                                 CODE OF VIRGINIA

OTHER COERCION OF DEALERS; TRANSFER, GRANT, SUCCESSION TO AND CANCELLATION OF
DEALER FRANCHISES; DELIVERY OF MOTORCYCLES, PARTS, AND ACCESSORIES (§
46.2-1573.28)

It shall be unlawful for any manufacturer, factory branch, distributor, or
distributor branch, or any field representative, officer, agent, or their
representatives:

1. To coerce or attempt to coerce any dealer to accept delivery of any
motorcycle or motorcycles, parts or accessories therefor, or any other
commodities that have not been ordered by the dealer.

2. To coerce or attempt to coerce any dealer to enter into an agreement with the
manufacturer, factory branch, distributor, or distributor branch, or
representative thereof, or do any other act unfair to the dealer, by threatening
to cancel any franchise existing between the manufacturer, factory branch,
distributor, distributor branch, or representative thereof and the dealer.

3. To coerce or attempt to coerce any dealer to join, contribute to, or
affiliate with any advertising association.

4. To prevent or refuse to approve the sale or transfer of the ownership of a
dealership by the sale of the business, stock transfer, or otherwise, or the
transfer, sale, or assignment of a dealer franchise, or a change in the
executive management or principal operator of the dealership, unless the
franchisor provides written notice to the dealer of its objection and the
reasons therefor at least 30 days prior to the proposed effective date of the
transfer, sale, assignment, or change. No such objection shall be effective to
prevent the sale, transfer, assignment, or change if the Commissioner has
determined, if requested in writing by the dealer within 30 days after receipt
of an objection to the proposed sale, transfer, or change, and after a hearing
on the matter, that the failure to permit or honor the sale, transfer,
assignment, or change is unreasonable under the circumstances. No franchise may
be sold, assigned, or transferred unless (i) the franchisor has been given at
least 90 days&#8217; prior written notice by the dealer as to the identity,
financial ability, and qualifications of the proposed transferee and (ii) the
sale or transfer of the franchise and business will not involve, without the
franchisor&#8217;s consent, a relocation of the business.

5. To grant an additional franchise for a particular line-make of motorcycle in
a relevant market area in which a dealer or dealers in that line-make are
already located unless the franchisor has first advised in writing, by certified
mail, return receipt requested, all other dealers in the line-make in the
relevant market area. No such additional franchise may be established at the
proposed site unless the Commissioner has determined, if requested by a dealer
of the same line-make in the relevant market area within 30 days after receipt
of the franchisor&#8217;s notice of intention to establish the additional
franchise, and after a hearing on the matter, that there is reasonable evidence
that after the grant of the new franchise, the market will support all of the
dealers in that line-make in the relevant market area. Establishing a franchised
dealer in a relevant market area to replace a franchised dealer that has not
been in operation for more than two years shall constitute the establishment of
a new franchise subject to the terms of this subdivision. The two-year period
for replacing a franchised dealer shall begin on the day the franchise was
terminated or, if a termination hearing was held, on the day the franchisor was
legally permitted finally to terminate the franchise. This subdivision shall not
apply to (i) the relocation of an existing dealer within that dealer&#8217;s
relevant market area if the relocation site is to be more than 10 miles distant
from any other dealer for the same line-make; (ii) the relocation of an existing
dealer within that dealer&#8217;s relevant market area if the relocation site is
to be more distant than the existing site from all other dealers of the same
line-make in that relevant market area; or (iii) the relocation of an existing
new motorcycle dealer within two miles of the existing site of the relocating
dealer.

