Section 3060 Of Article 4. Hearings On Franchise Modification, Replacement, Termination, Refusal To Continue, Delivery And Preparation Obligations, And Warranty Reimbursement From California Vehicle Code >> Division 2. >> Chapter 6. >> Article 4.
3060
. (a) Notwithstanding Section 20999.1 of the Business and
Professions Code or the terms of any franchise, no franchisor shall
terminate or refuse to continue any existing franchise unless all of
the following conditions are met:
(1) The franchisee and the board have received written notice from
the franchisor as follows:
(A) Sixty days before the effective date thereof setting forth the
specific grounds for termination or refusal to continue.
(B) Fifteen days before the effective date thereof setting forth
the specific grounds with respect to any of the following:
(i) Transfer of any ownership or interest in the franchise without
the consent of the franchisor, which consent shall not be
unreasonably withheld.
(ii) Misrepresentation by the franchisee in applying for the
franchise.
(iii) Insolvency of the franchisee, or filing of any petition by
or against the franchisee under any bankruptcy or receivership law.
(iv) Any unfair business practice after written warning thereof.
(v) Failure of the motor vehicle dealer to conduct its customary
sales and service operations during its customary hours of business
for seven consecutive business days, giving rise to a good faith
belief on the part of the franchisor that the motor vehicle dealer is
in fact going out of business, except for circumstances beyond the
direct control of the motor vehicle dealer or by order of the
department.
(C) The written notice shall contain, on the first page thereof in
at least 12-point bold type and circumscribed by a line to segregate
it from the rest of the text, one of the following statements,
whichever is applicable:
[To be inserted when a 60-day notice of termination is given.]
"NOTICE TO DEALER: You have the right to file a protest with the
NEW MOTOR VEHICLE BOARD in Sacramento and have a hearing in which you
may protest the termination of your franchise under provisions of
the California Vehicle Code. You must file your protest with the
board within 30 calendar days after receiving this notice or within
30 days after the end of any appeal procedure provided by the
franchisor or your protest right will be waived."
[To be inserted when a 15-day notice of termination is given.]
"NOTICE TO DEALER: You have the right to file a protest with the
NEW MOTOR VEHICLE BOARD in Sacramento and have a hearing in which you
may protest the termination of your franchise under provisions of
the California Vehicle Code. You must file your protest with the
board within 10 calendar days after receiving this notice or within
10 days after the end of any appeal procedure provided by the
franchisor or your protest right will be waived."
(2) Except as provided in Section 3050.7, the board finds that
there is good cause for termination or refusal to continue, following
a hearing called pursuant to Section 3066. The franchisee may file a
protest with the board within 30 days after receiving a 60-day
notice, satisfying the requirements of this section, or within 30
days after the end of any appeal procedure provided by the
franchisor, or within 10 days after receiving a 15-day notice,
satisfying the requirements of this section, or within 10 days after
the end of any appeal procedure provided by the franchisor. When a
protest is filed, the board shall advise the franchisor that a timely
protest has been filed, that a hearing is required pursuant to
Section 3066, and that the franchisor may not terminate or refuse to
continue until the board makes its findings.
(3) The franchisor has received the written consent of the
franchisee, or the appropriate period for filing a protest has
elapsed.
(b) (1) Notwithstanding Section 20999.1 of the Business and
Professions Code or the terms of any franchise, no franchisor shall
modify or replace a franchise with a succeeding franchise if the
modification or replacement would substantially affect the franchisee'
s sales or service obligations or investment, unless the franchisor
has first given the board and each affected franchisee written notice
thereof at least 60 days in advance of the modification or
replacement. Within 30 days of receipt of the notice, satisfying the
requirement of this section, or within 30 days after the end of any
appeal procedure provided by the franchisor, a franchisee may file a
protest with the board and the modification or replacement does not
become effective until there is a finding by the board that there is
good cause for the modification or replacement. If, however, a
replacement franchise is the successor franchise to an expiring or
expired term franchise, the prior franchise shall continue in effect
until resolution of the protest by the board. In the event of
multiple protests, hearings shall be consolidated to expedite the
disposition of the issue.
(2) The written notice shall contain, on the first page thereof in
at least 12-point bold type and circumscribed by a line to segregate
it from the rest of the text, the following statement:
"NOTICE TO DEALER: Your franchise agreement is being modified or
replaced. If the modification or replacement will substantially
affect your sales or service obligations or investment, you have the
right to file a protest with the NEW MOTOR VEHICLE BOARD in
Sacramento and have a hearing in which you may protest the proposed
modification or replacement of your franchise under provisions of the
California Vehicle Code. You must file your protest with the board
within 30 calendar days of your receipt of this notice or within 30
days after the end of any appeal procedure provided by the franchisor
or your protest rights will be waived."