2023 New York Laws › GBS - General Business › Article 11-B - Franchises for the Sale of Motor Fuels › 199-I - Dealers' Rights to Transfer, Assign or Dispose of the Franchise Upon Notice to Distributor.

§  199-i.  Dealers'  rights  to  transfer,  assign  or  dispose of the
franchise upon notice to distributor. 1. Every franchise  agreement  and
any   other  lease  or  agreement  in  connection  therewith  between  a
distributor and a dealer shall be  transferable  or  assignable  at  the
option   of  the  dealer  provided  the  distributor  consents  to  such
assignment, which consent shall not be unreasonably withheld. A proposed
assignee shall meet the reasonable standards normally  required  by  the
distributor  or  its prospective dealers, including, but not limited to:
(a) experience and qualifications;  (b)  credit  rating;  (c)  financial
resources; (d) moral character; and (e) operation by the assignee of not
more  than  two  dealerships  with  the distributor from whom consent is
requested. Prior to any transfer or assignment, the dealer shall  notify
the  distributor of an intention to transfer or assign such franchise by
written notice of intent setting forth the prospective assignee's  name,
address,  statement  of  financial qualification and business experience
during the previous five years. The distributor shall, within sixty days
after receipt of such notice of  intent,  give  written  notice  to  the
dealer  of  its  consent or objection to such transfer or assignment. If
the distributor objects to the transfer or assignment,  it  shall  state
its  reasons  therefor.  If  the  distributor  does not reply within the
specified sixty days, approval of the transfer or  assignment  shall  be
deemed  granted.    Such transfer or assignment shall not be valid until
the assignee agrees in writing to comply with all  the  requirements  of
the  franchise  and any other lease or agreement in connection therewith
then in effect.
A dealer may not exercise the right of assignment or transfer after he
has been  notified  of  termination  or  non-renewal  of  the  franchise
agreement  for  cause  as  described  in the federal petroleum marketing
practices act unless the notice of intent to assign  or  transfer  under
this section has been delivered to the distributor prior to the dealer's
receipt of such notice of termination or non-renewal.
2.  (a)  Upon  the death of the dealer, the franchise and any lease or
other agreement in connection therewith shall devolve to the  designated
successor  of  such dealer, provided that prior to his death, the dealer
has notified the  distributor  in  writing  of  the  name,  address  and
relationship  of  the  designated successor and the designated successor
meets the qualifications specified in subdivision one of this section at
the time of the dealer's death. For the purpose of this subdivision, the
term "designated successor" shall include one or more of  the  following
persons:  (i)  the surviving spouse; (ii) the adult child or children of
the deceased dealer; and (iii) any adult  next-of-kin  of  the  deceased
dealer  who  has  actively  participated  in the dealership for at least
twelve months preceding the dealer's death. The twelve month period need
not be continuous.
Upon the death of the dealer, the designated successor shall  promptly
assume  operation  of  the  franchise  and  shall be responsible for the
operation of the franchise in accordance with the terms  and  conditions
of   the   deceased   dealer's  franchise,  pending  acceptance  by  the
distributor of the designated successor. The distributor may assist  the
designated  successor with the operation of the station in a supervisory
capacity at its own expense.  Within  twenty  days  after  the  dealer's
death,  the  designated  successor  shall  give  written  notice  to the
distributor of his or her election to assume and operate the  franchise,
which  shall include the information required in subdivision one of this
section,  and  shall  also  notify  the  distributor   concerning   what
arrangements  have  been made for the operation of the franchise pending
the acceptance or rejection of the designated  successor.  Within  forty
days  after such notification, the distributor shall give written notice

to the designated successor  of  its  approval  or  disapproval  of  the
designated successor. If the distributor does not approve the designated
successor,  it shall state its reasons therefor. If the distributor does
not  reply  within  the  specified  forty  day  period,  approval of the
designated successor shall be deemed granted.
(b) In the event that the  distributor  has  timely  objected  to  the
designated  successor, the personal representative or next-of-kin of the
deceased dealer may, within sixty days from receipt  by  the  designated
successor  of the notice of disapproval, elect to transfer or assign the
franchise in accordance with the provisions of subdivision one  of  this
section.  Such an election shall be made by giving written notice to the
distributor of the election within twenty days after the receipt by  the
designated  successor of the notice of disapproval. Written notice shall
be given to the distributor of the intention to transfer or  assign  the
franchise  in  accordance with the provisions of subdivision one of this
section prior to the expiration of such sixty day period.  Pending  such
a  transfer  or assignment, the distributor may assume full operation of
the franchise for its own account, in which event it  shall  account  to
the  personal  representative  of the deceased dealer for any inventory,
assets and personal property of any kind on the premises at the time the
distributor accepts possession of the franchise.
(c) In the event  that  the  deceased  dealer  has  not  designated  a
successor  or  the  designated  successor  has not elected to assume and
operate the franchise, the personal representative or next-of-kin of the
deceased dealer may, within one hundred twenty days after  the  dealer's
death, elect to transfer the franchise in accordance with the provisions
of  subdivision  one  of this section. Such an election shall be made by
giving written notice to the distributor  of  such  an  election  within
twenty  days  after the dealer's death. Written notice shall be given to
the distributor of the intention to transfer or assign the franchise  in
accordance  with the provisions of subdivision one of this section prior
to the expiration of such one hundred twenty day period.  Within  twenty
days   after   the   dealer's  death,  the  personal  representative  or
next-of-kin shall also give written notice to the distributor concerning
what arrangements have been made for  the  operation  of  the  franchise
pending   the  transfer  or  assignment.  Pending  such  a  transfer  or
assignment, the distributor may elect to assume full  operation  of  the
franchise  for  its  own account, in which event it shall account to the
personal representative of the deceased dealer for any inventory, assets
and personal property of any kind  on  the  premises  at  the  time  the
distributor accepts possession of the franchise.
(d)  No franchise by succession or assignment pursuant to this section
shall be valid unless and until the  designated  successor  or  assignee
agrees  in  writing  to  comply  with  all  of  the  requirements of the
franchise and any other lease or agreement in connection therewith  then
in effect.
3.  This section shall not apply to any franchise until the dealer has
operated the service station pursuant to a franchise agreement with  the
distributor  for  a  continuous  three  year  period, which period shall
include the term of any franchise in effect prior to or on the effective
date of this section and the term of  any  franchise  transferred  to  a
designated  successor  pursuant  to  paragraph  (a)  of  subdivision two
hereof.
4. Notice of transfer or assignment and notice of  objections  stating
the  reasons  therefor  may  be  transmitted  by  any method of personal
service established under article three of the civil  practice  law  and
rules,  or  by mailing same by certified or registered mail to the party
to be notified at their actual place  of  business.  Notice  by  mailing

shall  be  deemed  made  when  deposited  in  a  post office or official
depository of the United States postal service.
5.  Upon  receipt  of  the  written  notice  of objection with reasons
therefor, as provided in subdivisions one and two  of  this  section,  a
dealer,   designated   successor   or  the  personal  representative  or
next-of-kin of the  deceased  dealer  may  bring  an  action  against  a
distributor  in  any  court  of  competent  jurisdiction  for wrongfully
impeding the transfer or assignment of a franchise,  provided  that  any
such  action must be commenced within one year following receipt of such
notice of objection. The court, upon finding that the stated reasons for
objection are arbitrary, capricious or  unreasonable,  may  award  money
damages and grant such equitable relief as it deems proper.
6.  In  the  event that any of the time periods referred to herein are
not  met  by  a  dealer,  assignee,   designated   successor,   personal
representative or next-of-kin, the franchise shall terminate.