NYS Franchise Law 2013

franchise law

statement containing the basis or methodology upon which the dealer was selected for audit or review. 5. A franchisor shall not deny or charge back a payment for warranty work claimed by the dealer unless the franchisor satisfies its burden of proof that the dealer did not make a good faith effort to comply with the reasonable written procedures of the franchisor or that the dealer did not actually perform the work. 6. A franchisor shall not deny or charge back a sales incentive payment made to a dealer unless the claim was materially false or fraudulent or that the dealer failed to reasonably substantiate the claim either in accordance with the manufacturer’s reasonable procedures. 7. After all internal dispute resolution processes provided through the franchisor have been resolved, the franchisor shall give notice to the dealer of the final amount of a proposed warranty or sales incentive charge back. If the dealer institutes an action pursuant to this article within thirty days of receipt of such notice, the proposed charge back shall be stayed, without bond, during the pendency of such action and until the final judgment has been rendered in an adjudicatory proceeding or action as provided in section four hundred sixty-nine of this article. 466. Unreasonable restrictions 1.It shall be unlawful for a franchisor directly or indirectly to impose unreasonable restrictions on the franchised motor vehicle dealer relative to transfer, sale, right to renew or termination of a franchise, discipline, noncompetition covenants, site-control (whether by sublease, collateral pledge of lease or otherwise), right of first refusal to purchase, option to purchase, compliance with subjective standards and assertion of legal or equitable rights with respect to its franchise or dealership. 2. It shall be deemed an unreasonable restriction upon the sale or transfer of a dealership for a franchisor (i) directly or indirectly to prevent or attempt to prevent a franchised motor vehicle dealer from obtaining the fair value of the franchise or the fair value of the dealership business as a going concern; or (ii) to refuse to approve the sale or transfer of a dealership due to the fact that the franchised motor vehicle dealer owns, has an investment in, participates in the management of or holds a franchise

32