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

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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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: (Passed) 2017-08-24 - Public Act . . . . . . . . . 100-0308 [SB1687 Detail]

Download: Illinois-2017-SB1687-Engrossed.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 1.1, 2, 4, and 12 as follows:
(815 ILCS 710/1.1) (from Ch. 121 1/2, par. 751.1)
Sec. 1.1. Declaration of purpose. The Legislature finds and
declares that the distribution and sale of vehicles within this
State vitally affects the general economy of the State and the
public interest, and welfare, and safety and that in order to
promote the public interest, and welfare, and safety, and in
the exercise of its police power, it is necessary to regulate
motor vehicle manufacturers, distributors, wholesalers and
factory or distributor branches or representatives, and to
regulate dealers of motor vehicles doing business in this State
in order to prevent frauds, impositions, discrimination, and
other abuses upon its citizens, to protect and preserve the
investments and properties of the citizens of this State, to
foster healthy competition, and to provide adequate and
sufficient service to consumers generally. The licensing and
supervision of motor vehicle dealers is necessary for the
protection of consumers and the sale of motor vehicles by
unlicensed dealers should be prevented.

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The Legislature further finds that the regulation of motor
vehicle manufacturers, distributors, wholesalers, factory
branches, distributor branches and representatives, and
dealers promotes the distribution of motor vehicles to the
public and provides a system for servicing vehicles and for
complying with manufacturer warranties so that consumers can
keep their motor vehicles properly functioning and safe. The
sale and distribution of motor vehicles constitutes a
continuing obligation of manufacturers, distributors,
wholesalers, factory branches, distributor branches and
representatives, and dealers to consumers, and the public has
an interest in promoting the availability of post-sale
mechanical and operational services.
(Source: P.A. 83-922.)
(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

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registered under the Illinois Vehicle Code.
(b) "Manufacturer", any person engaged in the business of
manufacturing or assembling new and unused motor vehicles.
"Manufacturer" includes a factory branch, distributor, and
distributor branch.
(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
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.

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(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
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

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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
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

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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.
(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; 96-11, eff. 5-22-09.)
(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

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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:
(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.

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(d) It shall be deemed a violation for a manufacturer, a
distributor, a wholesaler, a distributor branch or division, or
officer, agent or other representative thereof:
(1) to adopt, change, establish or implement a plan or
system for the allocation and distribution of new motor
vehicles to motor vehicle dealers which is arbitrary or
capricious or to modify an existing plan so as to cause the
same to be arbitrary or capricious;
(2) to fail or refuse to advise or disclose to any
motor vehicle dealer having a franchise or selling
agreement, upon written request therefor, the basis upon
which new motor vehicles of the same line make are
allocated or distributed to motor vehicle dealers in the
State and the basis upon which the current allocation or
distribution is being made or will be made to such motor
vehicle dealer;
(3) to refuse to deliver in reasonable quantities and
within a reasonable time after receipt of dealer's order,
to any motor vehicle dealer having a franchise or selling
agreement for the retail sale of new motor vehicles sold 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

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or division, factory branch or division, or wholesale
branch or division to be available for immediate delivery.
However, the failure to deliver any motor vehicle shall not
be considered a violation of this Act if such failure is
due to an act of God, a work stoppage or delay due to a
strike or labor difficulty, a shortage of materials, a lack
of manufacturing capacity, a freight embargo or other cause
over which the manufacturer, distributor, or wholesaler,
or any agent thereof has no control;
(4) to coerce, or attempt to coerce, any motor vehicle
dealer to enter into any agreement with such manufacturer,
distributor, wholesaler, distributor branch or division,
factory branch or division, or wholesale branch or
division, or officer, agent or other representative
thereof, or to do any other act prejudicial to the dealer
by threatening to reduce his allocation of motor vehicles
or cancel any franchise or any selling agreement existing
between such manufacturer, distributor, wholesaler,
distributor branch or division, or factory branch or
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