6. Except as otherwise provided in this subdivision and notwithstanding the
terms of any franchise, to terminate, cancel, or refuse to renew the franchise
of any dealer without good cause and unless (i) the dealer and the Commissioner
have received written notice of the franchisor&#8217;s intentions at least 60
days prior to the effective date of such termination, cancellation, or the
expiration date of the franchise, setting forth the specific grounds for the
action, and (ii) the Commissioner has determined, if requested in writing by the
dealer within the 60-day period, and after a hearing on the matter, that there
is good cause for the termination, cancellation, or nonrenewal of the franchise.
In any case where a petition is made to the Commissioner for a determination as
to good cause for the termination, cancellation, or nonrenewal of a franchise,
the franchise in question shall continue in effect pending the
Commissioner&#8217;s decision or, if that decision is appealed to the circuit
court, pending the decision of the circuit court. In any case in which a
franchisor neither advises a dealer that it does not intend to renew a franchise
nor takes any action to renew a franchise beyond its expiration date, the
franchise in question shall continue in effect on the terms last agreed to by
the parties. Notwithstanding the other provisions of this subdivision, notice of
termination, cancellation, or nonrenewal may be provided to a dealer by a
franchisor not less than 15 days prior to the effective date of such
termination, cancellation, or nonrenewal when the grounds for such action are
any of the following:
			a. Insolvency of the franchised motorcycle dealer or filing of any petition
by or against the franchised motorcycle dealer, under any bankruptcy or
receivership law, leading to liquidation or that is intended to lead to
liquidation of the franchisee&#8217;s business;
			b. Failure of the franchised motorcycle dealer to conduct its customary sales
and service operations during its posted business hours for seven consecutive
business days, except where the failure results from acts of God or
circumstances beyond the direct control of the franchised motorcycle dealer;
			c. Revocation of any license that the franchised motorcycle dealer is
required to have to operate a dealership; or
			d. Conviction of the dealer or any principal of the dealer of a felony.
			The change or discontinuance of a marketing or distribution system of a
particular line-make product by a manufacturer or distributor, while the name
identification of the product is continued in substantial form by the same or
different manufacturer or distributor, may be considered to be a franchise
termination, cancellation, or nonrenewal. The provisions of this paragraph shall
apply to changes and discontinuances made after January 1, 1989, but they shall
not be considered by any court in any case in which such a change or
discontinuance occurring prior to that date has been challenged as constituting
a termination, cancellation, or nonrenewal.

7. To fail to provide continued parts and service support to a dealer that holds
a franchise in a discontinued line-make for at least five years from the date of
such discontinuance. This requirement shall not apply to a line-make that was
discontinued prior to January 1, 1989.

8. To fail to allow a dealer the right at any time to designate a member of his
family as a successor to the dealership in the event of the death or incapacity
of the dealer. It shall be unlawful to prevent or refuse to honor the succession
to a dealership by a member of the family of a deceased or incapacitated dealer
if the franchisor has not provided to the member of the family previously
designated by the dealer as his successor written notice of its objections to
the succession and of such person&#8217;s right to seek a hearing on the matter
before the Commissioner pursuant to this article, and the Commissioner
determines, if requested in writing by such member of the family within 30 days
of receipt of such notice from the franchisor, and after a hearing on the matter
before the Commissioner pursuant to this article, that the failure to permit or
honor the succession is unreasonable under the circumstances. No member of the
family may succeed to a franchise unless (i) the franchisor has been given
written notice as to the identity, financial ability, and qualifications of the
member of the family in question and (ii) the succession to the franchise will
not involve, without the franchisor&#8217;s consent, a relocation of the
business.

9. To fail to ship monthly to any dealer, if ordered by the dealer, the number
of new motorcycles of each make, series, and model needed by the dealer to
receive a percentage of total new motorcycle sales of each make, series, and
model equitably related to the total new motorcycle production or importation
currently being achieved nationally by each make, series, and model covered
under the franchise. Upon the written request of any dealer holding its sales or
sales and service franchise, the manufacturer or distributor shall disclose to
the dealer in writing the basis upon which new motorcycles are allocated,
scheduled, and delivered to the dealers of the same line-make. If allocation is
at issue in a request for a hearing, the dealer may demand the Commissioner to
direct that the manufacturer or distributor provide to the dealer, within 30
days of such demand, all records of sales and all records of distribution of all
motorcycles to the same line-make dealers who compete with the dealer requesting
the hearing.

10. To require or otherwise coerce a dealer to underutilize the dealer&#8217;s
facilities.

11. To include in any franchise with a motorcycle dealer terms that are contrary
to, prohibited by, or otherwise inconsistent with the requirements of this
chapter.

12. To require under any franchise agreement a motorcycle dealer to pay the
attorney fees of the manufacturer or distributor related to hearings and appeals
brought under this article.

13. To fail to include in any franchise with a motorcycle dealer the following
language: &#8220;If any provision herein contravenes the laws or regulations of
any state or other jurisdiction wherein this agreement is to be performed, or
denies access to the procedures, forums, or remedies provided for by such laws
or regulations, such provision shall be deemed to be modified to conform to such
laws or regulations, and all other terms and provisions shall remain in full
force,&#8221; or words to that effect.

14. To include in any franchise agreement with a motorcycle dealer terms that
prohibit a motorcycle dealer from exercising his right to a trial by jury in any
action where such right otherwise exists.

HISTORY: 1996, cc. 1043, 1052, § 46.2-1993.67; 1997, c. 802; 2010, c. 610;
2015, c. 615.