Okla. Stat. tit. 47, § 47-565.2v1

vehicle dealer franchise.

A. Irrespective of the terms, provisions, or conditions of any

franchise, or the terms or provisions of any waiver, no manufacturer

shall terminate, cancel, or fail to renew any franchise with a

licensed new motor vehicle dealer unless the manufacturer has

satisfied the notice requirements as provided in this section and

has good cause for cancellation, termination, or nonrenewal. The

manufacturer shall not attempt to cancel or fail to renew the

franchise agreement of a new motor vehicle dealer in this state

unfairly and without just provocation or without due regard to the

equities of the dealer or without good faith as defined herein. As

used herein, “good faith” means the duty of each party to any

franchise agreement to act in a fair and equitable manner toward

Oklahoma Statutes - Title 47. Motor Vehicles Page 824

each other, with freedom from coercion or intimidation or threats

thereof from each other.

B. Irrespective of the terms, provisions, or conditions of any

franchise, or the terms or provisions of any waiver, good cause

shall exist for the purpose of a termination, cancellation, or

nonrenewal when:

1. The new motor vehicle dealer has failed to comply with a

provision of the franchise, which provision is both reasonable and

of material significance to the franchise relationship, or the new

motor vehicle dealer has failed to comply with reasonable

performance criteria for sales or service established by the

manufacturer, and the new motor vehicle dealer has been notified by

written notice from the manufacturer; and

2. The new motor vehicle dealer has received written

notification of failure to comply with the manufacturer’s reasonable

sales performance standards, capitalization requirements, facility

commitments, business-related equipment acquisitions, or other such

remediable failings exclusive of those reasons enumerated in

paragraph 1 of subsection C of this section, and the new motor

vehicle dealer has been afforded a reasonable opportunity of not

less than six (6) months to comply with such a provision or

criteria.

C. Irrespective of the terms, provisions, or conditions of any

franchise agreement prior to the termination, cancellation, or

nonrenewal of any franchise, the manufacturer shall furnish

notification of such termination, cancellation, or nonrenewal to the

new motor vehicle dealer and the Oklahoma New Motor Vehicle

Commission as follows:

1. Not less than ninety (90) days prior to the effective date

of the termination, cancellation, or nonrenewal unless for a cause

described in paragraph 2 of this subsection;

2. Not less than fifteen (15) days prior to the effective date

of the termination, cancellation, or nonrenewal with respect to any

of the following:

a. insolvency of the new motor vehicle dealer, or the

filing of any petition by or against the new motor

vehicle dealer under any bankruptcy or receivership

law,

b. failure of the new motor vehicle dealer to conduct its

customary sales and service operations during its

customary business hours for seven (7) consecutive

business days, provided that such failure to conduct

business shall not be due to an act of God or

circumstances beyond the direct control of the new

motor vehicle dealer, or

Oklahoma Statutes - Title 47. Motor Vehicles Page 825

c. conviction of the new motor vehicle dealer of any

felony which is punishable by imprisonment or a

violation of the Federal Odometer Act; and

3. Not less than one hundred eighty (180) days prior to the

effective date of the termination or cancellation where the

manufacturer or distributor is discontinuing the sale of the product

line.

The notification required by this subsection shall be by

certified mail, return receipt requested, and shall contain a

statement of intent to terminate, to cancel, or to not renew the

franchise, a statement of the reasons for the termination,
ys prior to the

effective date of the termination or cancellation where the

manufacturer or distributor is discontinuing the sale of the product

line.

The notification required by this subsection shall be by

certified mail, return receipt requested, and shall contain a

statement of intent to terminate, to cancel, or to not renew the

franchise, a statement of the reasons for the termination,

cancellation, or nonrenewal and the date the termination shall take

effect.

D. Upon the affected new motor vehicle dealer’s receipt of the

aforementioned notice of termination, cancellation, or nonrenewal,

the new motor vehicle dealer shall have the right to file a protest

of such threatened termination, cancellation, or nonrenewal with the

Commission within thirty (30) days and request a hearing. The

hearing shall be held within one hundred eighty (180) days of the

date of the timely protest by the dealer and in accordance with the

provisions of the Administrative Procedures Act, Sections 250

through 323 of Title 75 of the Oklahoma Statutes, to determine if

the threatened cancellation, termination, or nonrenewal of the

franchise has been for good cause and if the factory has complied

with its obligations pursuant to subsections A, B, and C of this

section and the factory shall have the burden of proof. Either

party may request an additional one-hundred-eighty-day extension of

the hearing date from the Commission. Approval of the requested

extension may not be unreasonably withheld or delayed. If the

Commission finds that the threatened cancellation, termination, or

nonrenewal of the franchise has not been for good cause or violates

subsection A, B, or C of this section, then it shall issue a final

order stating that the threatened termination is wrongful. A

factory shall have the right to appeal such order. During the

pendency of the hearing and after the decision, through any appeal,

the franchise shall remain in full force and effect, including the

right to transfer the franchise. If the Commission finds that the

threatened cancellation, termination, or nonrenewal is for good

cause and does not violate subsection A, B, or C of this section,

the new motor vehicle dealer shall have the right to an appeal.