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advertising campaign or contest or any promotional
campaign, or to purchase or lease any promotional
materials, training materials, show room or other display
decorations or materials at the expense of the franchisee;
(6) to cancel or terminate the franchise or selling
agreement of a motor vehicle dealer without good cause and
without giving notice as hereinafter provided; to fail or
refuse to extend the franchise or selling agreement of a
motor vehicle dealer upon its expiration without good cause
and without giving notice as hereinafter provided; or, to
offer a renewal, replacement or succeeding franchise or
selling agreement containing terms and provisions the
effect of which is to substantially change or modify the
sales and service obligations or capital requirements of
the motor vehicle dealer arbitrarily and without good cause
and without giving notice as hereinafter provided
notwithstanding any term or provision of a franchise or
selling agreement.
(A) If a manufacturer, distributor, wholesaler,
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

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effective date of the proposed action, or not later
than 10 days before the proposed action when the reason
for the action is based upon either of the following:
(i) the business operations of the franchisee
have been abandoned or the franchisee has failed to
conduct customary sales and service operations
during customary business hours for at least 7
consecutive business days unless such closing is
due to an act of God, strike or labor difficulty or
other cause over which the franchisee has no
control; or
(ii) the conviction of or plea of nolo
contendere by the motor vehicle dealer or any
operator thereof in a court of competent
jurisdiction to an offense punishable by
imprisonment for more than two years.
Each notice of proposed action shall include a
detailed statement setting forth the specific grounds
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

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change substantially or modify the sales and service
obligations or capital requirements of a motor vehicle
dealer as a condition to extending or renewing the
existing franchise or selling agreement of such motor
vehicle dealer, it shall send a letter by certified
mail, return receipt requested, to the affected
franchisee at least 60 days before the date of
expiration of the franchise or selling agreement. Each
notice of proposed action shall include a detailed
statement setting forth the specific grounds for the
proposed action and shall state that the dealer has
only 30 days from receipt of the notice to file with
the Motor Vehicle Review Board a written protest
against the proposed action.
(C) Within 30 days from receipt of the notice under
subparagraphs (A) and (B), the franchisee may file with
the Board a written protest against the proposed
action.
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.

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The manufacturer shall have the burden of proof to
establish that good cause exists to cancel or
terminate, or fail to extend or renew the franchise or
selling agreement of a motor vehicle dealer or
franchisee, and to change substantially or modify the
sales and service obligations or capital requirements
of a motor vehicle dealer as a condition to extending
or renewing the existing franchise or selling
agreement. The determination whether good cause exists
to cancel, terminate, or refuse to renew or extend the
franchise or selling agreement, or to change or modify
the obligations of the dealer as a condition to offer
renewal, replacement, or succession shall be made by
the Board under subsection (d) of Section 12 of this
Act.
(D) Notwithstanding the terms, conditions, or
provisions of a franchise or selling agreement, the
following shall not constitute good cause for
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.

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(E) The manufacturer may not cancel or terminate,
or fail to extend or renew a franchise or selling
agreement or change or modify the obligations of the
franchisee as a condition to offering a renewal,
replacement, or succeeding franchise or selling
agreement before the hearing process is concluded as
prescribed by this Act, and thereafter, if the Board
determines that the manufacturer has failed to meet its
burden of proof and that good cause does not exist to
allow the proposed action;
(7) notwithstanding the terms of any franchise
agreement, to fail to indemnify and hold harmless its
franchised dealers against any judgment or settlement for
damages, including, but not limited to, court costs, expert
witness fees, reasonable attorneys' fees of the new motor
vehicle dealer, and other expenses incurred in the
litigation, so long as such fees and costs are reasonable,
arising out of complaints, claims or lawsuits including,
but not limited to, strict liability, negligence,
misrepresentation, warranty (express or implied), or
rescission 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

