13-14-307. Franchisor's obligations upon termination or noncontinuation of
franchise or line-make.
(1) Upon the termination or noncontinuation of a franchise or a line-make by the
franchisor, the franchisor shall pay the franchisee:
(a) the franchisee's cost of new, undamaged, and unsold motor vehicles in the
franchisee's inventory acquired from the franchisor or another franchisee of the same line-make
representing both the current model year at the time of termination or noncontinuation and the
immediately prior model year vehicles:
(i) plus any charges made by the franchisor, for distribution, delivery, or taxes;
(ii) plus the franchisee's cost of any accessories added on the vehicle, except only those
recreational vehicle accessories that are listed in the franchisor's wholesale product literature as
options for that vehicle shall be repurchased; and
(iii) less all allowances paid or credited to the franchisee by the franchisor;
(b) the franchisee's cost of new and undamaged motor vehicles in the franchisee's
inventory of demonstrator vehicles, reduced by 1% for each 1000 miles registered on the
demonstrator vehicle's odometer, except recreational vehicles whose cost shall be reduced by 2%
for each 1,000 miles registered on the odometer of demonstrator self-propelled recreational
vehicles, exclusive of miles incurred in delivery of the vehicle, and the cost of demonstrator
nonself-propelled recreational vehicles shall be reduced by 10% of the franchisee's vehicle cost:
(i) plus any charges made by the franchisor for distribution, delivery, or taxes;
(ii) plus the franchisee's cost of any accessories added on the vehicles, except only those
recreational vehicle accessories that are listed in the franchisor's wholesale product literature as
options for that vehicle shall be repurchased; and
(iii) less all allowances paid or credited to the franchisee by the franchisor;
(c) the cost of all new, undamaged, and unsold supplies, parts, and accessories as set
forth in the franchisor's catalog at the time of termination or noncontinuation for the supplies,
parts, and accessories, less all allowances paid or credited to the franchisee by the franchisor;
(d) the fair market value, but not less than the franchisee's depreciated acquisition cost of
each undamaged sign owned by the franchisee that bears a common name, trade name, or
trademark of the franchisor if acquisition of the sign was recommended or required by the
franchisor. If a recreational vehicle franchisee has a sign with multiple manufacturers listed, the
franchisor is only responsible for its pro rata portion of the sign;
(e) the fair market value, but not less than the franchisee's depreciated acquisition cost of
all special tools, equipment, and furnishings acquired from the franchisor or sources approved by
the franchisor that were recommended or required by the franchisor and are in good and usable
condition;
(f) the cost of transporting, handling, packing, and loading motor vehicles, supplies,
parts, accessories, signs, special tools, equipment, and furnishings;
(g) reasonable compensation to the franchisee for any cost incurred pertaining to the
unexpired term of a lease agreement for the dealership's existing location;
(h) the negotiated fair market value of the dealership premises, based on the fair market
value of the real property, if the dealer opts to sell the dealership premises; and
(i) compensate the franchisee for the blue sky or goodwill of the dealership, as
determined in accordance with the applicable industry standards taking into consideration the
effect that the timing of the manufacturer's announcement of discontinuance of a line make has or
will have on future profitability of the dealership.
(2) Subsections (1)(g), (h), and (i) do not apply if a franchise is terminated:
(a) by the franchisor for cause as defined in Subsections 13-14-301(1)(b) and (2)(a);
(b) upon mutual written agreement of the franchisor and franchisee as provided in
Subsection 13-14-301(2)(b); or
(c) upon voluntary termination by the franchisee as provided in Subsection 13-14-301(4).
(3) The franchisor shall pay the franchisee the amounts specified in Subsection (1) within
90 days after the tender of the property to the franchisor if the franchisee:
(a) has clear title to the property; and
(b) is in a position to convey title to the franchisor.
(4) If repurchased inventory, equipment, or demonstrator vehicles are subject to a
security interest, the franchisor may make payment jointly to the franchisee and to the holder of
the security interest.
Amended by Chapter 318, 2009 General Session
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Last revised: Thursday, May 28, 2009