2007 Minnesota Statutes

CHAPTER 80E. MOTOR VEHICLE SALE AND DISTRIBUTION

80E.01 LEGISLATIVE PURPOSE AND INTENT.
The legislature finds and declares that the distribution and sale of motor vehicles within this
state vitally affects the general economy of the state and the public interest and the public welfare,
and that in order to promote the public interest and the public welfare, and in the exercise of its
police power, it is necessary to regulate and license motor vehicle manufacturers, distributors or
wholesalers, and factory or distributor representatives, and to regulate dealers of motor vehicles
doing business in this state in order to prevent fraud, impositions, and other abuses upon its
citizens and to protect and preserve the investments and properties of the citizens of this state.
History: 1981 c 59 s 2

80E.02 APPLICABILITY.
The provisions of sections 80E.01 to 80E.17 shall apply to all new motor vehicle dealers and
contracts existing between new motor vehicle dealers and manufacturers on May 1, 1981 and to
all subsequent contracts between new motor vehicle dealers and manufacturers.
History: 1981 c 59 s 3

80E.03 DEFINITIONS.
    Subdivision 1. Terms. As used in sections 80E.01 to 80E.17, unless the context otherwise
requires, the following terms have the meanings given them.
    Subd. 2. Motor vehicle. "Motor vehicle" is as defined in section 168.011, subdivision 4,
but does not include farm implements or machinery or special mobile equipment as defined
in section 168.011, subdivision 22.
    Subd. 3. New motor vehicle dealer; dealer. "New motor vehicle dealer" or "dealer" means a
person who in the ordinary course of business is engaged in the business of selling new motor
vehicles to consumers or other end users and who holds a valid sales and service agreement,
franchise, or contract, granted by a manufacturer, distributor, or wholesaler for the sale of its
motor vehicles.
    Subd. 4. Manufacturer. "Manufacturer" means any person who manufactures or assembles
new motor vehicles or any person, partnership, firm, association, joint venture, corporation, or
trust which is controlled by the manufacturer.
    Subd. 5. Distributor. "Distributor" means any person who in whole or in part offers for
sale, sells, or distributes any new motor vehicle to new motor vehicle dealers, or who maintains
factory representatives or who controls any person who in whole or in part offers for sale, sells, or
distributes any new motor vehicle to new motor vehicle dealers.
    Subd. 6. Factory branch. "Factory branch" means a branch office maintained by a
manufacturer for the purpose of selling, or offering for sale, motor vehicles to a distributor or
new motor vehicle dealer, or for directing or supervising in whole or in part factory or distributor
representatives.
    Subd. 7. New motor vehicle. "New motor vehicle" means a motor vehicle which is in the
possession of a manufacturer, distributor, or wholesaler, or has been sold only to the holders of a
valid sales and service agreement, franchise, or contract, granted by the manufacturer, distributor,
or wholesaler for the sale of the new motor vehicle and which is in fact new and on which the
original title has not been issued from the franchised dealer.
    Subd. 8. Franchise. "Franchise" means the written agreement or contract between any
new motor vehicle manufacturer and any new motor vehicle dealer which grants to the dealer
the right to market motor vehicles and which purports to fix the legal rights and liabilities of the
parties to the agreement or contract.
    Subd. 9. Good faith. "Good faith" means honesty in fact and the observation of reasonable
commercial standards of fair dealing in the trade as is defined and interpreted in section
336.2-103, clause (1)(b).
    Subd. 10. Designated family member. "Designated family member" means the spouse,
child, grandchild, parent, brother, or sister of the owner of a new motor vehicle dealer who,
in the case of the owner's death, is entitled to inherit the ownership interest in the new motor
vehicle dealer under the terms of the owner's will or who, in the case of an incapacitated owner
of a new motor vehicle dealer, has been appointed by a court as the legal representative of the
new motor vehicle dealer's property.
    Subd. 11.[Repealed, 1985 c 34 s 6]
History: 1981 c 59 s 4; 1982 c 452 s 1