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that, in order to provide an adequate defense, the
manufacturer receives notice of the filing of a complaint,
claim, or lawsuit within 60 days after the filing;
(8) to require or otherwise coerce a motor vehicle
dealer to underutilize the motor vehicle dealer's
facilities by requiring or otherwise coercing the motor
vehicle dealer to exclude or remove from the motor vehicle
dealer's facilities operations for selling or servicing of
any vehicles for which the motor vehicle dealer has a
franchise agreement with another manufacturer,
distributor, wholesaler, distribution branch or division,
or officer, agent, or other representative thereof;
provided, however, that, in light of all existing
circumstances, (i) the motor vehicle dealer maintains a
reasonable line of credit for each make or line of new
motor vehicle, (ii) the new motor vehicle dealer remains in
compliance with any reasonable facilities requirements of
the manufacturer, (iii) no change is made in the 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

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presumed to be reasonable, and the manufacturer shall have
the burden to overcome that presumption. A motor vehicle
dealer must provide a written notification of its intent to
add a make or line of new motor vehicles to the
manufacturer. If the manufacturer does not respond to the
motor vehicle dealer, in writing, objecting to the addition
of the make or line within 60 days after the date that the
motor vehicle dealer sends the written notification, then
the manufacturer shall be deemed to have approved the
addition of the make or line; 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

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

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

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

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vendor to impair, infringe upon, or eliminate, directly or
indirectly, the intellectual property rights of the
manufacturer including, but not limited to, the
manufacturer's intellectual property rights in any
trademarks or trade dress, or other intellectual property
interests owned or controlled by the manufacturer. This
paragraph (12) shall not be construed to permit a dealer to
erect or maintain signs that do not conform to the
manufacturer's intellectual property rights or trademark
or trade dress usage guidelines.
(e) It shall be deemed a violation for a manufacturer, a
distributor, a wholesaler, a distributor branch or division or
officer, agent or other representative thereof:
(1) to resort to or use any false or misleading
advertisement in connection with his business as such
manufacturer, distributor, wholesaler, distributor branch
or division or officer, agent or other representative
thereof;
(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

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pricing, incentive, rebate, finance rate, or low interest
loan program offered to competing motor vehicle dealers in
other contiguous states. However, the provisions of this
paragraph shall not apply to sales to a motor vehicle
dealer for resale to any unit of the United States
Government, the State or any of its political subdivisions;
(3) to offer to sell or lease, or to sell or lease, any
new motor vehicle to any person, except a wholesaler,
distributor or manufacturer's employees at a lower actual
price therefor than the actual price offered and charged to
a motor vehicle dealer for the same model vehicle similarly
equipped or to utilize any device which results in such
lesser actual price. However, the provisions of this
paragraph shall not apply to sales to a motor vehicle
dealer for resale to any unit of the United States
Government, the State or any of its political subdivisions;
(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

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experience standards in the market area. However where the
manufacturer rejects a proposed change in executive
management control, the manufacturer shall give written
notice of his reasons to the dealer within 60 days of
notice to the manufacturer by the dealer of the proposed
change. If the manufacturer does not send a letter to the
franchisee by certified mail, return receipt requested,
within 60 days from receipt by the manufacturer of the
proposed change, then the change of the executive
management control of the franchisee shall be deemed
accepted as proposed by the franchisee, and the
manufacturer shall give immediate effect to such change;
(5) to prevent or attempt to prevent by contract or
otherwise any motor vehicle dealer from establishing or
changing the capital structure of his dealership or the
means by or through which he finances the operation
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

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interest of any of them to any other person or persons or
party or parties unless such sale or transfer is to a
transferee who would not otherwise qualify for a new motor
vehicle dealers license under the "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

SB1687 Engrossed - 24 - LRB100 07840 JLS 17909 b
Review Board a written protest against the proposed
action. The notice shall set forth specific criteria
used to evaluate the prospective transferee and the
grounds for refusing to approve the sale or transfer to
that transferee. Within 30 days from the franchisee's
receipt of the manufacturer's notice, the franchisee
may file with the Board a written protest against the
proposed action.
When a protest has been timely filed, the Board
shall enter an order, fixing the date (within 60 days
of the date of such order), time, and place of a
hearing on the protest, required under Sections 12 and
29 of this Act, and send by certified mail, return
receipt requested, a copy of the order to the
manufacturer that filed notice of intention of the
proposed action and to the protesting franchisee.
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

