815 ILCS 710/12

Current through Public Act 103-1052

Section 815 ILCS 710/12 - Arbitration; administrative proceedings; civil actions; determining good cause

(a) The franchiser and franchisee may agree to submit a dispute involving Section 4, 5, 6, 7, 9, 10.1, or 11 to arbitration. Any such proceeding shall be conducted under the provisions of the Uniform Arbitration Act by a 3 member panel composed of one member appointed by the franchisee and one member appointed by the franchiser who together shall choose the third member.

An arbitration proceeding hereunder for a remedy under paragraph (6) of subsection (d) or paragraph (6), (8), (10) or (11) of subsection (e) of Section 4 of this Act shall be commenced by written notice to the franchiser by the objecting franchisee within 30 days from the date the dealer received notice to cancel, terminate, modify or not extend or renew an existing franchise or selling agreement or refusal to honor succession to ownership or refusal to honor a sale or transfer or to grant or enter into the additional franchise or selling agreement, or to relocate an existing motor vehicle dealer; or within 60 days of the date the franchisee received notice in writing by the franchiser of its determination under any provision of Section 4 (other than paragraph (6) of subsection (d) or paragraph (6), (8), (10) or (11) of subsection (e) of Section 4), 5, 6, 7, 9, 10.1, or 11 of this Act; however, if notice of the provision under which the determination has been made is not given by the franchiser, then the proceeding shall be commenced as provided by Section 14 of this Act.

The franchiser and the franchisee shall appoint their respective arbitrators and they shall select the third arbitrator within 14 days of receipt of such notice by the franchiser. The arbitrators shall commence hearings within 60 days after all the arbitrators have been appointed and a decision shall be rendered within 30 days after completion of the hearing.

During the pendency of the arbitration, any party may apply to a court of competent jurisdiction which shall have power to modify or stay the effective date of a proposed additional franchise or selling agreement, or the effective date of a proposed motor vehicle dealership relocation or the effective date of a cancellation, termination or modification or refusal to honor succession or refusal to allow a sale or transfer or extend the expiration date of a franchise or selling agreement pending a final determination of the issues raised in the arbitration hearing upon such terms as the court may determine. Any such modification or stay shall not be effective for more than 60 days unless extended by the court for good cause or unless the arbitration hearing is then in progress.

(b) If the franchiser and the franchisee have not agreed to submit a dispute involving Section 4, 5, 6, 7, 9, 10.1, or 11 of this Act to arbitration under subsection (a), then a proceeding before the Motor Vehicle Review Board as prescribed by subsection (c) or (d) of Section 12 and Section 29 of this Act for a remedy other than damages under paragraph (6) of subsection (d) or paragraph (6), (8), (10), or (11) of subsection (e) of Section 4 of this Act shall be commenced upon receipt by the Motor Vehicle Review Board of a timely notice of protest or within 60 days of the date the franchisee received notice in writing by the franchiser of its determination under any provision of those Sections other than paragraph (6) of subsection (d) or paragraph (6), (8), (10), or (11) of subsection (e) of Section 4 of this Act; however, if notice of the provision under which the determination has been made is not given by the franchiser, then the proceeding shall be commenced as provided by Section 14 of this Act.

During the pendency of a proceeding under this Section, a party may apply to a court of competent jurisdiction that shall have power to modify or stay the effective date of a proposed additional franchise or selling agreement, or the effective date of a proposed motor vehicle dealership relocation, or the effective date of a cancellation, termination, or modification, or extend the expiration date of a franchise or selling agreement or refusal to honor succession to ownership or refusal to approve a sale or transfer pending a final determination of the issues raised in the hearing upon such terms as the court may determine. Any modification or stay shall not be effective for more than 60 days unless extended by the court for good cause or unless the hearing is then in progress.

(c) In proceedings under (a) or (b), when determining whether good cause has been established for granting such proposed additional franchise or selling agreement, or for relocating an existing motor vehicle dealership, the arbitrators or Board shall consider all relevant circumstances in accordance with subsection (v) of Section 2 of this Act, including but not limited to:

(1) whether the establishment of such additional franchise or the relocation of such motor vehicle dealership is warranted by economic and marketing conditions including anticipated future changes;

(2) the retail sales and service business transacted by the objecting motor vehicle dealer or dealers and other motor vehicle dealers of the same line make with a place of business in the relevant market area to be served by the additional franchise or the relocated motor vehicle dealership during the 5 year period immediately preceding such notice as compared to the business available to them;

(3) the investment necessarily made and obligations incurred by the objecting motor vehicle dealer or dealers and other motor vehicle dealers of the same line make with a place of business in the relevant market area to be served by the additional franchise or the relocated motor vehicle dealership to perform their obligations under existing franchises or selling agreements; and, the manufacturer shall give reasonable credit for sales of factory repurchase vehicles purchased by the objecting motor vehicle dealer or dealers and other motor vehicle dealers of the same line make with the place of business in the relevant market area to be served by the additional franchise or the relocated motor vehicle dealership, or the additional motor vehicle dealership or other facility limited to the sale of factory repurchase or late model vehicles, at manufacturer authorized or sponsored auctions in determining performance of obligations under existing franchises or selling agreements relating to total new vehicle sales;

