NY Veh & Traf L § 463 (2021)
2021 New York Laws VAT - Vehicle and Traffic Title 4 - Registration of Vehicles Article 17-A - Franchised Motor Vehicle Dealer Act 463 - Unfair Business Practices by Franchisors.

§  463.  Unfair  business  practices  by  franchisors.  1. It shall be unlawful for any franchisor to directly or indirectly coerce or  attempt to coerce any franchised motor vehicle dealer:  (a)  To  order  or  accept  delivery of any motor vehicle or vehicles, appliances, tools, machinery, equipment, parts or  accessories  therefor or  any  other  commodity  or  commodities  which  shall  not  have been voluntarily ordered by said franchised motor vehicle dealer  except  any such items required by a recall campaign.  (b)  To  order  or  accept  delivery of any motor vehicle with special features, appliances, accessories or equipment not included in the  list price of said motor vehicle as publicly advertised by the franchisor.  (c)  To  contribute  or  pay  money  or  anything  of  value  into any cooperative or other advertising program or fund unless such program  or fund shall be controlled by a dealer or group of dealers.  (d)  To  participate  in  any  training program unless such program is expressly limited to specific information necessary to sell  or  service the models of vehicles the dealer is authorized to sell or service under the  dealer's  franchise  with  that  franchisor. A franchisor shall not unreasonably require an owner or dealer principal  of  a  dealership  to attend  any  meeting  or  training  program.  A  franchisor who requires participation in a training program  as  authorized  by  this  paragraph shall  to  the largest extent practicable make all reasonable efforts to limit or reimburse the expenses of a dealer incurred in  attending  such program.  Nothing  in  this  paragraph  shall  be deemed to prohibit any training program located  within  a  dealer's  own  principal  place  of business.  (e)  To  sell,  or  sell  exclusively  an  extended  service contract, extended maintenance plan or similar product, including, but not limited to, gap products offered, endorsed or sponsored by the franchisor by the following means:  (1) by a statement made by the franchisor that failure to do  so  will substantially and adversely impact the dealer; or  (2)  by  a provision in a franchise agreement that the dealer sell, or sell exclusively an extended service contract, extended maintenance plan or similar product offered, endorsed or sponsored by the franchisor; or  (3) by measuring the dealer's performance under the franchise based on the sale of extended service contracts, extended  maintenance  plans  or similar  products  offered, endorsed or sponsored by the manufacturer or distributor; or  (4) by requiring  the  dealer  to  exclusively  promote  the  sale  of extended  service  contracts,  extended  maintenance  plans  or  similar products offered, endorsed or sponsored by the franchisor.   Nothing in this section shall prohibit a franchisor from:  (A) providing incentives to a dealer that makes the voluntary decision to sell or sell  exclusively  an  extended  service  contract,  extended maintenance  plan or similar product, including, but not limited to, gap products offered, endorsed or sponsored by the franchisor, or  (B) requiring that a dealer that sells an extended  service  contract, extended  maintenance  plan,  or  similar  product  that is not offered, endorsed or sponsored by the franchisor, disclose to  the  consumer  the disclosures  required  under section seven thousand nine hundred five of the insurance  law,  and  a  separate  statement,  acknowledged  by  the consumer,  that the extended service contract, extended maintenance plan or similar  product  is  not  offered,  endorsed  or  sponsored  by  the franchisor, if that is the case.   2.  It shall be unlawful for any franchisor, notwithstanding the terms of any franchise contract:  (a)  To  refuse  to  deliver  in  reasonable  quantity  and  within  a reasonable  time  after  receipt  of  a dealer's order to any franchised motor vehicle dealer any vehicle covered  by  such  franchise  which  is publicly  advertised  by  such  franchisor to be available for immediate delivery.    Provided, however, the failure to deliver any motor vehicle shall not be considered a violation of this article if such  failure  be due  to  acts  of  God, work stoppages or delays due to strikes or labor difficulties, freight  embargoes,  shortage  of  materials,  a  lack  of manufacturing  capacity  or other causes over which the franchisor shall have no control.  (b) To  directly  or  indirectly  coerce  or  attempt  to  coerce  any franchised  motor  vehicle  dealer to enter into any agreement with such franchisor or officer, agent or other representative thereof, or  to  do any  other  act prejudicial to the monetary interests or property rights of said dealer  by  threatening  to  terminate  said  dealer.  Provided, however,  that  good faith notice to any franchised motor vehicle dealer of said dealer's violation of any terms or provisions of such  franchise shall not constitute a violation of this article.  (c)  (1)  To  condition  the  renewal or extension of a franchise on a franchised motor vehicle dealer's substantial renovation of the dealer's place of business or  on  the  construction,  purchase,  acquisition  or rental of a new place of business by the franchised motor vehicle dealer unless the franchisor has advised the franchised motor vehicle dealer in writing  of  its  intent  to impose such a condition within a reasonable time prior to the effective date of the  proposed  date  of  renewal  or extension  (but  in  no  case  less  than  one  hundred eighty days) and provided the franchisor demonstrates the need for  such  change  in  the place  of  business and the reasonableness of such demand in view of the need to service the public and the economic conditions existing  in  the automobile  industry  at  the  time such action would be required of the franchised motor vehicle dealer. As  part  of  any  such  condition  the franchisor  shall  agree,  in  writing,  to  supply  the  dealer  with a reasonable quantity and mix of additional new motor vehicles  which,  as determined  by a reasonable analysis of market conditions, are projected to meet the sales levels necessary to  support  the  increased  overhead incurred  by  the  franchised  motor  vehicle  dealer  by reason of such renovation, construction, purchase, acquisition or rental of a new place of business.  (2) To require a franchised motor vehicle dealer  to  purchase  goods, building  materials,  or  services  for  the dealer's place of business, including, but  not  limited  to,  office  furniture,  design  features, flooring,  and wall coverings, from a vendor chosen by the franchisor if goods, building materials, or services of substantially similar  quality and design are available from other sources, provided, however, that the goods  or  building  materials  are  not  subject  to  the  franchisor's intellectual property or  trademark  rights  and  the  franchised  motor vehicle  dealer  has  received the franchisor's approval, which approval may not be unreasonably withheld. Nothing in this subdivision  shall  be construed  to  allow  a  franchised  motor  vehicle  dealer to impair or eliminate a franchisor's intellectual property or trademark  rights  and trade  dress  usage guidelines, or to impair other intellectual property interests owned or controlled by the franchisor.  (3) Except as necessary to comply with a health or safety law,  or  to comply  with  a  technology  requirement,  which is necessary to sell or service a motor vehicle that the  franchised  motor  vehicle  dealer  is authorized  or licensed by the franchisor to sell or service, to require a franchised motor vehicle dealer to construct a new dealer facility  or substantially  alter  or  remodel an existing dealer facility before the  date that is ten years after the date the construction of the new dealer facility or such alteration or remodeling at that location was completed and shall continue with any successor owner provided such owner has been designated  and  approved  by the franchisor in the franchise agreement, and such construction, alteration or remodeling  substantially  complied with the franchisor's brand image standards or plans that the franchisor provided  at  the  time  the construction, alteration, or remodeling was completed.  (i) As used in this subparagraph, "substantially alter":  (A)  refers  to  an  alteration  that  has  a  major  impact  on   the architectural  features, characteristics, or integrity of a structure or lot; and  (B) does not include routine maintenance, such as  interior  painting, reasonably  necessary  to  keep  a  dealership  facility  in  attractive condition.  (ii) Nothing in this paragraph shall prohibit a franchisor from:  (A) continuing a facility improvement program that is in effect as  of the effective date of this paragraph with more than one franchised motor vehicle dealer in the state or to renewing or modifying such program; or  (B)  providing  lump  sum  or regularly-scheduled payments to assist a franchised motor  vehicle  dealer  in  making  a  facility  improvement, including  construction, alteration or remodeling, or installing signage or a franchisor image element;  (C) providing reimbursement to a franchised motor  vehicle  dealer  on reasonable,  written terms for a portion of the franchised motor vehicle dealer's cost of making a facility improvement, including  construction, alteration  or  remodeling, the purchase of goods, building materials or services, or installing signage or a franchisor image element.  (4) To deny a franchised  motor  vehicle  dealer  a  franchisor  image element  payment, incentive or allowance if the franchised motor vehicle dealer, with the franchisor's approval, began construction,  alterations or  remodeling  intended  to  comply with the franchisor's image element program before the franchisor substantially changed  or  terminated  the program prior to the program's scheduled ending date provided the dealer is  otherwise eligible for program payments and provided that after such substantial change or  termination,  the  compensation  payable  to  the dealer  shall  be  limited  to  image  element  payments,  incentives or allowances that the dealer would have earned through program's scheduled ending  date,  provided  that  the  dealer  complies  with  all  program requirements,  and  provided, further, that such program or payments are not otherwise prohibited by law or regulation.  (5) To require or attempt to require a franchised motor vehicle dealer to  establish  or  maintain  exclusive  dealership   facilities   unless justified  by current and reasonably expected future economic conditions existing in the dealer's relevant market area at the  time  the  request for  exclusive facilities is made; provided that the foregoing shall not restrict the terms and conditions of any agreement for which the  dealer has  voluntarily  accepted  valuable  consideration  separate  from  the franchised motor vehicle  dealer's  right  to  sell  and  service  motor vehicles  for  the  franchisor. The fact that local market share, facing competitive brand dealerships have exclusive dealership facilities shall constitute evidence that current economic  conditions  may  justify  the requirement to establish and maintain exclusive dealership facilities.  (6)  To  require a site control provision regarding the dealer's place of business to  survive  or  continue  after  the  termination  of  such dealer's  franchise  if the termination is due to the discontinuation of the line-make that was the subject of the agreement.  (d) (1) To terminate, cancel or refuse to renew the franchise  of  any franchised  motor vehicle dealer except for due cause, regardless of the terms of the franchise. A franchisor shall  notify  a  franchised  motor vehicle  dealer,  in  writing,  of its intention to terminate, cancel or refuse to renew the franchise of such dealer at least ninety days before the  effective  date  thereof,  stating  the  specific  grounds for such termination, cancellation or refusal to renew. In  no  event  shall  the term  of  any  such  franchise expire without the written consent of the franchised motor vehicle dealer involved prior to the expiration  of  at least  ninety  days  following such written notice except as hereinafter provided.  (2) A change in  ownership  of  a  manufacturer  or  distributor  that contemplates  a  continuation  of  that line make in the state shall not directly  or  indirectly,  through  actions  of  any   parent   of   the manufacturer   or   distributor,   subsidiary  of  the  manufacturer  or distributor, or common entity  cause  a  termination,  cancellation,  or nonrenewal  of  a dealer agreement by a present or previous manufacturer or distributor of an  existing  agreement  unless  the  manufacturer  or distributor  offers  the  new  vehicle dealer an agreement substantially similar to that offered to other dealers of the same line make.  (3) The provisions of subparagraphs one  and  two  of  this  paragraph notwithstanding,  a  franchisor  may  terminate  its  franchise  with  a franchised motor vehicle dealer  upon  at  least  fifteen  days  written notice  upon the occurrence of any of the following: (i) conviction of a franchised motor vehicle dealer, or one of its principal  owners,  of  a felony  or  a  crime  punishable  by  imprisonment  which  substantially adversely affects the business of the franchisor, or (ii) the failure of the franchised motor vehicle dealer to conduct its customary  sales  and service  operations  for  a  continuous  period  of seven business days, except for acts of God or circumstances beyond the direct control of the franchised motor vehicle dealer or when  any  license  required  by  the franchised motor vehicle dealer is suspended for a period of thirty days or  less, or (iii) insolvency of the franchised motor vehicle dealer, or filing of any petition by or against the franchised motor vehicle dealer under any bankruptcy or receivership law.  (e) (1) Any franchised motor vehicle dealer  who  receives  a  written notice  of termination or a written notice of a franchisor's demand that the dealer substantially renovate an existing place of business, or buy, construct or rent a new place of business as a  condition  of  franchise renewal or extension may have a review of the demand to change the place of  business  or the threatened termination by instituting an action, as provided in section four hundred sixty-nine of  this  article.  If  such action is commenced within four months of receipt of notice, such action shall   serve  to  stay,  without  bond,  the  proposed  termination  or renovation or demand to change the place of  business  until  the  final judgment  has  been rendered in an adjudicatory proceeding or action, as provided in section four hundred sixty-nine of this article.  (2) The issues to be determined in an  action  commenced  pursuant  to subparagraph  one  of this paragraph are whether the franchisor's notice of termination was issued with due cause and in good faith.  The  burden of  proof  shall be upon the franchisor to prove that due cause and good faith exist. The franchisor shall also have the burden of  proving  that all  portions  of its current or proposed sales and service requirements for the protesting franchised new motor vehicle dealer are reasonable.   The determination of due cause shall be that there exists  a  material breach  by  a  new  motor  vehicle  dealer of a reasonable and necessary provision of a franchise if the breach is not cured within a  reasonable  time  after  written  notice  of  the  breach has been received from the manufacturer or distributor.  (3) The franchisor shall provide notification in writing to the dealer that  the dealer has one hundred eighty days to correct dealer sales and service performance deficiencies or breaches and that the  franchise  is subject to termination under this section if the dealer does not correct those  deficiencies  or  breaches.  If  the  termination  is  based upon performance of the dealer in sales and service then there  shall  be  no due  cause  if  the  dealer  substantially  complies with the reasonable performance provisions of the franchise during such cure period and,  no due  cause if the failure to demonstrate such substantial compliance was due to factors which were beyond the control of such dealer.  (f) To  intentionally  resort  to  or  use  any  false  or  misleading advertisements.  (g)  To  sell or offer to sell any new motor vehicle to any franchised motor vehicle dealer at a lower actual price therefor  than  the  actual price  offered to any other franchised motor vehicle dealer for the same model vehicle similarly equipped or to utilize any device including, but not limited to, sales promotion plans or programs which result  in  such lesser actual price. Provided, however, the provisions of this paragraph shall  not  apply to sales to a franchised motor vehicle dealer for: (i) resale to any unit of government; or (ii) donation or use by said dealer in a driver education program. This paragraph shall not be construed  to prevent  the  offering of incentive programs or other discounts provided such incentives or discounts are reasonably available to all  franchised motor vehicle dealers in this state on a proportionately equal basis.  (h)  To  sell  or  offer  to sell any new motor vehicle to any person, except a distributor, at a lower actual price therefor than  the  actual price  offered  and charged to a franchised motor vehicle dealer for the same model vehicle similarly equipped or to  utilize  any  device  which results in such lesser actual price.  (i)  To  sell  or  offer  to  sell  parts  and/or  accessories  to any franchised motor vehicle dealer at a lower actual  price  therefor  than the  actual  price  offered to any other franchised motor vehicle dealer for similar parts and/or  accessories  for  use  in  his  own  business. Provided,  however,  that nothing herein contained shall be construed to prevent a manufacturer  or  distributor,  or  any  agent  thereof,  from selling to a franchised motor vehicle dealer, who operates and serves as a wholesaler of parts and accessories, such parts and accessories as may be  ordered by such franchised motor vehicle dealer for resale to retail outlets at a  lower  actual  price  than  the  actual  price  offered  a franchised  motor  vehicle  dealer  who  does  not operate or serve as a wholesaler of  parts  and  accessories.  This  paragraph  shall  not  be construed  to  prevent  the  offering  of  incentive  programs  or other discounts provided the franchisor demonstrates that such  incentives  or discounts  are  reasonably  available  to  all  franchised motor vehicle dealers in the state on a proportionately equal basis.  (j) To prevent or attempt to prevent, by contract  or  otherwise,  any franchised  motor  vehicle dealer from changing the capital structure of its dealership, or the  means  by  or  through  which  it  finances  the operation of its dealership, or finances the acquisition or retention of inventory,  provided the dealer at all times meets any capital standards agreed to between the dealer and the franchisor and as  applied  by  the franchisor  to  all other comparable franchised motor vehicle dealers of the franchisor located within the state.  (k) To unreasonably withhold consent to the sale  or  transfer  of  an interest,  in  whole  or  in  part,  to any other person or party by any franchised motor vehicle dealer or any partner  or  stockholder  of  any  franchised  motor  vehicle  dealer.  If such consent to sale or transfer shall be withheld  by  the  franchisor,  the  franchisor  shall  provide specific  reasons  for  its  withholding of consent within sixty days of receipt  of  the  request  for  such  consent  provided  such request is accompanied by proper documentation as may reasonably be required by the franchisor. Upon receipt of notice  and  reasons  for  the  franchisor's withholding  of  consent, the franchised motor vehicle dealer may within one hundred twenty days have a review of the manufacturer's decision  as provided in section four hundred sixty-nine of this article.  (l)  To  require  a  franchised  motor  vehicle  dealer to assent to a release, assignment, novation, waiver or estoppel  which  would  relieve any person from liability imposed under this article, provided that this paragraph  shall  not be construed to prevent a franchised motor vehicle dealer from entering into a valid release or settlement agreement with a franchisor.  (m) (1) To deny to the surviving spouse  or  heirs  of  an  individual franchised  motor  vehicle  dealer  or of a partner of an unincorporated franchised motor vehicle dealer or  of  a  stockholder  of  a  corporate franchised  motor vehicle dealer the right to succeed to the interest of the decedent in such franchised motor vehicle dealership  enterprise  or directly  or  indirectly  to  interfere  with,  hinder  or  prevent  the continuance of the business of the franchised motor  vehicle  dealer  by reason  of  such  succession  to the interest of the decedent. Provided, however, that the continuation of the business of the  franchised  motor vehicle  dealer shall be conducted under competent management acceptable to the franchisor, whose acceptance shall not be unreasonably withheld.  (2) Notwithstanding the foregoing, in the event the  franchised  motor vehicle dealer and franchisor have duly executed an agreement concerning succession  rights  prior  to  the  individual  dealer's,  partner's  or stockholder's death and if such agreement has not been  revoked  by  the franchised  motor vehicle dealer, such agreement shall be observed, even if it designates an individual other than the surviving spouse or  heirs of the decedent.  (n)  To  fail  to  indemnify  and  hold  harmless its franchised motor vehicle dealers against any losses or damages including, but not limited to, court costs and attorneys' fees arising out of  actions,  claims  or proceedings  including,  but  not  limited  to,  those based upon strict liability,  negligence,  misrepresentation,   warranty   (expressed   or implied)  or  revocation  as  described  in section 2-608 of the uniform commercial code, where the action, claim or proceeding directly  relates to  the  manufacture, assembly or design of new motor vehicles, parts or accessories or other functions  of  the  franchisor  including,  without limitation,  the  selection by the franchisor of parts or components for the vehicle or any damages  to  merchandise  or  vehicles  occurring  in transit   where   the   carrier   is   designated   by  the  franchisor, notwithstanding the terms of any franchise.  If  the  action,  claim  or proceeding includes independent allegations against the franchised motor vehicle  dealer,  the  franchisor  shall  bear  only that portion of the costs, fees and judgment which is directly related to  the  manufacture, assembly  or  design  of  the  vehicle,  parts  or accessories, or other function of the franchisor beyond the control of  the  franchised  motor vehicle dealer.  (o)  (1)  Upon  a  termination  of  a  franchise  by  a  franchisor or franchised motor vehicle dealer under this article, to refuse to  accept a  return  of new and unused current model motor vehicle inventory which has been acquired from the franchisor, new and unused  noncurrent  model motor  vehicle  inventory  which  has  been acquired from the franchisor within one hundred eighty days of the effective date of the termination;  supplies, parts, equipment,  signage,  special  tools,  and  furnishings purchased from the franchisor or its approved sources. The obligation of the  franchisor,  except with respect to signage shall be limited to the repurchase  of  the  above property which is unaltered and undamaged, in good and useable condition, and, in the  case  of  supplies,  parts  and equipment  to those items which are currently listed in the franchisor's supplies and parts list. In the case of signage, the franchisor shall be obligated to  repurchase  any  franchisor  required  signage,  purchased within  the  five  years  preceding termination and which is in good and useable condition less depreciation as set forth in the Internal Revenue Code of one-fifteenth of the initial cost per  year  starting  the  year following  the  dealer's  acquisition  of  the  item.  Furthermore,  the obligation of the franchisor to repurchase supplies upon a  termination, cancellation or nonrenewal by a franchised motor vehicle dealer shall be limited  to  supplies  mandated  by  the  franchisor. Parts eligible for repurchase shall include parts which have been renumbered in the current parts list but which  are  identical  in  design  and  material  to  the currently numbered part. The return rights afforded the franchised motor vehicle  dealer  under  the  provisions  of  the  paragraph  shall be in addition to those, if any, provided in the franchise agreement.  (2) The franchisor shall pay fair and reasonable compensation for  the above  described  property  upon  repurchase.  In  the case of new motor vehicle  inventory,  accessories  and   parts,   fair   and   reasonable compensation shall in no instance be less than the net acquisition price paid  by  the  franchised  motor vehicle dealer to the franchisor or its approved sources. Upon a termination of a  franchise  by  a  franchisor, within thirty days of such termination, the franchisor shall send to the franchised motor vehicle dealer instructions on the methodology by which the  franchised  motor  vehicle  dealer  must  ship  the above described property to the franchisor; the franchisor shall then remit payment  for such  property  to the franchised motor vehicle dealer within sixty days after receipt of such property.  (3) Upon a termination of a franchise by a  franchised  motor  vehicle dealer  where  the  franchise consists primarily of the distribution and sale of house coaches, the franchisor's repurchase obligations set forth in this paragraph shall not apply.  (4) In addition to any other requirements of this subdivision, in  the event  a  franchisor terminates a franchise due to termination of a line make, the franchisor shall compensate  the  dealer  for  any  franchisor required   facility   construction,   alterations   or   remodeling,  or construction, alterations or remodeling required  for  participation  in any  incentive  programs which were completed by the dealer within three years of the date the franchisor announced the termination of  the  line make.  For  the  purposes of this section, completion shall be deemed to occur  at  the  later  of  the  franchisor's  final  approval   of   the construction,   alterations,   or   remodeling  or  the  issuance  of  a certificate of occupancy. The compensation required under  this  section shall  be  in  an  amount  equal  to  the dealer's cost for the facility upgrades less any assistance provided to the dealer within  three  years of the date the franchisor announced the termination of the line make by the manufacturer or distributor, and less the amount for depreciation as set  forth  in  Internal  Revenue  Code of one thirty-ninth of the total initial cost of such construction, alterations, or remodeling  per  year starting  the  year  following  the  dealer's completion of the facility construction, alterations, or remodeling.  (5) In addition to the  requirements  of  subparagraph  four  of  this paragraph,  in  the  event  a franchisor terminates a franchise due to a termination of a line make, the franchisor shall compensate  the  dealer  in  an  amount  equal to the amount remaining on the terminated dealer's management computer system lease or  contract,  or  one  year  of  lease payments,  whichever  is  less  if the dealer management computer system will  no  longer  be  utilized  as  a  result of the termination and the franchisor  required  the  dealer  to  utilize  the  particular   dealer management computer system.  (p)  To  refuse  to  repurchase  for  cost,  including  transportation charges, a new vehicle which  has  been  substantially  damaged  by  the franchisor  or  its  agent; or to sell or transfer to a franchised motor vehicle dealer a new motor vehicle which has been subjected  to  repairs with  a  retail  value  in  excess  of five percent of the lesser of the manufacturer's  or  distributor's  suggested  retail  price  where  such repairs  are  performed  after  shipment  from  the franchisor including damage to  the  vehicle  while  in  transit  without  so  notifying  the franchised  motor  vehicle  dealer  to  whom  such  new motor vehicle so repaired is sold or transferred. Such notice shall be in writing, advise of such repairs, and be provided prior to the receipt of any payment for such motor vehicle. If the franchisor shall fail to provide such notice, any franchised motor vehicle dealer suffering a loss by reason  of  such failure  shall  be  entitled  to  reimbursement  from the franchisor who failed to provide such notice.  (q) To provide directly or to grant to any person the right to perform warranty or recall service on any new motor vehicle line  other  than  a house coach line but deny to said person the right to purchase the motor vehicles of that line for resale to consumers in this state as new motor vehicles  provided,  however,  that  this paragraph shall not prohibit a franchisor from:  (1) authorizing warranty service by employees of a fleet  operator  or governmental entity on owned vehicles; or  (2)  authorizing such other persons to perform warranty service as the franchisor deems necessary to protect  its  interests  as  they  may  be affected  by  section one hundred ninety-eight-a of the general business law.   A "fleet operator" shall be required to own for its own use or for the use of others the minimum number of vehicles of the current or preceding model year manufactured or sold by the same franchisor as determined  by the  standards  of  such  franchisor applied on a general and consistent basis  to  substantially  all  fleet  operators.   Notwithstanding   the preceding,  a  franchisor  which withdraws from the United States market shall continue to allow its former franchised motor vehicle  dealers  to continue  servicing  and  supplying  parts,  including service and parts supplied under the franchisor's warranty to vehicle owners, for a period of at least five years after such  withdrawal  from  the  United  States market.  (r)  To  establish or attempt to establish the actual resale price for any new motor vehicle, part or accessory charged by a  franchised  motor vehicle dealer in the state, provided, however, nothing contained herein shall  prohibit  publication  of recommended resale prices or historical information by a franchisor.  (s) To grant a commission to any person other than a franchised  motor vehicle  dealer  within  the  state  involved in the sale of a new motor vehicle by such franchised motor vehicle dealer without said  franchised motor vehicle dealer's written consent. This prohibition shall not apply to  sales  incentive  programs for employees of franchised motor vehicle dealers as long as the payments are  made  by  the  franchisor  to  such employees and not charged to the dealer.  (t)  To  require  or  attempt to require by the terms of the franchise that  any  dispute  arising  out  of   or   in   connection   with   the  interpretation,  performance  or  nonperformance  of  the parties to the franchise or in any way related to the franchise be  determined  through the application of any other state's laws.  (u) To use any subsidiary corporation, affiliated corporation, captive finance   source  or  any  other  controlled  corporation,  partnership, association or person to accomplish what  would  otherwise  be  unlawful conduct under this article on the part of the franchisor.  (v)  To  use  a  CSI  (customer  satisfaction  index)  or other system measuring a customer's degree of satisfaction with  a  franchised  motor vehicle  dealer  as a sale or service provider unless any such system is designed and implemented in such a way that it is fair and equitable  to both  the  franchisor  and  the  franchised motor vehicle dealer. In any dispute between a franchisor and a franchised motor vehicle  dealer  the party  claiming  the  benefit of the system as justification for acts in relation to the franchise shall have the  burden  of  demonstrating  the fairness  and  equity of the system both in design and implementation in relation to the pending dispute. Upon request of  any  franchised  motor vehicle  dealer, a franchisor shall disclose in writing to such dealer a description of how that system is designed and all relevant  information pertaining to such dealer used in the application of that system to such dealer.  (w)  To  withhold  from  a franchised motor vehicle dealer a new motor vehicle product of the same line make which the franchised motor vehicle dealer is authorized to sell under  its  franchise.  Provided  that  the failure  to  deliver  any  motor vehicle shall not be considered to be a violation of this article if such failure is due to an act of God,  work stoppages  or  delays  due  to  strikes  or  labor difficulties, freight embargoes, shortages of materials, a lack of manufacturing capacity,  or other  causes  over  which  the  franchisor  shall  have  no  control. A franchised motor vehicle dealer shall be entitled to  sell  and  service all  the  manufacturer's  new  motor vehicles which the franchised motor vehicle  dealer  is  authorized  to  sell  pursuant  to  the  franchise, provided, however, a franchisor may impose reasonable facility, capital, training,  tools  and parts inventory requirements as a condition to the franchised motor vehicle dealer being permitted to sell such  new  motor vehicle   products.  Conditions  imposed  by  the  franchisor  shall  be reasonably applied to all  of  its  franchised  motor  vehicle  dealers. Franchised  motor  vehicle  dealers  who  are  presently  parties  to  a franchise with the franchisor shall be offered the  right  to  sell  and service  any  new  motor  vehicle product of the same line make owned or generally distributed by  such  franchisor's  franchised  motor  vehicle dealer  within such franchised motor vehicle dealer's designated area of responsibility designated in the franchise agreement before  any  person not  a  party  to such a franchise for the sale of motor vehicles within such area of responsibility is offered or granted a  franchise  to  sell such  new  motor  vehicle  product  from  a location within such area of responsibility.  (x) To require a franchised motor vehicle dealer to agree to a term or condition in a franchise, or as a  condition  to  the  offer,  grant  or renewal of the franchise, lease or agreement, which:  (1)  unless  preempted  by  federal law, requires the franchised motor vehicle  dealer  to  waive  trial  by  jury  in  actions  involving  the franchisor; or  (2)  unless  preempted  by  federal  law,  specifies the jurisdiction, venues or tribunals in  which  disputes  arising  with  respect  to  the franchise,  lease  or  agreement  shall  or  shall  not be submitted for resolution or otherwise prohibits a franchised motor vehicle dealer from bringing an action in a particular forum otherwise available.  (y) Subject to the provisions of paragraph (w) of this subdivision, to sell or offer to sell or lease or offer to lease a motor  vehicle  other than  to  a  franchised  motor  vehicle  dealer in this state; provided, however, that this paragraph shall not apply to sales or leases  of  new motor  vehicles  made by a franchisor to its employees, immediate family members of employees, retirees or immediate family members  of  retirees which  are  hereby  authorized notwithstanding the provisions of section four hundred fifteen of this title.  Nothing  in  this  paragraph  shall prohibit  a  franchisor  from  utilizing  direct  marketing  designed to generate leads via mail, phone, or any other medium, provided that leads developed thereby are referred to the franchised motor  vehicle  dealers in  this  state  and in proximity to the consumer pursuant to a fair and equitable system of allocating such leads or  to  the  franchised  motor vehicle  dealer  as  specified  by  the consumer. The provisions of this paragraph shall not apply to  franchisors  of  house  coaches  when  the franchisor  does  not  have  any  franchised house coach dealers in this state.  (z) To refuse to allocate, sell, or deliver motor vehicles, to  charge back  or  withhold  payments  or  other  things  of  value for which the franchisee is otherwise eligible, or to take or  threaten  to  take  any adverse  action against a franchised motor vehicle dealer, in connection with or as a result of any new motor  vehicle  sold  by  the  franchised motor  vehicle  dealer  and subsequently exported, providing such dealer can demonstrate that he exercised due diligence and that  the  sale  was made in good faith including that the dealer did not know nor reasonably should  have  known  of  the  purchaser's  intention to export the motor vehicle. A franchised motor vehicle dealer  which  causes  a  new  motor vehicle  to be registered in this state or in a foreign state and causes to be collected the appropriate sales and use tax,  or  that  reasonably relied  on  a  franchisor  to  complete a sale shall be presumed to have exercised good faith and due  diligence.  Prior  to  taking  an  adverse action,  including a charge back, as a result of an export, a franchisor shall provide written notice to the franchised motor vehicle  dealer  of the  adverse  action,  and, if a charge back, the specific amount of the charge back, and the vehicle or vehicles at issue. A dealer shall not be liable for the delivery of any vehicle sold through a franchisor's fleet program for any such delivery  in  which  the  sale  or  lease  was  not initiated  or  negotiated  by the dealer and its function was to provide delivery on behalf of the franchisor.  (aa) To: (1) sell directly to a franchised motor vehicle dealer or, to or through a franchised motor vehicle dealer  in  which  the  franchisor owns  any  interest  or controls the management, directly or indirectly, motor vehicles, parts, warranties, or services at a price that is  lower than  the  price  which  the  franchisor charges to all other franchised motor vehicle dealers; or  (2) sell directly to a  consumer  at  retail  new  original  equipment manufacturer's parts (OEM) at a price that is lower than the price which the franchisor makes available to franchised motor vehicle dealers; or  (3)  otherwise  provide a franchised motor vehicle dealer in which the franchisor owns any interest or controls  the  management,  directly  or indirectly,  goods  or  services at a price that is lower than the price charged to all other franchised motor vehicle dealers.  (bb) On and after the effective date of this paragraph, to acquire any interest in any additional motor vehicle dealer in this state, with  the exception  of  stock in a publicly held dealer when ownership is passive and for investment purposes only; provided,  however,  that  nothing  in this  paragraph  shall prohibit a franchisor and its affiliates that own an interest in a franchised motor vehicle dealership that operates or is  approved to operate, within one hundred twenty days after the  effective date of this paragraph, from selling or servicing a new line make of the franchisor  or  its affiliates that was not distributed in this state as of the effective date of this paragraph. Provided, further, that nothing in  this  paragraph  shall  prohibit  a  franchisor  from  acquiring any interest in any franchised motor vehicle dealership:  (1) when operating such franchise  for  a  temporary  period,  not  to exceed  one  year,  during  the  transition  from one owner of the motor vehicle dealership to another, provided, however,  that  such  temporary period  may  be extended once for an additional period not to exceed one year for good cause. Provided that for franchisors of house coaches, the period of temporary ownership of a franchised house coach dealership may be extended in one year increments for good cause shown, except that the aggregate of such extensions shall not exceed five years; or  (2) when operating such franchise temporarily under  a  plan  with  an independent individual who is obligated to make a significant investment in  the dealership that is subject to loss and has an ownership interest or expects to acquire  full  ownership  in  a  reasonable  period  under reasonable terms and conditions, provided that a reasonable period shall be  presumed  to  not  exceed  eight  years; provided, however, that the exception  provided  in  this  subparagraph  shall  not  apply  to   any franchisor,  manufacturer,  distributor,  distributor  branch or factory branch that holds a certificate or registration pursuant to subparagraph (iii) of paragraph f  of  subdivision  seven  of  section  four  hundred fifteen of this title.  (cc)(1) To enter into a franchise establishing an additional new motor vehicle  dealer  or relocating an existing new motor vehicle dealer into the relevant market area of an existing franchise motor  vehicle  dealer of  the same line make unless the franchisor provides notice pursuant to the terms of this subdivision. All dealers that have a  relevant  market area  that  encompasses  the  proposed site shall be entitled to written notice, via certified mail return receipt requested, informing  them  of the  proposed  addition  or relocation. Any new motor vehicle dealer may institute an action as provided in section four  hundred  sixty-nine  of this article to protest the establishment or relocation of the new motor vehicle dealer following receipt of such notice, or following the end of any  appeal  procedure provided by the franchisor. In any action brought by the dealer, the franchisor shall have  the  burden  of  proving  that there exists good cause for any such addition or relocation. Institution of  an  action pursuant to this subdivision shall serve to stay, without bond, the proposed addition or relocation until  a  final  judgment  has been  rendered  in  a  proceeding  or action as provided in section four hundred sixty-nine of this article.  (2) This subdivision shall not apply to:  (i) the relocation or replacement,  other  than  a  replacement  of  a dealer  who has moved within such area, of an existing new motor vehicle dealer within that dealer's own existing relevant market area,  provided that  the relocation not be to a site within the relevant market area of a licensed new motor vehicle dealer for the  same  line  make  of  motor vehicle,  unless  such  existing franchise was previously located within such new motor vehicle dealer's relevant market area; or  (ii) the addition of a new motor vehicle dealer or  the  establishment of a replacement new motor vehicle dealer, other than a replacement of a dealer  who  has  moved  within  such  area, at or within two miles of a location at which a former licensed new motor  vehicle  dealer  for  the same  line  make  of  new  motor vehicle had ceased operating within the previous two years; or  (iii) the relocation of an existing new motor  vehicle  dealer  within two  miles  of  the existing site of the new motor vehicle dealership if the franchise has been operating on a regular basis  from  the  existing site  for a minimum of three years immediately preceding the relocation; or  (iv)  the  relocation  of  a new motor vehicle dealer of the same line make if that dealer or replacement dealer is moving further away from  a motor vehicle dealer of of the same line make.  (3)  In  determining  whether  good cause has been established for not entering into or relocating an additional new motor vehicle  dealer  for the  same  line make, there shall be individual findings with respect to the following:  (i) the permanency of the investment of both the existing and proposed additional new motor vehicle dealers;  (ii) growth or decline in population, density of population,  and  new car registrations in the area;  (iii) effect on the consuming public in the area;  (iv)  whether  it is injurious or beneficial to the public welfare for an additional new motor vehicle dealer to be established;  (v) whether the new motor vehicle dealers of the  same  line  make  in that  area  are  providing  adequate competition and convenient customer care for the motor vehicles of the same line make including the adequacy of motor vehicle sales and  service  facilities,  equipment,  supply  of motor vehicle parts, and qualified service personnel;  (vi)  whether  the  establishment  of  an additional new motor vehicle dealer or relocation of an existing new  motor  vehicle  dealer  in  the relevant  market  area would increase competition in a manner beneficial to the long-term public interest;  (vii) the effect on the dealer that proposed to relocate; and  (viii) any other factor which may be deemed material by the finder  of fact to the unique facts and circumstances presented.  (dd)  To unreasonably prevent or refuse to approve the relocation of a dealership to another site  within  that  dealership's  relevant  market area.  The  dealership  must  provide prior written notice providing the address of the proposed new location and a site  plan  of  the  proposed facility.  The  franchisor  must,  within  sixty days of receipt of such information, grant or deny the dealer's relocation request.  Failure  to timely deny the request shall be deemed consent to the relocation.  (ee)  To  fail  to  reimburse  a dealer in full for the actual cost of providing a loaner vehicle to any  customer  who  is  having  a  vehicle serviced  at the dealership if the provision of such a loaner vehicle is required by the franchisor. For the purposes of this  paragraph,  actual cost  shall  not  exceed the average cost in the dealer's region for the rental of a substantially similar make and model as  the  vehicle  being serviced.  (ff)(1) To modify the franchise of any franchised motor vehicle dealer unless  the  franchisor notifies the franchised motor vehicle dealer, in writing, of its intention to modify the  franchise  of  such  dealer  at least  ninety  days  before  the  effective  date  thereof,  stating the specific grounds for such modification.  (2)  For  purposes  of  this   paragraph,   the   term   "modify"   or "modification"  means any change or replacement of any franchise if such change or replacement may substantially and  adversely  affect  the  new motor  vehicle  dealer's  rights,  obligations,  investment or return on investment.  (3) If any franchised motor vehicle  dealer  who  receives  a  written notice  of  modification  institutes an action within one hundred twenty days of receipt of such notice  as  provided  in  section  four  hundred  sixty-nine   of  this  article  to  have  a  review  of  the  threatened modification, such  action  shall  serve  to  stay,  without  bond,  the proposed  modification  until  a  final judgment has been rendered in an adjudicatory  proceeding  or  action as provided in section four hundred sixty-nine of this article. A modification is deemed unfair if it is not undertaken in good faith; is not undertaken for  good  cause;  or  would adversely and substantially alter the rights, obligations, investment or return  on  investment  of  the franchised motor vehicle dealer under an existing franchise agreement. In any action brought by the  dealer,  the franchisor  shall  have  the burden of proving that such modification is fair and not prohibited.  (gg) To use an  unreasonable,  arbitrary  or  unfair  sales  or  other performance  standard in determining a franchised motor vehicle dealer's compliance with  a  franchise  agreement.  Before  applying  any  sales, service  or  other  performance  standard  to a franchised motor vehicle dealer, a franchisor  shall  communicate  the  performance  standard  in writing in a clear and concise manner.  (hh)  To  require  that  a  franchised motor vehicle dealer contribute monetarily to any program  or  promotion  without  first  receiving  the written consent of the franchised motor vehicle dealer to participate in such  program  or promotion. For purposes of this paragraph, the written consent  specific  to  the  particular  program  or  promotion  must  be executed, by means of handwritten, typed or electronic signature, within sixty  days  prior  to the start of the particular program or promotion, provided, however, that  consent  shall  not  be  required  to  continue participation  in  a  program or promotion to which the dealer has given written consent to renewal, and provided further, that the dealer  shall be  able to terminate such renewal upon reasonable written notice within thirty days following the start or renewal of the program or promotion.  (ii) To allocate new motor vehicles  to  a  franchised  motor  vehicle dealer based on a program that differentiates between vehicle sales by a franchised  motor  vehicle  dealer within a territory or geographic area assigned to such dealer and vehicle sales outside of such  territory  or geographic area.  (jj)  To  utilize  a discriminatory, unreasonable, arbitrary or unfair system of allocation of new motor vehicle inventory. A franchisor  shall communicate  its  system of allocation in writing in a clear and concise manner to all same line-make dealers located in this state.  (kk) To refuse to disclose to any franchised motor vehicle dealer  the manner  and  mode  of  distribution  of vehicles in the franchised motor vehicle dealer's line make within the state, and an explanation  of  the allocation  system,  including  the  methodology  used,  in  a clear and comprehensible form.   2-a. On and after  the  effective  date  of  this  subdivision,  if  a franchisor  notifies  a  franchised motor vehicle dealer, in writing, of its decision to monitor the continued viability of the  dealership,  the franchisor  shall include in such notice the specific reasons upon which the franchisor's decision is based.   2-b. It shall be unlawful for  any  franchisor  to  provide  financial information  particular  to a franchised motor vehicle dealer, including but not limited to, selling prices and  sales  margins,  that  has  been collected  from  such  franchised  motor  vehicle  dealer  to  any other franchised motor vehicle dealer including  a  franchised  motor  vehicle dealer  in  which the franchisor owns any interest or controls, directly or  indirectly,  the  management  thereof.  Nothing  contained  in  this subdivision  shall  be  deemed to prevent any franchisor from collecting and distributing any such financial information in an  aggregate  manner provided  that  the  information  from any motor vehicle dealer has been  combined with the information from one or more franchised motor  vehicle dealers  such that the financial information from a particular dealer is no longer identifiable to such dealer.   3.  In  any action or proceeding instituted pursuant to the provisions of this section, there shall be available to the franchisor all  of  the defenses  provided for under section thirteen-b of title fifteen, United States code, known as the Robinson-Patman Act.