SB1687 Engrossed - 25 - LRB100 07840 JLS 17909 b
by this Act, and thereafter if the Board determines
that the manufacturer has failed to meet its burden of
proof and that good cause does not exist to refuse to
approve the sale or transfer to the transferee.
(B) Good cause to refuse to approve such sale or
transfer under this Section is established when such
sale or transfer is to a transferee who would not
otherwise qualify for a new motor vehicle dealers
license under the "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

SB1687 Engrossed - 26 - LRB100 07840 JLS 17909 b
the same line make. However, if the manufacturer wishes to
grant such an additional franchise to an independent person
in a bona fide relationship in which such person is
prepared to make a significant investment subject to loss
in such a dealership, or if the manufacturer wishes to
relocate an existing motor vehicle dealership, then the
manufacturer shall send a letter by certified mail, return
receipt requested, to each existing dealer or dealers of
the same line make whose relevant market area includes the
proposed location of the additional or relocated franchise
at least 60 days before the manufacturer grants an
additional franchise or relocates an existing franchise of
the same line make within or into the relevant market area
of an existing franchisee of the same line make. Each
notice shall set forth the specific grounds for the
proposed grant of an additional or relocation of an
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

SB1687 Engrossed - 27 - LRB100 07840 JLS 17909 b
proposed additional or relocated franchise.
When a protest has been timely filed, the Board shall
enter an order fixing a date (within 60 days of the date of
the order), time, and place of a hearing on the protest,
required under Sections 12 and 29 of this Act, and send by
certified or registered mail, return receipt requested, a
copy of the order to the manufacturer that filed the notice
of intention to grant or establish the proposed additional
or relocated franchise and to the protesting dealer or
dealers of the same line make whose relevant market area
includes the proposed location of the additional or
relocated franchise.
When more than one protest is filed against the grant
or establishment of the additional or relocated franchise
of the same line make, the Board may consolidate the
hearings to expedite disposition of the matter. The
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.

SB1687 Engrossed - 28 - LRB100 07840 JLS 17909 b
The determination whether good cause exists for
allowing the grant or establishment of an additional
franchise or relocated existing franchise, shall be made by
the Board under subsection (c) of Section 12 of this Act.
If the manufacturer seeks to enter into a contract,
agreement or other arrangement with any person,
establishing any additional motor vehicle dealership or
other facility, limited to the sale of factory repurchase
vehicles or late model vehicles, then the manufacturer
shall follow the notice procedures set forth in this
Section and the determination whether good cause exists for
allowing the proposed agreement shall be made by the Board
under subsection (c) of Section 12, with the manufacturer
having the burden of proof.
A. (Blank).
B. For the purposes of this Section, appointment 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

SB1687 Engrossed - 29 - LRB100 07840 JLS 17909 b
additional franchise or selling agreement.
C. This Section does not apply to the relocation of
an existing dealership or franchise in a county having
a population of more than 300,000 persons when the new
location is within the dealer's current relevant
market area, provided the new location is more than 7
miles from the nearest dealer of the same line make.
This Section does not apply to the relocation of an
existing dealership or franchise in a county having a
population of less than 300,000 persons when the new
location is within the dealer's current relevant
market area, provided the new location is more than 12
miles from the nearest dealer of the same line make. A
dealer that would be farther away from the new location
of an existing dealership or franchise of the same line
make after a relocation 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

