H.B. 149 Enrolled

NEW AUTOMOBILE FRANCHISE ACT
2004 GENERAL SESSION
STATE OF UTAH
Sponsor: Greg J. Curtis

LONG TITLE
General Description:
This bill modifies the New Automobile Franchise Act to amend provisions relating to the
issuance or relocation of a franchise.
Highlighted Provisions:
This bill:
. requires a franchisor to provide certain documents with a notice that the franchisor
intends to enter into a franchise or relocate a franchise within the relevant market
area to the Utah Motor Vehicle Franchise Advisory Board and existing franchisees
within the relevant market area except in certain circumstances; and
. makes technical changes.
Monies Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
13-14-302, as last amended by Chapter 86, Laws of Utah 2000
13-14-304, as last amended by Chapter 86, Laws of Utah 2000

Be it enacted by the Legislature of the state of Utah:
Section 1. Section 13-14-302 is amended to read:
13-14-302. Issuance of additional franchises -- Relocation of existing franchisees.
(1) [(a)] Except as provided in Subsection [(2)] (6), a franchisor shall [comply with]

provide the notice and documentation required under Subsection [(1)(b)] (2) if the franchisor
seeks to:
[(i)] (a) enter into a franchise agreement establishing a motor vehicle dealership within a
relevant market area where the same line-make is represented by another franchisee; or
[(ii)] (b) relocate an existing motor vehicle [dealership] franchisee.
[(b) (i)] (2) (a) If a franchisor seeks to take an action listed Subsection (1)[(a)], prior to
taking the action, the franchisor shall, in writing, notify the board and each franchisee in that
line-make in the relevant market area [that the franchisor intends to take an action described in
Subsection (1)(a)].
[(ii)] (b) The notice required by Subsection [(1)(b)(i)] (2)(a) shall:
(i) specify the intended action described under Subsection (1);
[(A)] (ii) specify the good cause on which it intends to rely for the action; and
[(B)] (iii) be delivered by registered or certified mail or by any form of reliable electronic
communication through which receipt is verifiable.
(3) (a) Except as provided in Subsection (3)(c), the franchisor shall provide to the board
and each franchisee in that line-make in the relevant market area the following documents relating
to the notice described under Subsection (2):
(i) (A) any aggregate economic data and all existing reports, analyses, or opinions based
on the aggregate economic data that were relied on by the franchisor in reaching the decision to
proceed with the action described in the notice; and
(B) the aggregate economic data under Subsection (3)(a)(i)(A) includes:
(I) motor vehicle registration data;
(II) market penetration data; and
(III) demographic data;
(ii) written documentation that the franchisor has in its possession that it intends to rely
on in establishing good cause under Section 13-14-306 relating to the notice;
(iii) a statement that describes in reasonable detail how the establishment of a new
franchisee or the relocation of an existing franchisee will affect the amount of business transacted

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by other franchisees of the same line-make in the relevant market area, as compared to business
available to the franchisees; and
(iv) a statement that describes in reasonable detail how the establishment of a new
franchisee or the relocation of an existing franchisee will be beneficial or injurious to the public
welfare or public interest.
(b) The franchisor shall provide the documents described under Subsection (3)(a) with the
notice required under Subsection (2).
(c) The franchisor is not required to disclose any documents under Subsection (3)(a) if:
(i) the documents would be privileged under the Utah Rules of Evidence;
(ii) the documents contain confidential proprietary information;
(iii) the documents are subject to federal or state privacy laws;
(iv) the documents are correspondence between the franchisor and existing franchisees in
that line-make in the relevant market area; or
(v) the franchisor reasonably believes that disclosure of the documents would violate:
(A) the privacy of another franchisee; or
(B) Section 13-14-201 .
[(c)] (4) Within 45 days of receiving notice required by Subsection [(1)(b)] (2), any
franchisee that is required to receive notice under Subsection [(1)(b)] (2) may protest to the board
the [establishing] establishment or [relocating] relocation of the dealership. When a protest is
filed, the board shall inform the franchisor that:
[(i)] (a) a timely protest has been filed;
[(ii)] (b) a hearing is required;
[(iii)] (c) the franchisor may not establish or relocate the proposed dealership until the
board has held a hearing; and
[(iv)] (d) the franchisor may not establish or relocate a proposed dealership if the board
determines that there is not good cause for permitting the establishment or relocation of the
dealership.
[(d)] (5) If multiple protests are filed under Subsection [(1)(c)] (4), hearings may be

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consolidated to expedite the disposition of the issue.
[(2)] (6) [Subsection] Subsections (1) [does] through (5) do not apply to a relocation that
is:
(a) less than one aeronautical mile from the existing location of the franchisee's
dealership; and
(b) within the same county.
[(3)] (7) For purposes of this section:
(a) relocation of an existing franchisee's dealership in excess of one mile from its existing
location is considered the establishment of an additional franchise in the line-make of the
relocating franchise; and
(b) the reopening in a relevant market area of a dealership that has not been in operation
for one year or more is considered the establishment of an additional motor vehicle dealership.
Section 2. Section 13-14-304 is amended to read:
13-14-304. Hearing regarding termination, relocation, or establishment of
franchises.
(1) (a) Within ten days of receiving an application from a franchisee under Subsection
13-14-301 (3) challenging its franchisor's right to terminate or not continue a franchise, or an
application under [Subsection] Section 13-14-302 [(1)] challenging the establishment or relocation
of a franchise, the board shall:
(i) enter an order designating the time and place for the hearing; and
(ii) send a copy of the order by certified or registered mail, with return receipt requested,
or by any form of reliable electronic communication through which receipt is verifiable to:
(A) the applicant;
(B) the franchisor; and
(C) if the application involves the establishment of a new franchise or the relocation of an
existing dealership, to all franchisees in the relevant market area engaged in the business of
offering to sell or lease the same line-make.
(b) A copy of an order mailed under Subsection (1)(a) shall be addressed to the franchisee

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at the place where the franchisee's business is conducted.
(2) Any person who can establish to the board an interest in the application may intervene
as a party to the hearing, whether or not that person receives notice.
(3) Any person may appear and testify on the question of the public interest in the
termination or noncontinuation of a franchise or in the establishment of an additional franchise.
(4) (a) Any hearing ordered under Subsection (1) shall be conducted no later than 120
days after the application for hearing is filed. A final decision on the challenge shall be made by
the board no later than 30 days after the hearing.
(b) Failure to comply with the time requirements of Subsection (4)(a) is considered a
determination that the franchisor acted with good cause or, in the case of a protest of a proposed
establishment or relocation of a dealer, that good cause exists for permitting the proposed
additional or relocated new motor vehicle dealer, unless:
(i) the delay is caused by acts of the franchisor or the additional or relocating franchisee;
or
(ii) the delay is waived by the parties.
(5) The franchisor has the burden of proof to establish that under the provisions of this
chapter it should be granted permission to:
(a) terminate or not continue the franchise;
(b) enter into a franchise agreement establishing an additional franchise; or
(c) relocate the dealership of an existing franchisee.

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