A. Anything to the contrary notwithstanding, it is unlawful for the manufacturer, distributor or representative without due cause to fail to renew a franchise on terms then equally available to all its motor vehicle dealers or their prospective purchasers, to terminate a franchise or to restrict the transfer of a franchise unless the dealer receives fair and reasonable compensation for the value of the business. A prospective purchaser may enforce the provisions of this section whether or not the person is a dealer.

B. A public announcement by a manufacturer or distributor of an intention to cease manufacturing or distribution of a motor vehicle brand within three years of the announcement or upon expiration of a dealers' current franchise or selling agreement may at the option of an affected dealer be deemed an anticipatory involuntary termination of the dealer's franchise.

History: 1953 Comp., § 64-37-9, enacted by Laws 1973, ch. 6, § 9; 1997, ch. 31, § 3; 2010, ch. 38, § 3; 2010, ch. 40, § 3.

Cross references. — For termination or cancellation of a franchise, see 57-16-5 NMSA 1978.

The 2010 amendment, effective March 8, 2010, in the catchline, after "termination", added "anticipatory termination"; in Subsection A, in the first sentence, after "fail to renew", added "a franchise"; and added Subsection B.

Laws 2010, ch. 38, § 3 and Laws 2010, ch. 40, § 3 enacted identical amendments to this section. The section was set out as amended by Laws 2010, ch. 40, § 3. See 12-1-8 NMSA 1978.

The 1997 amendment, effective June 20, 1997, inserted "or their prospective purchasers" in the first sentence, added the second sentence, and made stylistic changes throughout the section.

Purpose of section. — This section was intended to forbid conduct that is otherwise lawful under the act. Key v. Chrysler Motors Corp., 1996-NMSC-038, 121 N.M. 764, 918 P.2d 350.

Inapplicable to prospective franchisees. — This article does not govern manufacturers' dealings with prospective franchisees, nor does it provide in explicit terms protection for that class. Key v. Chrysler Motors Corp., 1996-NMSC-038, 121 N.M. 764, 918 P.2d 350.

Standing. — This article requires only that the manufacturer act with due cause; when an existing dealer was denied the acquisition of an additional franchise based on his past performance, the dealer did not show the requisite injury to recover under this Act. Key v. Chrysler Motors Corp., 1996-NMSC-038, 121 N.M. 764, 918 P.2d 350.

Am. Jur. 2d, A.L.R. and C.J.S. references. — 62B Am. Jur. 2d Private Franchise Contracts §§ 564 to 658.

Validity and construction of statute regulating dealings between automobile manufacturers, distributors and dealers, 7 A.L.R.3d 1173, 82 A.L.R.4th 624, 51 A.L.R. Fed. 812.