SB1687 Engrossed - 30 - LRB100 07840 JLS 17909 b
Act;
(10) to prevent or refuse to give effect to the
succession to the ownership or management control of a
dealership by any legatee under the will of a dealer or to
an heir under the laws of descent and distribution of this
State unless the franchisee has designated a successor to
the ownership or management control under the succession
provisions of the franchise. Unless the franchiser, having
the burden of proof, proves that the successor is a person
who is not of good moral character or does not meet the
franchiser's existing and reasonable capital standards
and, with consideration given to the volume of sales and
service of the dealership, uniformly applied minimum
business experience standards in the market area, any
designated successor of a dealer or franchisee may succeed
to the ownership or management control of a dealership
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

SB1687 Engrossed - 31 - LRB100 07840 JLS 17909 b
vehicle dealer or franchisee and manufacturer have duly
executed an agreement concerning succession rights prior
to the dealer's death or incapacitation, the agreement
shall be observed.
(A) If the franchiser intends to refuse to honor
the successor to the ownership of a deceased or
incapacitated dealer or franchisee under an existing
franchise agreement, the franchiser shall send a
letter by certified mail, return receipt requested, to
the designated successor within 60 days from receipt of
a proposal advising of its intent to refuse to honor
the succession and to discontinue the existing
franchise agreement and shall state that the
designated successor only has 30 days from the receipt
of the notice to file with the Motor Vehicle Review
Board a written protest against the proposed action.
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

SB1687 Engrossed - 32 - LRB100 07840 JLS 17909 b
person entitled to notice, the designee or other person
may file with the Board a written protest against the
proposed action.
When a protest has been timely filed, the Board
shall enter an order, fixing a date (within 60 days of
the date of the order), time, and place of a hearing on
the protest, required under Sections 12 and 29 of this
Act, and send by certified mail, return receipt
requested, a copy of the order to the franchiser that
filed the notice of intention of the proposed action
and to the protesting designee or such other person.
The manufacturer shall have the burden of proof to
establish that good cause exists to refuse to honor the
succession and discontinue the existing franchise
agreement. The determination whether good cause exists
to refuse to honor the succession shall be made by the
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

SB1687 Engrossed - 33 - LRB100 07840 JLS 17909 b
existing franchise agreement with the designated
successor other than that the franchisee has
designated a successor to the ownership or management
control under the succession provisions of the
franchise, or that the designated successor is of good
moral character or meets the reasonable capital
standards and, with consideration given to the volume
of sales and service of the dealership, uniformly
applied minimum business experience standards in the
market area;
(11) to prevent or refuse to approve a proposal to
establish a successor franchise at a location previously
approved by the franchiser when submitted with the
voluntary termination by the existing franchisee unless
the successor franchisee would not otherwise qualify for a
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,

SB1687 Engrossed - 34 - LRB100 07840 JLS 17909 b
nothing herein shall be construed to prevent a franchiser
from implementing affirmative action programs providing
business opportunities for minorities, or from complying
with applicable federal, State or local law;
(12) to prevent or refuse to grant a franchise to a
person because such person owns, has investment in or
participates in the management of or holds a franchise for
the sale of another make or line of motor vehicles within 7
miles of the proposed franchise location in a county having
a population of more than 300,000 persons, or within 12
miles of the proposed franchise location in a county having
a population of less than 300,000 persons; 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; or .
(14) to exercise a right of first refusal or other
right to acquire a franchise from a dealer, unless the
manufacturer:
(A) notifies the dealer in writing that it intends
to exercise its right to acquire the franchise not

SB1687 Engrossed - 35 - LRB100 07840 JLS 17909 b
later than 60 days after the manufacturer's or
distributor's receipt of a notice of the proposed
transfer from the dealer and all information and
documents reasonably and customarily required by the
manufacturer or distributor supporting the proposed
transfer;
(B) pays to the dealer the same or greater
consideration as the dealer has contracted to receive
in connection with the proposed transfer or sale of all
or substantially all of the dealership assets, stock,
or other ownership interest, including the purchase or
lease of all real property, leasehold, or improvements
related to the transfer or sale of the dealership. Upon
exercise of the right of first refusal or such other
right, the manufacturer or distributor shall have the
right to assign the lease or to convey the real
property;
(C) assumes all of the duties, obligations, and
liabilities contained in the agreements that were to be
assumed by the proposed transferee and with respect to
which the manufacturer or distributor exercised the
right of first refusal or other right to acquire the
franchise;
(D) reimburses the proposed transferee for all
reasonable expenses incurred in evaluating,
investigating, and negotiating the transfer of the