During the pendency of the action, including the final decision or

appeal, the franchise shall remain in full force and effect,

including the right to transfer the franchise. If the new motor

vehicle dealer prevails in the threatened termination action, the

Commission shall award to the new motor vehicle dealer the attorney

fees and costs incurred to defend the action.

Oklahoma Statutes - Title 47. Motor Vehicles Page 826

E. If the factory prevails in an action to terminate, cancel,

or not renew any franchise, the new motor vehicle dealer shall be

allowed fair and reasonable compensation by the manufacturer for:

1. New, current, and previous model year vehicle inventory

which has been acquired from the manufacturer, and which is unused

and has not been damaged or altered while in the new motor vehicle

dealer’s possession;

2. Supplies and parts which have been acquired from the

manufacturer, for the purpose of this section, limited to any and

all supplies and parts that are listed on the current parts price

sheet available to the new motor vehicle dealer;

3. Equipment and furnishings, provided the new motor vehicle

dealer purchased them from the manufacturer or its approved sources;

and

4. Special tools, with such fair and reasonable compensation to

be paid by the manufacturer within ninety (90) days of the effective

date of the termination, cancellation, or nonrenewal, provided the

new motor vehicle dealer has clear title to the inventory and other

items and is in a position to convey that title to the manufacturer.

a. For the purposes of paragraph 1 of this subsection,

fair and reasonable compensation shall be no less than
ensation to

be paid by the manufacturer within ninety (90) days of the effective

date of the termination, cancellation, or nonrenewal, provided the

new motor vehicle dealer has clear title to the inventory and other

items and is in a position to convey that title to the manufacturer.

a. For the purposes of paragraph 1 of this subsection,

fair and reasonable compensation shall be no less than

the net acquisition price of the vehicle paid by the

new motor vehicle dealer.

b. For the purposes of paragraphs 2, 3, and 4 of this

subsection, fair and reasonable compensation shall be

the net acquisition price paid by the new motor

vehicle dealer less a twenty-percent (20%) straight-

line depreciation for each year following the dealer’s

acquisition of the supplies, parts, equipment,

furnishings, and/or special tools.

F. 1. If a factory prevails in an action to terminate, cancel,

or not renew any franchise and the new motor vehicle dealer is

leasing the dealership facilities, the manufacturer shall pay a

reasonable rent to the lessor in accordance with and subject to the

provisions of this subsection. Nothing in this section shall be

construed to relieve a new motor vehicle dealer of its duty to

mitigate damages.

Such reasonable rental value shall be paid only to the extent

the dealership premises are recognized in the franchise and only if

they are:

a. used solely for performance in accordance with the

franchise. If the facility is used for the operation

of more than one franchise, the reasonable rent shall

be paid based upon the portion of the facility

utilized by the franchise being terminated, canceled,

or nonrenewed, and

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b. not substantially in excess of facilities recommended

by the manufacturer.

2. If the facilities are owned by the new motor vehicle dealer,

a related entity as defined in 26 U.S.C.A., Section 267(b), or a

member, partner or shareholder of the dealership, within ninety (90)

days following the effective date of the termination, cancellation,

or nonrenewal, except a termination, cancellation, or nonrenewal for

a cause listed in paragraph 2 of subsection C of this section, at

the dealer or related entity’s written request, the manufacturer

shall either:

a. locate a qualified purchaser who will offer to

purchase the dealership facilities at a reasonable

price,

b. locate a qualified lessee who will offer to lease the

premises for the remaining lease term at the rent set

forth in the lease, or

c. lease the dealership facilities at a reasonable rental

value for the portion of the facility that is

recognized in the franchise agreement one and one-half

(1.5) years, or

d. purchase the dealer’s existing dealership facility and

real estate at its fair market value. If the factory

and dealer cannot agree on the fair market value of

the terminated franchise or agree to a process to

determine the fair market value, then the factory and

dealer shall utilize the process described in

paragraph 6 of subsection G of this section. If a

manufacturer or distributor purchases a dealership

facility and real estate, then it shall be entitled to

sole ownership, possession, use, and control of any

items, buildings, or property that were included in

the contract to purchase.

3. If the facilities are leased by the new motor vehicle dealer

from an entity other than a related entity as defined in 26

U.S.C.A., Section 267(b), or a member, partner, or shareholder of

the dealership, within ninety (90) days following the effective date

of the termination, cancellation, or nonrenewal the manufacturer

will either:

a. locate a tenant or tenants satisfactory to the lessor,

who will sublet or assume the balance of the lease,

b. arrange with the lessor for the cancellation of the

lease without penalty to the new motor vehicle dealer,

or

c. failing the foregoing, lease the dealership facilities
days following the effective date

of the termination, cancellation, or nonrenewal the manufacturer

will either:

a. locate a tenant or tenants satisfactory to the lessor,

who will sublet or assume the balance of the lease,

b. arrange with the lessor for the cancellation of the

lease without penalty to the new motor vehicle dealer,

or

c. failing the foregoing, lease the dealership facilities

at a reasonable rent for the portion of the facility

that is recognized in the franchise agreement for one

Oklahoma Statutes - Title 47. Motor Vehicles Page 828

(1) year or the remainder of the lease, whichever is

less.

