New York State Franchise Law for New Car Dealers

HIGHLIGHTS

Limitations on Participation in Factory Training Programs – 463(1)(d)

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• Prohibits franchisors from requiring dealership employees to participate in training programs unless the programs are limited to information needed to sell or service vehicles. • Prohibits franchisors from unreasonably requiring attendance of a dealer-principal in training sessions. • Requires franchisors to employ reasonable efforts to limit or reimburse dealer costs for factory training programs.

Non-factory Service Contracts – 463(1)(e)

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• Prohibits franchisors from requiring dealers to sell only extended service contracts offered by the franchisor.

Limits on Changes to, or Control of a Facility – 463(2)(c) • Prohibits franchisors from unreasonably requiring facility upgrades. • Requires franchisors to submit to a dealer more detailed projections to support any request for renovations. • Prohibits a franchisor from conditioning the renewal or extension of a franchise agreement on the dealer constructing a new facility or renovating an existing facility, unless the franchisor provides at least 180 days notice and can demonstrate that the updated facility is needed and reasonable in light of economic conditions in the automotive industry. • Requires franchisors requesting new facilities to agree, in writing, to supply a dealer with additional vehicles needed to support the increased overhead as a result of any required construction or renovation. • Prohibits franchisors from forcing a dealer to perform repeated facility upgrades or rejecting construction materials or services that are chosen by dealers that are substantially similar to those required by franchisors. page 26

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