Texas § OC.2301.467 - PROHIBITIONS

§ OC.2301.467. PROHIBITIONS

PROHIBITIONS: SALES STANDARDS, RELOCATIONS, FACILITY CHANGES, PURCHASE OF EQUIPMENT. (a) Notwithstanding the terms of any franchise, a manufacturer, distributor, or representative may not: (1) require adherence to unreasonable sales or service standards; or (2) unreasonably require a franchised dealer to purchase special tools or equipment. (b) Notwithstanding the terms of any franchise, a manufacturer, distributor, or representative may not unreasonably require a franchised dealer to relocate, or to replace or substantially change, alter, or remodel the dealer's facilities. Except as provided by Subsections (b-1) and (b-2), an act is reasonable if it is justifiable in light of current and reasonably foreseeable projections of economic conditions, financial expectations, and the market for new motor vehicles in the relevant market area. (b-1) Except as necessary to comply with health or safety laws or to comply with technology requirements necessary to sell or service a line-make, it is unreasonable for a manufacturer, distributor, or representative to require a franchised dealer to construct a new dealership or to substantially change, alter, or remodel an existing dealership before the 10th anniversary of the date the construction of the dealership at that location was completed if the construction was in substantial compliance with standards or plans provided by a manufacturer, distributor, or representative or through a subsidiary or agent of the manufacturer, distributor, or representative. (b-2) Except as necessary to comply with health or safety laws or to comply with technology requirements necessary to sell or service a line-make, it is unreasonable for a manufacturer, distributor, or representative to require a franchised dealer to substantially change, alter, or remodel an existing dealership before the 10th anniversary of the date that a prior change, alteration, or remodel of the dealership at that location was completed if the change, alteration, or remodel was in substantial compliance with standards or plans provided by a manufacturer, distributor, or representative or through a subsidiary or agent of the manufacturer, distributor, or representative. (c) This section applies to the relationship between a manufacturer, distributor, or representative and: (1) a current franchisee of the manufacturer, distributor, or representative; (2) a successor of a current franchisee of the manufacturer, distributor, or representative; or (3) a franchised dealer who is seeking to become a franchisee of the manufacturer, distributor, or representative. Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003. Amended by: Acts 2009, 81st Leg., R.S., Ch. 684 (H.B. 2640 ), Sec. 5, eff. September 1, 2009. Acts 2011, 82nd Leg., R.S., Ch. 137 (S.B. 529 ), Sec. 5, eff. September 1, 2011.