(a)It is an unfair practice for a manufacturer
to terminate a franchise in violation of IC 23-2-2.7-3. A dealer may not
transfer, assign, or sell the business and assets of a dealership or an
interest in the dealership to another person under an agreement that
contemplates or is conditioned on a continuation of the franchise
relationship with the manufacturer or distributor unless the dealer first:
(1)notifies the manufacturer or distributor of the dealer's decision
to make the transfer, assignment, or sale by written notice; and
(2)obtains the approval of the manufacturer or distributor.
The dealer must provide the manufacturer or distributor with
completed application forms and related information generally used by
the manufacturer or distributor to conduct a review of such a proposal
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(a) It is an unfair practice for a manufacturer
to terminate a franchise in violation of IC 23-2-2.7-3. A dealer may not
transfer, assign, or sell the business and assets of a dealership or an
interest in the dealership to another person under an agreement that
contemplates or is conditioned on a continuation of the franchise
relationship with the manufacturer or distributor unless the dealer first:
(1) notifies the manufacturer or distributor of the dealer's decision
to make the transfer, assignment, or sale by written notice; and
(2) obtains the approval of the manufacturer or distributor.
The dealer must provide the manufacturer or distributor with
completed application forms and related information generally used by
the manufacturer or distributor to conduct a review of such a proposal
and a copy of all agreements regarding the proposed transfer,
assignment, or sale.
(b) The manufacturer or distributor shall send a letter by certified
mail to the dealer not later than sixty (60) days after the manufacturer
or distributor receives the information specified in subsection (a). The
letter must indicate any disapproval of the transfer, assignment, or sale
and must set forth the material reasons for the disapproval. If the
manufacturer or distributor does not respond by letter within sixty (60)
days after the manufacturer or distributor receives the information
under subsection (a), the manufacturer's or distributor's consent to the
proposed transfer, assignment, or sale is considered to have been
granted. A manufacturer or distributor may not unreasonably withhold
approval of a transfer, assignment, or sale under this section.
(c) A manufacturer or distributor has a right of first refusal as
specified in the franchise agreement to acquire the new motor vehicle
dealer's assets or ownership if there is a proposed change of more than
fifty percent (50%) of the dealer's ownership or proposed transfer of
more than fifty percent (50%) of the new motor vehicle dealer's assets,
and all the following are met:
(1) The manufacturer or distributor notifies the dealer in writing
of the intent of the manufacturer or distributor to exercise the
right of first refusal within the sixty (60) day notice period under
subsection (b).
(2) The exercise of the right of first refusal will result in the dealer
and the dealer's owners receiving consideration, terms, and
conditions that are either the same as or better than those they
have contracted to receive under the proposed change of more
than fifty percent (50%) of the dealer's ownership or transfer of
more than fifty percent (50%) of the new motor vehicle dealer's
assets.
(3) The proposed change of the dealership's ownership or transfer
of the new motor vehicle dealer's assets does not involve the
transfer of assets or the transfer or issuance of stock by the dealer
or one (1) or more of the dealer's owners to any of the following:
(A) A designated family member or members, including any of
the following members of one (1) or more dealer owners:
(i) The spouse.
(ii) A child.
(iii) A grandchild.
(iv) The spouse of a child or a grandchild.
(v) A sibling.
(vi) A parent.
(B) A manager:
(i) employed by the dealer in the dealership during the
previous four (4) years; and
(ii) who is otherwise qualified as a dealer operator.
(C) A partnership or corporation controlled by any of the family
members described in clause (A).
(D) A trust arrangement established or to be established:
(i) for the purpose of allowing the new motor vehicle dealer
to continue to qualify as such under the manufacturer's or
distributor's standards; or
(ii) to provide for the succession of the franchise agreement
to designated family members or qualified management in the
event of the death or incapacity of the dealer or the principal
owner or owners.
(4) Except as otherwise provided in this subsection, the
manufacturer or distributor agrees to pay the reasonable expenses,
including reasonable attorney's fees, that do not exceed the usual,
customary, and reasonable fees charged for similar work done for
other clients, and that are incurred by the proposed owner or
transferee before the manufacturer's or distributor's exercise of the
right of first refusal in negotiating and implementing the contract
for the proposed change of the dealer ownership or the transfer of
the new motor vehicle dealer's assets. Payment of expenses and
attorney's fees is not required if the dealer has failed to submit an
accounting of those expenses not later than twenty (20) days after
the dealer receives the manufacturer's or distributor's written
request for such an accounting. An expense accounting may be
requested by a manufacturer or distributor before exercising the
right of first refusal.
(d) Violation of this section by a manufacturer or distributor is an
unfair practice by the manufacturer or distributor.