80E.04 WARRANTY OBLIGATIONS TO DEALERS.
    Subdivision 1. Requirements. Each new motor vehicle manufacturer shall specify in
writing to each of its new motor vehicle dealers licensed in this state the dealer's obligations
for preparation, delivery, and warranty service on its products. The manufacturer shall also
compensate the new motor vehicle dealer for warranty service and parts required of the dealer by
the manufacturer, and shall provide the dealer the schedule of compensation to be paid the dealer
for parts, work, and service in connection with warranty services, and the time allowance for the
performance of the work and service. This section applies to all repair services performed by the
dealer for the manufacturer or with the approval of the manufacturer and for which the dealer
receives compensation or reimbursement from the manufacturer.
    Subd. 2. Reasonable compensation for services. In no event shall the schedule of
compensation fail to include reasonable compensation for diagnostic work, as well as repair
service, parts, and labor. Time allowances for the diagnosis and performance of warranty work
and service shall be reasonable and adequate for the work to be performed. The hourly labor rate
paid to and the reimbursement for parts purchased by a dealer for warranty services shall not be
less than the rate charged by the dealer for like service to nonwarranty customers for nonwarranty
service and repairs.
    Subd. 3. Violations. It is a violation of this section for any new motor vehicle manufacturer
to fail to: (a) perform any warranty obligations that it undertakes under the motor vehicle
manufacturer's warranty; (b) include in written notices of factory recalls to new motor vehicle
owners and dealers the expected date by which necessary parts and equipment will be available to
dealers for the correction of the defects; or (c) to compensate any of the motor vehicle dealers
licensed in this state for repairs effected by a recall.
    Subd. 4. Payment of claims. All claims made by new motor vehicle dealers pursuant to
this section for labor and parts shall be paid within 30 days of their approval. Claims shall be
either approved or disapproved within 30 days after they are submitted to the manufacturer
in the manner and on the forms it prescribes, and any claims not specifically disapproved in
writing within 30 days after the manufacturer receives them shall be construed to be approved
and payment must follow within 30 days; provided, however, that the manufacturer retains the
right to audit the claims for a period of one year and to charge back any amounts paid on claims
not reasonably substantiated or fraudulent claims. The audit and charge back provisions of this
subdivision also apply to all other incentive and reimbursement programs that are subject to
audit by the manufacturer.
    Subd. 5. Product liability; limitation. As between the dealer and the manufacturer, the
obligations imposed by this section shall constitute the dealer's only responsibility for product
liability based in whole or in part on strict liability in tort.
    Subd. 6. Definitions. For purposes of this section, the terms "manufacturer" and "dealer"
include manufacturers and distributors of motor vehicle engines and their dealers.
History: 1981 c 59 s 5; 1985 c 34 s 1; 1989 c 25 s 1; 1991 c 69 s 1,2

80E.05 INDEMNIFICATION REQUIRED.
Notwithstanding the terms of any franchise agreement to the contrary, it shall be a violation
of sections 80E.01 to 80E.17 for any new motor vehicle manufacturer to fail to indemnify and
hold harmless its franchised dealers against any judgment for damages, including, but not limited
to, those based on strict liability, negligence, misrepresentation, warranty (express or implied),
or revocation of acceptance as is defined in section 336.2-608, where the complaint, claim, or
lawsuit relates to the alleged defective or negligent manufacture, assembly, or design of new
motor vehicles, parts or accessories or other functions by the manufacturer, beyond the control of
the dealer. Indemnification under this section must include court costs, reasonable attorney fees,
and expert witness fees incurred by the motor vehicle dealer.
History: 1981 c 59 s 6; 1991 c 69 s 3

