cause or unless the hearing is then in
10progress.
11 (c) In proceedings under (a) or (b), when determining
12whether good cause has been established for granting such
13proposed additional franchise or selling agreement, or for
14relocating an existing motor vehicle dealership, the
15arbitrators or Board shall consider all relevant circumstances
16in accordance with subsection (v) of Section 2 of this Act,
17including but not limited to:
18 (1) whether the establishment of such additional
19 franchise or the relocation of such motor vehicle
20 dealership is warranted by economic and marketing
21 conditions including anticipated future changes;
22 (2) the retail sales and service business transacted by
23 the objecting motor vehicle dealer or dealers and other
24 motor vehicle dealers of the same line make with a place of
25 business in the relevant market area to be served by the
26 additional franchise or the relocated motor vehicle

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1 dealership during the 5 year period immediately preceding
2 such notice as compared to the business available to them;
3 (3) the investment necessarily made and obligations
4 incurred by the objecting motor vehicle dealer or dealers
5 and other motor vehicle dealers of the same line make with
6 a place of business in the relevant market area to be
7 served by the additional franchise or the relocated motor
8 vehicle dealership to perform their obligations under
9 existing franchises or selling agreements; and, the
10 manufacturer shall give reasonable credit for sales of
11 factory repurchase vehicles purchased by the objecting
12 motor vehicle dealer or dealers and other motor vehicle
13 dealers of the same line make with the place of business in
14 the relevant market area to be served by the additional
15 franchise or the relocated motor vehicle dealership, or the
16 additional motor vehicle dealership or other facility
17 limited to the sale of factory repurchase or late model
18 vehicles, at manufacturer authorized or sponsored auctions
19 in determining performance of obligations under existing
20 franchises or selling agreements relating to total new
21 vehicle sales;
22 (4) the permanency of the investment of the objecting
23 motor vehicle dealer or dealers and other motor vehicle
24 dealers of the same line make with a place of business in
25 the relevant market area to be served by the additional
26 franchise or the relocated motor vehicle dealership;

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1 (5) whether it is beneficial or injurious to the public
2 welfare for an additional franchise or relocated motor
3 vehicle dealership to be established;
4 (6) whether the objecting motor vehicle dealer or
5 dealers and other motor vehicle dealers of the same line
6 make with a place of business in the relevant market area
7 to be served by the additional franchisee or relocated
8 motor vehicle dealership are providing adequate
9 competition and convenient consumer care for the motor
10 vehicles of the same line make owned or operated in the
11 area to be served by the additional franchise or relocated
12 motor vehicle dealership;
13 (7) whether the objecting motor vehicle dealer or
14 dealers and other motor vehicle dealers of the same line
15 make with a place of business in the relevant market area
16 to be served by the additional franchisee or the relocated
17 motor vehicle dealership have adequate motor vehicle sales
18 and service facilities, equipment, vehicle parts and
19 qualified personnel to reasonably provide for the needs of
20 the customer; provided, however, that good cause shall not
21 be shown solely by a desire for further market penetration;
22 (8) whether the establishment of an additional
23 franchise or the relocation of a motor vehicle dealership
24 would be in the public interest;
25 (9) whether there has been a material breach by a motor
26 vehicle dealer of the existing franchise agreement which

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1 creates a substantially detrimental effect upon the
2 distribution of the franchiser's motor vehicles in the
3 affected motor vehicle dealer's relevant market area or
4 fraudulent claims for warranty work, insolvency or
5 inability to pay debts as they mature;
6 (10) the effect of an additional franchise or relocated
7 motor vehicle dealership upon the existing motor vehicle
8 dealers of the same line make in the relevant market area
9 to be served by the additional franchisee or relocated
10 motor vehicle dealership; and
11 (11) whether the manufacturer has given reasonable
12 credit to the objecting motor vehicle dealer or dealers and
13 other motor vehicle dealers of the same line make with a
14 place of business in the relevant market area to be served
15 by the additional franchise or relocated motor vehicle
16 dealership or additional motor vehicle dealership or other
17 facility limited to the sale of factory repurchase or late
18 model vehicles, for retail sales of factory repurchase
19 vehicles purchased by the motor vehicle dealer or dealers
20 at manufacturer authorized or sponsored auctions.
21 (d) In proceedings under subsection (a) or (b), when
22determining whether good cause has been established for
23cancelling, terminating, refusing to extend or renew, or
24changing or modifying the obligations of the motor vehicle
25dealer as a condition to offering a renewal, replacement, or
26succeeding franchise or selling agreement, the arbitrators or

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1Board shall consider all relevant circumstances in accordance
2with subsection (v) of Section 2 of this Act, including but not
3limited to:
4 (1) The amount of retail sales transacted by the
5 franchisee during a 5-year period immediately before the
6 date of the notice of proposed action as compared to the
7 business available to the franchisee.
8 (2) The investment necessarily made and obligations
9 incurred by the franchisee to perform its part of the
10 franchise.
11 (3) The permanency of the franchisee's investment.
12 (4) Whether it is injurious to the public interest for
13 the franchise to be cancelled or terminated or not extended
14 or modified, or the business of the franchise disrupted.
15 (5) Whether the franchisee has adequate motor vehicle
16 sales and service facilities, equipment, vehicle parts,
17 and service personnel to reasonably provide for the need of
18 the customers for the same line make of motor vehicles
19 handled by the franchisee.
20 (6) Whether the franchisee fails to fulfill the
21 warranty obligations of the manufacturer required to be
22 performed by the franchisee.
23 (7) The extent and materiality of the franchisee's
24 failure to comply with the terms of the franchise and the
25 reasonableness and fairness of those terms.
26 (8) Whether the owners of the franchise had actual

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1 knowledge of the facts and circumstances upon which
2 cancellation or termination, failure to extend or renew, or
3 changing or modification of the obligations of the
4 franchisee as a condition to offering a renewal,
5 replacement, or succeeding franchise or selling agreement.
6 (9) The extent to which local market factors in the
7 dealer's market area presented by the dealer impacted the
8 dealer's performance.
9 (e) If the franchiser and the franchisee have not agreed to
10submit a dispute to arbitration, and the dispute did not arise
11under paragraph (6) of subsection (d) or paragraph (6), (8),
12(10), or (11) of subsection (e) of Section 4 of this Act, then
13a proceeding for a remedy other than damages may be commenced
14by the objecting franchisee in the circuit court of the county
15in which the objecting franchisee has its principal place of
16business, within 60 days of the date the franchisee received
17notice in writing by the franchiser of its determination under
18any provision of this Act other than paragraph (6) of
19subsection (d) or paragraph (6), (8), (10), or (11) of
20subsection (e) of Section 4 of this Act; however, if notice of
21the provision under which the determination has been made is
22not given by the franchiser, then the proceeding shall be
23commenced as provided by Section 14 of this Act.
24 (f) The changes to this Section made by this amendatory Act
25of the 92nd General Assembly (i) apply only to causes of action
26accruing on or after its effective date and (ii) are intended

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1to provide only an additional venue for dispute resolution
2without changing any substantive rights under this Act.
3(Source: P.A. 92-272, eff. 1-1-02.)
4 Section 99. Effective date. This Act takes effect upon
5becoming law.
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