§ 42-133dd — Establishment of new franchises within a market area. Notice of intention. Protests. Procedure. Hearing.

Connecticut § 42-133dd

• Jurisdiction: Connecticut
• Title 42: Business, Selling, Trading and Collection Practices
• Ch. 739: Trading Stamps, Mail Orders, Franchises, Credit Programs and Subscriptions

Text

(a) In the event that a manufacturer or distributor seeks to enter into a franchise establishing a new dealer or relocating an existing dealer within or into a relevant market area where the same line make is then represented, the manufacturer or distributor shall in writing, by certified mail, first notify the commissioner and each dealer in such line make in the relevant market area of its intention to establish a new dealer or to relocate an existing dealer within or into that market area. Within twenty days of receiving such notice or within twenty days after the end of any appeal procedure provided by the manufacturer or distributor, any such dealer may file with the commissioner a protest concerning the proposed establishment or relocation of such new or existing dealer. When such a protest is filed, the commissioner shall inform the manufacturer or distributor that a timely protest has been filed, and that the manufacturer or distributor shall not establish or relocate the proposed dealer until the commissioner has held a hearing, nor thereafter, if the commissioner determines that there is good cause for denying the establishment or relocation of such dealer. In any hearing held pursuant to this section, the manufacturer or distributor has the burden of proving that good cause exists for permitting the proposed establishment or relocation. This section shall not apply to the sale, lease or transfer of ownership of an active, existing dealer, nor shall any provision of this section prohibit a manufacturer from entering into a franchise arrangement with a successor dealer at the same location. (b) This section shall not apply to (1) the relocation of an existing dealer within that dealer's area of responsibility under its franchise, provided that the relocation shall not be at a site within six miles of a licensed dealer for the same line make of motor vehicle, (2) the appointment of a dealer in the same relevant market area, within one year, at either the same location or within a two-mile radius from a predecessor dealer who ceased operations, or (3) the sale of new or used motor vehicles by a licensed new motor vehicle dealer at a public display of motor vehicles sponsored by an association of licensed new motor vehicle dealers representing more than seventy-five per cent of such dealers in the state. Such display shall be permitted annually, for a period not exceeding four consecutive days. (c) In determining whether good cause has been established for not entering into a franchise establishing a new dealer or relocating an existing dealer for the same line make, the commissioner shall take into consideration the existing circumstances, including, but not limited to: (1) The permanency and size of investment made and the reasonable obligations incurred by the existing new motor vehicle dealers in the relevant market area; (2) growth or decline in population and new car registrations in the relevant market area; (3) effect on the consuming public in the relevant market area; (4) whether it is injurious or beneficial to the public welfare for a new dealer to be established; (5) whether the dealers of the same line make in that relevant market area are providing adequate competition and convenient customer care for the motor vehicles of the line make in the market area including the adequacy of motor vehicle sales and service facilities, equipment, supply of motor vehicle parts, and qualified service personnel; (6) whether the establishment of a new dealer would increase or decrease competition; (7) the effect on the relocating dealer of a denial of its relocation into the relevant market area; (8) whether the establishment or relocation of the proposed dealership appears to be warranted and justified based on economic and marketing conditions pertinent to dealers competing in the community or territory, including anticipated future changes; (9) the reasonably expected market penetration of the line-maker motor vehicle for the community or territory involved, after consideration of all factors which may affect said penetration, including, but not limited to, demographic factors such as age, income, education, size class preference, product popularity, retail lease transactions, or other factors affecting sales to consumers of the community or territory; (10) the economic impact of an additional franchise or relocated motor vehicle dealership upon the existing motor vehicle dealers of the same line make in the relevant market area to be served by the additional franchisee or relocated motor vehicle dealership; and (11) the retail sales and service business transacted by the existing dealers of the same line make in the market area to be served by the proposed new or relocated dealer as compared to the business available to them during the three-year period immediately preceding notice. (d) The commissioner shall conduct the hearing and render his final determination within one hundred eighty days after a protest is filed. Unless waived by the parties, failure to do so shall be deemed a determination that good cause does not exist for refusing to permit the proposed new or relocated dealer, unless such delay is caused by acts of the manufacturer or distributor or the relocating or new dealer. (e) Any parties to a hearing by the commissioner concerning the establishing or relocating of a dealer may appeal any decision or order of the commissioner in accordance with section 4-183 .

Legislative History

(P.A. 82-445, S. 13, 15; P.A. 83-198, S. 10, 11; P.A. 84-463; P.A. 93-234, S. 2; P.A. 02-70, S. 45; P.A. 10-110, S. 32.) History: P.A. 83-198 subjected distributors to the provisions of this section; P.A. 84-463 changed reference from additional dealerships to new dealerships and excluded franchise agreements and transfers of existing dealerships from the provisions of this section; P.A. 93-234 made technical changes, required that notice requirement in Subsec. (a) be sent by certified mail, amended Subsec. (b) to exclude from applicability of section dealers appointed within one year at same location or within two-mile radius of predecessors who ceased operations and added Subsec. (c)(8) to (11) requiring commissioner to consider additional factors when determining if good cause exists for refusing to allow establishment or relocation of dealership; P.A. 02-70 amended Subsec. (a) to provide that the manufacturer or distributor has the burden of proving that good cause exists for permitting a proposed establishment or relocation of a motor vehicle franchise in any hearing held pursuant to section; P.A. 10-110 amended Subsec. (b) by adding Subdiv. (3) re sale of motor vehicles by dealer at public display. Cited. 192 C. 558; 239 C. 437.