Oklahoma § 47-565.2 - See the following versions:

§ 47-565.2. See the following versions:

OS 47-565.2v1 (HB 3104, Laws 2024, c. 145, § 2).

OS 47-565.2v2 (HB 3105, Laws 2024, c. 240, § 9).

§47-565.2v1. Termination, cancellation or nonrenewal of new motor

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

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

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,

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

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

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%) straightline 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

Oklahoma Statutes - Title 47. Motor Vehicles

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

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

(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 linemake 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

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

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.

Added by Laws 1985, c. 229, § 10, eff. Nov. 1, 1985. Amended by

Laws 2000, c. 341, § 3, eff. Nov. 1, 2000; Laws 2014, c. 402, § 3,

eff. Nov. 1, 2014; Laws 2023, c. 29, § 10, eff. Nov. 1, 2023; Laws

2024, c. 145, § 2, eff. Nov. 1, 2024.

Oklahoma Statutes - Title 47. Motor Vehicles

§47-565.2v2. Termination, cancellation or nonrenewal of new motor

vehicle or new powersports 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 or new powersports 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 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 or new powersports 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 or new

powersports vehicle dealer has failed to comply with reasonable

performance criteria for sales or service established by the

manufacturer, and the new motor vehicle dealer or new powersports

vehicle dealer has been notified by written notice from the

manufacturer; and

2. The new motor vehicle dealer or new powersports 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 or new powersports 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 or new powersports 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;

Oklahoma Statutes - Title 47. Motor Vehicles

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 new

powersports vehicle dealer, or the filing of any

petition by or against the new motor vehicle dealer or

new powersports vehicle dealer under any bankruptcy or

receivership law,

b.

failure of the new motor vehicle dealer or new

powersports 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 vehicle dealer,

or

c.

conviction of the new vehicle dealer or new

powersports 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,

cancellation, or nonrenewal and the date the termination shall take

effect.

D. Upon the affected new motor vehicle or new powersports

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

Oklahoma Statutes - Title 47. Motor Vehicles

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, 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 or new powersports 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 dealer prevails in the threatened termination

action, the Commission shall award to the dealer the attorney fees

and costs incurred to defend the action.

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

or not renew any franchise, the new motor vehicle or new powersports

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 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 dealer;

3. Equipment and furnishings, provided the 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

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

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 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.

Oklahoma Statutes - Title 47. Motor Vehicles

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

not renew any franchise and the new motor vehicle or new powersports

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 subsection G of this section.

Nothing in this section shall be construed to relieve a new motor

vehicle or new powersports vehicle dealer of its duty to mitigate

damages.

G. 1. 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

b.

not substantially in excess of facilities recommended

by the manufacturer.

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

powersports vehicle dealer, within ninety (90) days following the

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

manufacturer will 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.

failing the foregoing, lease the dealership facilities

at a reasonable rental value for the portion of the

facility that is recognized in the franchise agreement

for one (1) year.

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

powersports vehicle dealer, 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 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

(1) year.

Oklahoma Statutes - Title 47. Motor Vehicles

4. The manufacturer shall not be obligated to provide

assistance under this section if the new motor vehicle or new

powersports 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

lessor if such agreement with the lessor would be

without cost to the 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.

H. In addition to the repurchase requirements set forth in

subsections E and G of this section, in the event the termination or

cancellation is the result of a discontinuance of a product line,

the manufacturer or distributor shall compensate the new motor

vehicle or new powersports vehicle dealer 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 dealer with a replacement franchise on

substantially similar terms and conditions as those offered to other

same line-make dealers. The 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. 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 a neutral third-party

mediator to resolve the disagreement.

Added by Laws 1985, c. 229, § 10, eff. Nov. 1, 1985. Amended by

Laws 2000, c. 341, § 3, eff. Nov. 1, 2000; Laws 2014, c. 402, § 3,

eff. Nov. 1, 2014; Laws 2023, c. 29, § 10, eff. Nov. 1, 2023; Laws

2024, c. 240, § 9, eff. Nov. 1, 2024.