80E.06 CANCELLATIONS, TERMINATIONS, OR NONRENEWALS.
    Subdivision 1. Requirements. Notwithstanding the terms of any franchise agreement or
waiver to the contrary, no manufacturer shall cancel, terminate, or fail to renew any franchise
relationship with a licensed new motor vehicle dealer unless the manufacturer has:
(a) satisfied the notice requirement of section 80E.08;
(b) acted in good faith as defined in section 80E.03, subdivision 9; and
(c) good cause for the cancellation, termination, or nonrenewal.
For the purposes of sections 80E.06 to 80E.09, a manufacturer includes a distributor. Any
action by a manufacturer terminating a contractual relationship with a distributor is not effective
to terminate existing valid franchises running from the distributor to new motor vehicle dealers
unless the manufacturer follows the provisions of sections 80E.06 to 80E.09.
    Subd. 2. Circumstances constituting good cause. Notwithstanding the terms of any
franchise agreement or waiver to the contrary, good cause exists for the purposes of a termination,
cancellation, or nonrenewal, when the new motor vehicle dealer fails to comply with a provision
of the franchise which is both reasonable and of material significance to the franchise relationship;
provided, that the dealer has been notified in writing of the failure within 180 days after the
manufacturer first acquired knowledge of the failure.
If failure by the new motor vehicle dealer relates to the performance of the new motor vehicle
dealer in sales or service, then good cause shall be defined as the failure of the new motor vehicle
dealer to comply with reasonable performance criteria established by the manufacturer; provided,
that the new motor vehicle dealer was apprised by the manufacturer in writing of the failure; the
notification stated that notice was provided for failure of performance pursuant to sections 80E.01
to 80E.17; the new motor vehicle dealer was afforded a reasonable opportunity in no event
less than six months to comply with the criteria; and the dealer did not demonstrate substantial
progress toward compliance with the manufacturer's performance criteria during the period.
To rebut allegations of good cause for a proposed termination, a dealer may present
evidence including, but not limited to, a showing that the grounds for termination resulted from
acts or circumstances beyond the control of the dealer and which were communicated to the
manufacturer, or that in evaluating the dealer's compliance with reasonable sales criteria, the
manufacturer failed to consider the dealer's sales of factory program vehicles. For the purposes of
this subdivision, "factory program vehicle" means a vehicle of the current model year offered for
sale and resold by the manufacturer directly or at a factory sponsored or authorized auction and
purchased by a dealer holding a current franchise from the manufacturer for that same line make.
History: 1981 c 59 s 7; 1985 c 34 s 2; 1988 c 611 s 4; 1991 c 69 s 4

80E.07 CANCELLATION, TERMINATION, OR NONRENEWAL; LIMITATIONS.
    Subdivision 1. Circumstances not constituting good cause. Notwithstanding the terms
of any franchise agreement or waiver to the contrary, the following examples represent
circumstances which do not by themselves constitute good cause for the termination, cancellation,
or nonrenewal of a franchise:
(a) a change of ownership of the new motor vehicle dealer's dealership. This paragraph
does not authorize any change in ownership which would have the effect of the sale of the
franchise without the manufacturer's or distributor's consent, but consent shall not in any case be
unreasonably withheld. The burden of establishing the reasonableness is on the franchisor;
(b) the fact that the new motor vehicle dealer refused to purchase or accept delivery of any
new motor vehicle parts, accessories, or any other commodity or services not ordered by the
new motor vehicle dealer, other than parts necessary to conduct recall campaigns or perform
warranty service;
(c) the fact that the new motor vehicle dealer owns, invests in, participates in the management
of, holds a license for the sale of another make or line of new motor vehicle, or has established
another make or line of new motor vehicle in the same dealership facilities as those of the
manufacturer; provided, that the new motor vehicle dealer maintains a reasonable line of credit
for each make or line of new motor vehicle, and that the new motor vehicle dealer remains in
substantial compliance with the terms and conditions of the franchise and with any reasonable
capital, credit, or facilities' requirements of the manufacturer; or
(d) a change in the location of the new motor vehicle dealership. This paragraph does not
authorize a change in location without the manufacturer's or distributor's consent, but consent
shall not in any case be unreasonably withheld. The burden of establishing reasonableness is on
the franchisor.
    Subd. 2. Burden of proof. The manufacturer has the burden of proving that it acted in good
faith; that the notice requirements have been complied with; and that there was good cause for the
franchise termination, cancellation, or nonrenewal.
History: 1981 c 59 s 8; 1982 c 452 s 2; 1988 c 611 s 5

80E.08 NOTICE OF TERMINATION, CANCELLATION, OR NONRENEWAL.
    Subdivision 1. Requirements. Notwithstanding the terms of any franchise agreement or
waiver to the contrary, prior to the termination, cancellation, or nonrenewal of any franchise, the
manufacturer shall furnish notice of the termination, cancellation, or nonrenewal to the new motor
vehicle dealer as provided in subdivision 2.
    Subd. 2. Generally. Notice shall be in writing and except as provided in subdivision 3
shall be given not less than 90 days prior to the effective date of the termination, cancellation,
or nonrenewal.
    Subd. 3. Specific exceptions. (a) At least 15 days' notice must be provided with respect to
terminations, cancellations, or nonrenewals involving the following circumstances:
(1) conviction of or plea of nolo contendere of a franchised motor vehicle dealer, or one of its
principal owners, of a crime which constitutes a felony as defined in section 609.02, subdivision 2;
(2) the business operations of the franchised motor vehicle dealer have been abandoned or
closed for seven consecutive business days unless the closing is due to an act of God, strike or
labor difficulty, or other cause over which the dealer has no control;
(3) a significant misrepresentation by the new motor vehicle dealer; or
(4) the suspension, revocation, or refusal to renew the franchised motor vehicle dealer's
license pursuant to section 168.27.
(b) Not less than 180 days' notice must be provided prior to the effective date of cancellation,
termination, or nonrenewal where the manufacturer or distributor is discontinuing the sale
of the product line.
    Subd. 4. Contents and delivery. The notice shall be sent by certified mail or personally
delivered to the new motor vehicle dealer. The notice shall contain the following information:
(a) a statement of intention to terminate, cancel, or nonrenew the franchise;
(b) a statement of the reasons for the termination, cancellation, or nonrenewal; and
(c) the date on which the termination, cancellation, or nonrenewal takes effect.
History: 1981 c 59 s 9; 1988 c 611 s 6