SB1687 Engrossed - 36 - LRB100 07840 JLS 17909 b
dealership prior to the manufacturer's or
distributor's exercise of its right of first refusal or
other right to acquire the dealership. For purposes of
this paragraph, "reasonable expenses" includes the
usual and customary legal and accounting fees charged
for similar work, as well as expenses associated with
the evaluation and investigation of any real property
on which the dealership is operated. The proposed
transferee shall submit an itemized list of its
expenses to the manufacturer or distributor not later
than 30 days after the manufacturer's or distributor's
exercise of the right of first refusal or other right
to acquire the motor vehicle franchise. The
manufacturer or distributor shall reimburse the
proposed transferee for its expenses not later than 90
days after receipt of the itemized list. A manufacturer
or distributor may request to be provided with the
itemized list of expenses before exercising the
manufacturer's or distributor's right of first
refusal.
Except as provided in this paragraph (14), neither the
selling dealer nor the manufacturer or distributor shall
have any liability to any person as a result of a
manufacturer or distributor exercising its right of first
refusal.
For the purpose of this paragraph, "proposed

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

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

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

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

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

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

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

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

SB1687 Engrossed - 45 - LRB100 07840 JLS 17909 b
have had good cause to terminate the franchise agreement of
the former franchisee, or the successor of the former
franchisee under item (e)(10) in the event that the former
franchisee is deceased or a person with a disability. The
determination of whether the successor manufacturer would
have had good cause to terminate the franchise agreement of
the former franchisee, or the successor of the former
franchisee, shall be made by the Board under subsection (d)
of Section 12. A successor manufacturer that seeks to
assert that it would have had good cause to terminate a
former franchisee, or the successor of the former
franchisee, must file a petition seeking a hearing on this
issue before the Board and shall have the burden of proving
that it would have had good cause to terminate the former
franchisee or the successor of the former franchisee. No
successor dealer, other than the former franchisee, may be
appointed or franchised by the successor manufacturer
within the relevant market area of the former franchisee
until the Board has held a hearing and rendered a
determination on the issue of whether the successor
manufacturer would have had good cause to terminate the
former franchisee.
In the event that a successor manufacturer attempts to
enter into a same line make franchise with any person or to
permit the relocation of any existing line make franchise under
this subsection (h) at a location that is within the relevant

SB1687 Engrossed - 46 - LRB100 07840 JLS 17909 b
market area of 2 or more former franchisees, then the successor
manufacturer may not offer it to any person other than one of
those former franchisees unless the successor manufacturer can
prove that at least one of the 3 exceptions in items (1), (2),
and (3) of this subsection (h) applies to each of those former
franchisees.
(Source: P.A. 99-143, eff. 7-27-15; 99-844, eff. 8-19-16;
revised 10-27-16.)
(815 ILCS 710/12) (from Ch. 121 1/2, par. 762)
Sec. 12. Arbitration; administrative proceedings; civil
actions; determining good cause.
(a) The franchiser and franchisee may agree to submit a
dispute involving Section 4, 5, 6, 7, 9, 10.1, or 11 to
arbitration. Any such proceeding shall be conducted under the
provisions of the Uniform Arbitration Act by a 3 member panel
composed of one member appointed by the franchisee and one
member appointed by the franchiser who together shall choose
the third member.
An arbitration proceeding hereunder for a remedy under
paragraph (6) of subsection (d) or paragraph (6), (8), (10) or
(11) of subsection (e) of Section 4 of this Act shall be
commenced by written notice to the franchiser by the objecting
franchisee within 30 days from the date the dealer received
notice to cancel, terminate, modify or not extend or renew an
existing franchise or selling agreement or refusal to honor