4. The manufacturer shall not be obligated to provide

assistance under this section if the new motor vehicle dealer:

a. fails to accept a bona fide offer from a prospective

purchaser, sublessee, or assignee,

b. refuses to execute a settlement agreement with the

manufacturer or lessor if such agreement with the

manufacturer or lessor would be without cost to the

new motor vehicle dealer, or

c. fails to make written request for assistance under

this section within ninety (90) days after the

effective date of the termination, cancellation, or

nonrenewal.

5. The manufacturer shall be entitled to occupy and use any

space for which it pays rent required by this section.

G. In addition to the repurchase requirements set forth in

subsections E and F of this section, in the event the termination ,

cancellation, or nonrenewal is the result of a discontinuance of a

product line, the manufacturer or distributor shall compensate the

new motor vehicle dealer as follows:

1. In an amount equivalent to the fair market value of the

terminated franchise as of the date immediately preceding the

manufacturer’s or distributor’s announcement or provide the new

motor vehicle dealer with a replacement franchise on substantially

similar terms and conditions as those offered to other same line-

make dealers;

2. If the facilities are owned by the new motor vehicle dealer

or a related entity as defined in 26 U.S.C.A., Section 267(b), or a

member, partner, or shareholder of the dealership, and the owner has

not sold the existing dealership facility and real estate within the

later of one hundred eighty (180) days of listing the property for

sale or ninety (90) days after the effective date of the

termination, then, upon the written request of the dealer, the

manufacturer or distributor shall purchase the dealer’s existing

dealership facility and real estate. The facility and real estate

shall be valued as if a new motor vehicle dealership continues to

operate on the property. If the factory and dealer cannot agree on

the value of the terminated franchise or agree to a process to

determine the value, then the factory and dealer shall utilize the

process described in paragraph 6 of this subsection. If a

manufacturer or distributor purchases a dealership facility and real

estate, then it shall be entitled to sole ownership, possession,

use, and control of any items, buildings, or property that were

included in the contract to purchase;

3. If the facilities are leased by the new motor vehicle dealer

from an entity other than a related entity as defined in 26

Oklahoma Statutes - Title 47. Motor Vehicles Page 829

U.S.C.A., Section 267(b), or a member, partner or shareholder of the

dealership, lease the dealership facilities at a reasonable rent for

the remainder of the lease;

4. Any amount of pecuniary loss to the new motor vehicle

dealership proximately caused by the discontinuation of a product

line, including, but not limited to, the cost of terminating

services such as the dealership management system contract;

5. The new motor vehicle dealer may immediately request payment

under this section following the announcement in exchange for

canceling any further franchise rights, except payments owed to the

new motor vehicle dealer in the ordinary course of business, or may
f a product

line, including, but not limited to, the cost of terminating

services such as the dealership management system contract;

5. The new motor vehicle dealer may immediately request payment

under this section following the announcement in exchange for

canceling any further franchise rights, except payments owed to the

new motor vehicle dealer in the ordinary course of business, or may

request payment under this section upon the final termination,

cancellation, or nonrenewal of the franchise. In either case,

payment under this section shall be made not later than ninety (90)

days after the fair market value is determined, or the lease

agreement is provided and other reasonable documentation is provided

to the manufacturer or distributor sufficient to establish other

pecuniary losses, whichever is later; and

6. If the factory and new motor vehicle dealer cannot agree on

the value of the terminated franchise or real estate, or agree to a

process to determine the value, then, within thirty (30) days of a

written request by dealer, the factory shall select one appraiser,

and the dealer shall select one appraiser who shall make an

independent appraisal. The appraisers will be state-certified

general real estate appraisers and be in good standing with the

Oklahoma Real Estate Appraisal Board. Before entering upon their

duties, such appraisers shall take and subscribe an oath, before a

notary public or some other person authorized to administer oaths,

that they will perform their duties faithfully and impartially to

the best of their ability. If the appraisals are within ten percent

(10%) of each other, the average of the two appraisals shall

constitute the value. If the two appraisals differ by more than ten

percent (10%), the two appraisers may appoint a third appraiser who

shall review the two appraisals. The third appraisal, when taken

with the first two appraisals and averaged among the three, shall

establish the value. The cost of the third appraiser shall be

shared equally by the factory and dealer. The appraisers shall make

a valuation and determine the amount of compensation to be paid by

the factory to the dealer. The factory will then have ninety (90)

days to complete the transaction, unless otherwise agreed to by the

parties. The factory and the dealer shall each be responsible for

the appraiser it retains.