Bill > A3722

This bill amends the Franchise Practices Act to strengthen protections for motor vehicle franchisees by prohibiting franchisors from requiring franchisees to waive jury trials, agree to specific venues for disputes, or submit to mandatory arbitration, and allows franchisees to revoke such clauses within 60 days of receiving a fully executed agreement. It also clarifies that franchisors cannot impose unreasonable performance standards, unfairly disapprove franchise transfers, fail to compensate franchisees for product recall costs, use arbitrary performance formulas, or establish competing service facilities without proper notice to existing franchisees within a six-mile radius. The bill further prohibits franchisors from requiring unconditional releases without allowing exceptions for outstanding financial obligations, forcing franchisees to order or accept unwanted vehicles or equipment, or discriminating in vehicle sales or pricing among franchisees. Additionally, it restricts franchisors from interfering with how franchisees use their facilities, demanding an interest in the franchisee's real property, or requiring relocation or facility modifications without demonstrating financial viability for the franchisee, and limits increases in working capital requirements to 5% annually unless the franchisee's operations are demonstrably unsustainable. The bill also modifies provisions regarding the repurchase of inventory and parts upon franchise termination, the compensation for franchise termination due to business changes, and the notice period for granting new franchises, expanding the relevant market area for new franchise considerations and requiring franchisors to prove that new franchises will not be injurious to existing ones. Finally, it establishes automatic stays on franchise terminations if an action is filed to enjoin them, places the burden of proof on the franchisor to demonstrate that termination is not a violation, and clarifies procedures for franchise transfers and requests for additional information from potential transferees.