§ 650.133 — Constructing, altering or remodeling dealer facility; prohibitions; exceptions; purchasing goods or services from specific vendor; intellectual property infringement

Oregon § 650.133

• Jurisdiction: Oregon
• Vol.: 16
• Title 50: Trade Regulations and Practices
• Ch. 650: Franchise Transactions

Text

(1)(a) Except as provided in paragraph (b) of this subsection, a manufacturer, distributor or importer may not require a dealer to construct a new dealer facility or materially alter or remodel an existing dealer facility within seven years after the date on which the dealer previously constructed, materially altered or remodeled the existing dealer facility if the existing dealer facility complies with the manufacturer’s, distributor’s or importer’s approved brand image standards or plans that existed at the time the dealer constructed, materially altered or remodeled the existing dealer facility.
(b) A manufacturer, distributor or importer may require a dealer to construct a new dealer facility or materially alter or remodel an existing dealer facility within seven years after the dealer constructed, materially altered or remodeled the existing dealer facility:
(A) If the manufacturer, distributor or importer demonstrates that the manufacturer’s, distributor’s or importer’s requirement is reasonable and justifiable in light of:
(i) The projected cost of the construction, material alteration or remodel;
(ii) Existing and reasonably foreseeable economic conditions;
(iii) Financial expectations;
(iv) The availability of additional vehicle allocation; and
(v) The dealer’s market for vehicle sales;
(B) In order to comply with a health or safety law or with a technological requirement that is necessary to sell or service a motor vehicle that the dealer sells or services under the terms of the dealer’s franchise; or
(C) By means of a written agreement separate from the franchise agreement if the manufacturer, distributor or importer provides money, credit, an allowance, an incentive or a reimbursement to the dealer to compensate for all or a substantial portion of the cost of constructing a new dealer facility or materially altering or remodeling an existing dealer facility.
(c) Paragraph (a) of this subsection does not prohibit a dealer from voluntarily agreeing with a manufacturer, distributor or importer to construct a new dealer facility or materially alter or remodel an existing dealer facility in return for separate and valuable consideration. For the purposes of this paragraph, renewing a dealer’s franchise is not separate and valuable consideration.
(d) For purposes of this subsection:
(A) “Materially alter” means a significant architectural or structural modification to a dealer facility that is directly related to effectively selling or servicing motor vehicles of the type that the dealer’s franchise agreement or license permits the dealer to sell or service.
(B) “Materially alter” does not include routine maintenance, such as interior painting, that is reasonably necessary to keep a dealer facility in attractive condition.
(2)(a) Except as provided in paragraph (b) of this subsection, a manufacturer, distributor or importer may not require a dealer to purchase goods or services for constructing, materially altering or remodeling a dealer facility from a vendor that the manufacturer, distributor or importer selects, identifies or designates without giving the dealer an option to obtain goods or services of substantially similar quality and design from a vendor that the dealer chooses, subject to the manufacturer’s, distributor’s or importer’s written approval in advance. The manufacturer, distributor or importer may not withhold approval unreasonably and must approve or disapprove within 20 business days after a dealer’s written request to purchase goods and services from a source other than a source the manufacturer, distributor or importer selects, identifies or designates. If the manufacturer, distributor or importer does not disapprove the dealer’s request in writing within 20 business days after receiving the request, the request is approved.
(b) A dealer may not select a vendor from which to obtain goods and services for constructing a new dealer facility or materially altering or remodeling an existing dealer facility if a manufacturer, distributor or importer provides money, credit, an allowance or a reimbursement to compensate for all or a substantial portion of the cost of upgrading or improving a dealer facility or for using a specific material, good or service to upgrade or improve a dealer facility.
(c) This subsection does not permit a dealer or vendor to:
(A) Directly or indirectly or in any way infringe upon, eliminate or impair a manufacturer’s, distributor’s or importer’s intellectual property rights or reasonable business requirements; or
(B) Erect or maintain signs that do not conform to the manufacturer’s, distributor’s or importer’s intellectual property usage guidelines.
(3) A manufacturer, distributor or importer has the burden of proof in a dispute with a dealer over whether:
(a) A requirement the manufacturer, distributor or importer imposes under subsection (1)(b) of this section is reasonable and justifiable or is necessary to comply with a health or safety law or technological requirement; or
(b) A disapproval of a request to purchase goods or services under subsection (2)(a) of this section was reasonable.

Legislative History

2013 c.329 §2; 2025 c.50 §4