(4) the permanency of the investment of the objecting motor vehicle dealer or dealers and other motor vehicle dealers of the same line make with a place of business in the relevant market area to be served by the additional franchise or the relocated motor vehicle dealership;

(5) whether it is beneficial or injurious to the public welfare for an additional franchise or relocated motor vehicle dealership to be established;

(6) whether the objecting motor vehicle dealer or dealers and other motor vehicle dealers of the same line make with a place of business in the relevant market area to be served by the additional franchisee or relocated motor vehicle dealership are providing adequate competition and convenient consumer care for the motor vehicles of the same line make owned or operated in the area to be served by the additional franchise or relocated motor vehicle dealership;

(7) whether the objecting motor vehicle dealer or dealers and other motor vehicle dealers of the same line make with a place of business in the relevant market area to be served by the additional franchisee or the relocated motor vehicle dealership have adequate motor vehicle sales and service facilities, equipment, vehicle parts and qualified personnel to reasonably provide for the needs of the customer; provided, however, that good cause shall not be shown solely by a desire for further market penetration;

(8) whether the establishment of an additional franchise or the relocation of a motor vehicle dealership would be in the public interest;

(9) whether there has been a material breach by a motor vehicle dealer of the existing franchise agreement which creates a substantially detrimental effect upon the distribution of the franchiser's motor vehicles in the affected motor vehicle dealer's relevant market area or fraudulent claims for warranty work, insolvency or inability to pay debts as they mature;

(10) the effect of an additional franchise or relocated motor vehicle dealership upon the existing motor vehicle dealers of the same line make in the relevant market area to be served by the additional franchisee or relocated motor vehicle dealership; and

(11) whether the manufacturer has given reasonable credit to the objecting motor vehicle dealer or dealers and other motor vehicle dealers of the same line make with a place of business in the relevant market area to be served by the additional franchise or relocated motor vehicle dealership or additional motor vehicle dealership or other facility limited to the sale of factory repurchase or late model vehicles, for retail sales of factory repurchase vehicles purchased by the motor vehicle dealer or dealers at manufacturer authorized or sponsored auctions.

(d) In proceedings under subsection (a) or (b), when determining whether good cause has been established for cancelling, terminating, refusing to extend or renew, or changing or modifying the obligations of the motor vehicle dealer as a condition to offering a renewal, replacement, or succeeding franchise or selling agreement, the arbitrators or Board shall consider all relevant circumstances in accordance with subsection (v) of Section 2 of this Act, including but not limited to:

(1) The amount of retail sales transacted by the franchisee during a 5-year period immediately before the date of the notice of proposed action as compared to the business available to the franchisee.

(2) The investment necessarily made and obligations incurred by the franchisee to perform its part of the franchise.

(3) The permanency of the franchisee's investment.

(4) Whether it is injurious to the public interest for the franchise to be cancelled or terminated or not extended or modified, or the business of the franchise disrupted.

(5) Whether the franchisee has adequate motor vehicle sales and service facilities, equipment, vehicle parts, and service personnel to reasonably provide for the need of the customers for the same line make of motor vehicles handled by the franchisee.

(6) Whether the franchisee fails to fulfill the warranty obligations of the manufacturer required to be performed by the franchisee.

(7) The extent and materiality of the franchisee's failure to comply with the terms of the franchise and the reasonableness and fairness of those terms.

(8) Whether the owners of the franchise had actual knowledge of the facts and circumstances upon which cancellation or termination, failure to extend or renew, or changing or modification of the obligations of the franchisee as a condition to offering a renewal, replacement, or succeeding franchise or selling agreement.

(9) The extent to which local market factors in the dealer's market area presented by the dealer impacted the dealer's performance.

(e) If the franchiser and the franchisee have not agreed to submit a dispute to arbitration, and the dispute did not arise under paragraph (6) of subsection (d) or paragraph (6), (8), (10), or (11) of subsection (e) of Section 4 of this Act, then a proceeding for a remedy other than damages may be commenced by the objecting franchisee in the circuit court of the county in which the objecting franchisee has its principal place of business, within 60 days of the date the franchisee received notice in writing by the franchiser of its determination under any provision of this Act other than paragraph (6) of subsection (d) or paragraph (6), (8), (10), or (11) of subsection (e) of Section 4 of this Act; however, if notice of the provision under which the determination has been made is not given by the franchiser, then the proceeding shall be commenced as provided by Section 14 of this Act.

(f) The changes to this Section made by this amendatory Act of the 92nd General Assembly (i) apply only to causes of action accruing on or after its effective date and (ii) are intended to provide only an additional venue for dispute resolution without changing any substantive rights under this Act.

815 ILCS 710/12

Amended by P.A. 100-0308,§ 5, eff. 8/24/2017.

P.A. 89-145, eff. 7/14/1995; 92-272, eff. 1/1/2002.