Requires actual consent to participation in franchise programs

BILL NUMBER:S7885A

Title of bill

An act to amend the vehicle and traffic law, in relation to requiring actual consent to participation in franchise programs

Purpose

To ensure that franchised motor vehicle dealers have given their actual consent to franchisor programs that include a dealer expense.

Summary of provisions

Section one of the bill would add a new paragraph (hh) to section 463(2) of the Franchised Motor Vehicle Dealer Act, Article 17-A of the State Vehicle & Traffic Law, New paragraph (hh) would prohibit a motor vehicle franchisor from requiring that a franchised motor vehicle dealer contribute monetarily to any program or promotion unless the franchised dealer has given written consent to participation in the program or promotion within sixty days prior to the start of the program. Program or promotion-renewals would not require further written agreement if the dealer consented to renewal in the original agreement, but a dealer could withdraw from a renewal upon reasonable written notice. Written consent could be handwritten, typed, or by electronic signature.

Section two makes the bill effective on the January first following enactment.

Justification

Motor vehicle manufacturers and distributors run a number of programs and promotions, and those programs and promotions change frequently. Sometimes, programs and promotions include a dealer contribution. Where a dealer contribution is required, manufacturers and distributors should not presume that a franchised dealer will participate. Instead, the dealer's written consent to the specific program or promotion should be required. This bill achieves that by requiring that the dealer's written consent be given within the sixty days prior to the dealer's participation. That consent can include consent to automatic renewals so that a new signature is not needed when a program or promotion is continued. If a dealer wishes to end participation despite the program's or promotion's renewal, the dealer must give written notice within thirty days of renewal. In this way, the bill permits the rollout and easy continuation of programs or promotions, without unduly burdening franchisors or franchised dealers.

Legislative history

This is a new bill.

Fiscal implications

None.

Effective date

This act shall take effect on the first of January next succeeding the date on which it shall have become law.