SB1687 Engrossed - 47 - LRB100 07840 JLS 17909 b
succession to ownership or refusal to honor a sale or transfer
or to grant or enter into the additional franchise or selling
agreement, or to relocate an existing motor vehicle dealer; or
within 60 days of the date the franchisee received notice in
writing by the franchiser of its determination under any
provision of Section 4 (other than paragraph (6) of subsection
(d) or paragraph (6), (8), (10) or (11) of subsection (e) of
Section 4), 5, 6, 7, 9, 10.1, or 11 of this Act; however, if
notice of the provision under which the determination has been
made is not given by the franchiser, then the proceeding shall
be commenced as provided by Section 14 of this Act.
The franchiser and the franchisee shall appoint their
respective arbitrators and they shall select the third
arbitrator within 14 days of receipt of such notice by the
franchiser. The arbitrators shall commence hearings within 60
days after all the arbitrators have been appointed and a
decision shall be rendered within 30 days after completion of
the hearing.
During the pendency of the arbitration, any party may apply
to a court of competent jurisdiction which shall have power to
modify or stay the effective date of a proposed additional
franchise or selling agreement, or the effective date of a
proposed motor vehicle dealership relocation or the effective
date of a cancellation, termination or modification or refusal
to honor succession or refusal to allow a sale or transfer or
extend the expiration date of a franchise or selling agreement

SB1687 Engrossed - 48 - LRB100 07840 JLS 17909 b
pending a final determination of the issues raised in the
arbitration hearing upon such terms as the court may determine.
Any such modification or stay shall not be effective for more
than 60 days unless extended by the court for good cause or
unless the arbitration hearing is then in progress.
(b) If the franchiser and the franchisee have not agreed to
submit a dispute involving Section 4, 5, 6, 7, 9, 10.1, or 11
of this Act to arbitration under subsection (a), then a
proceeding before the Motor Vehicle Review Board as prescribed
by subsection (c) or (d) of Section 12 and Section 29 of this
Act for a remedy other than damages under paragraph (6) of
subsection (d) or paragraph (6), (8), (10), or (11) of
subsection (e) of Section 4 of this Act shall be commenced upon
receipt by the Motor Vehicle Review Board of a timely notice of
protest or within 60 days of the date the franchisee received
notice in writing by the franchiser of its determination under
any provision of those Sections other than paragraph (6) of
subsection (d) or paragraph (6), (8), (10), or (11) of
subsection (e) of Section 4 of this Act; however, if notice of
the provision under which the determination has been made is
not given by the franchiser, then the proceeding shall be
commenced as provided by Section 14 of this Act.
During the pendency of a proceeding under this Section, a
party may apply to a court of competent jurisdiction that shall
have power to modify or stay the effective date of a proposed
additional franchise or selling agreement, or the effective

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

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dealership during the 5 year period immediately preceding
such notice as compared to the business available to them;
(3) the investment necessarily made and obligations
incurred by the objecting motor vehicle dealer or dealers
and other motor vehicle dealers of the same line make with
a place of business in the relevant market area to be
served by the additional franchise or the relocated motor
vehicle dealership to perform their obligations under
existing franchises or selling agreements; and, the
manufacturer shall give reasonable credit for sales of
factory repurchase vehicles purchased by the objecting
motor vehicle dealer or dealers and other motor vehicle
dealers of the same line make with the place of business in
the relevant market area to be served by the additional
franchise or the relocated motor vehicle dealership, or the
additional motor vehicle dealership or other facility
limited to the sale of factory repurchase or late model
vehicles, at manufacturer authorized or sponsored auctions
in determining performance of obligations under existing
franchises or selling agreements relating to total new
vehicle sales;
(4) the permanency of the investment of the objecting
motor vehicle dealer or dealers and other motor vehicle
dealers of the same line make with a place of business in
the relevant market area to be served by the additional
franchise or the relocated motor vehicle dealership;

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

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

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

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

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