VA Governor Signs Franchise Enhancement Provisions into Law

VA Governor Signs Franchise Enhancement Provisions into Law

Virginia dealers benefited by enhancements in the state franchise law that were passed by the 2009 General Assembly and approved by Gov. Tim Kaine this week. The measures, which go into effect immediately, were developed and advocated by VADA, and are highlighted below:

1. More clarity in a dealers option to add a franchise in an existing facility.

2. More definitive rules of engagement and limits on franchisor sanctions when a dealer sells a vehicle to a consumer who subsequently exports it.

3. Limits on franchisors unilaterally setting terms and conditions on a vehicle sale.

4. Limits on franchisor denial of warranty payments for repairs prescribed by the dealer.

5. A requirement that franchisors compensate dealers the value of the franchise and as much as three years rent support when a franchise is terminated.

6. A requirement that the franchisor buy back all vehicles purchased by the dealer in the 18 months prior to termination

A teleconference and webinar on the changes in the law will be hosted by VAD on May 1 from 1:30 to 3:30 pm

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In Maryland where the 2009 General Assembly is still in session, SB 668, which contains a variety of franchise relations measures, has passed out of the Senate and is being taken up by the House of Delegates. Action is expected on this legislation imminently and will be reported here.