A. A franchised vehicle dealer proposing a sale, transfer, or assignment of a franchise agreement or the business and assets of a dealership or an interest in a dealership to another person, hereinafter transferee, shall notify the manufacturer or distributor whose vehicles the dealer is franchised to sell of the proposed action of the dealer. The manufacturer or distributor may make written request to the transferee to submit completed application forms and related information generally utilized by a manufacturer to evaluate such a proposal and a copy of all agreements related to the proposed sale, transfer, or assignment.

B. The approval by the manufacturer or distributor of the sale, transfer, or assignment shall not be unreasonably withheld unless the transferee is not of good moral character or fails to meet the written, reasonable, and uniformly applied requirements of the manufacturer or distributor relating to prospective franchisees. Approval of the transfer shall not be made contingent upon the transferee meeting unreasonable facility requirements or performance standards, but may be made contingent upon the transferee meeting reasonable written requirements. The burden of proof shall be upon the manufacturer or distributor to show good cause existed to withhold approval. The manufacturer or distributor that has made such a determination shall send a letter by certified mail to the dealer and the applicant of its refusal to approve the proposal, which shall include a statement of the specific grounds for refusal, within sixty (60) days after the later of:

1. Receipt by the manufacturer or distributor of the notice of the proposed sale, transfer, or assignment; or

2. Receipt by the manufacturer or distributor of the information requested from the transferee pursuant to subsection A of this section if the manufacturer or distributor has requested such information within fifteen (15) days of receipt of written notice of the proposed sale, transfer, or assignment.

C. Failure of the manufacturer or distributor to send its notice of refusal pursuant to subsection B of this section shall mean that the application for the proposed sale, transfer, or assignment is approved.

D. A dealer receiving notice of refusal of the sale, transfer, or assignment shall have the right to file a protest with the Commission within thirty (30) days of receipt of the refusal. A dealer receiving notice that the sale, transfer or assignment is contingent upon the transferee meeting facility and/or performance standards shall have the right to file a protest with the Commission within thirty (30) days of receipt of the notice. In the event a protest is filed, the manufacturer or distributor shall have the burden of proof to establish the transferee or the transferee's controlling executive management is not of good moral character or fails to meet the written reasonable and uniformly applied requirements of the manufacturer or distributor relating to prospective franchisees or that the facility requirements are not reasonable based on the reasons set forth in subparagraph d of paragraph 9 of Section 565 of this title.

Added by Laws 1999, c. 132, § 1, emerg. eff. April 27, 1999. Amended by Laws 2014, c. 402, § 4, eff. Nov. 1, 2014.