80E.09 PAYMENTS REQUIRED UPON TERMINATION, CANCELLATION, OR
NONRENEWAL.
    Subdivision 1. Requirements. Upon the termination, cancellation, or nonrenewal of
any franchise, the new motor vehicle dealer shall, in the time prescribed, be allowed fair and
reasonable compensation by the manufacturer for the following items:
(a) new motor vehicle inventory which was originally acquired from the manufacturer, as
limited in clause (f);
(b) equipment and furnishings if the new motor vehicle dealer purchased them from the
manufacturer;
(c) special tools;
(d) supplies, including accessories and parts, purchased from the manufacturer;
(e) a sum equal to the current fair rental value of the dealership facilities as an ongoing new
motor vehicle dealership for a period of one year from the effective date of the termination,
cancellation, or nonrenewal, or until the facilities are leased or sold, whichever is less, if the
dealer owns the facilities. If the facilities are leased from a lessor other than the manufacturer, a
sum equivalent to rent for the remainder of the term of the lease or one year, whichever is less.
Payment under this clause shall not be required if the termination, cancellation, or nonrenewal
was for good cause based on a conviction or plea of nolo contendere of the dealer or one of its
principal owners for a crime which constitutes a felony as described in section 609.02, subdivision
2 , or if it has been demonstrated that the dealer has exhibited a course of conduct constituting
fraud with respect to the manufacturer or the general public. Nothing in this subdivision relieves
the dealer from the obligation to mitigate damages upon termination, cancellation, or nonrenewal.
Any amount due under this paragraph is reduced to the extent the dealership makes other use
of the property, sells, leases or subleases the property, or secures release from a lease. If the
dealer rejects reduction of facility rental value compensation as described in this paragraph, the
manufacturer is entitled to use of the premises for the period for which compensation is to be
provided or the dealer may elect to receive no compensation;
(f) fair and reasonable compensation as applied to paragraphs (a) and (d) means the
manufacturer shall reimburse the dealer for 100 percent of the net cost to the dealer, including
transportation, of all new current model year motor vehicle inventory acquired from the
manufacturer which has not been materially altered or substantially damaged, and all new
motor vehicle inventory not of the current model year which has not been materially altered
or substantially damaged; provided the noncurrent model year vehicles were acquired from
the manufacturer and drafted on the dealer's financing source or paid for within 120 days prior
to the effective date of the termination, cancellation, or nonrenewal. The manufacturer shall
reimburse the dealer for 100 percent of the current net prices on motor vehicle accessories and
parts, including superseded parts listed in current price lists or catalogues plus five percent of
the current net price of all accessories and parts returned to compensate the dealer for handling,
packing, and loading the parts.
    Subd. 2. Time in which payments must be made. Fair and reasonable compensation shall
be paid by the manufacturer when possible within 90 days of the effective date of termination,
cancellation, or nonrenewal, provided the dealer has clear title to the inventory and other items,
is in a position to convey that title to the manufacturer and as long as this period will allow
compliance with the notification requirements of any state or federal laws relating to creditor
notification.
    Subd. 3. Voluntary terminations, cancellations, or nonrenewals. For the purposes of
reimbursement under this section, termination, cancellation, or nonrenewal includes a voluntary
termination, cancellation, or nonrenewal by the dealer, and the compensation provided for in
subdivision 1, except clause (e) thereof, shall be paid to the dealer.
History: 1981 c 59 s 10; 1Sp1981 c 4 art 4 s 1; 1982 c 452 s 3-5; 1983 c 57 s 1; 1988 c
611 s 7; 1992 c 472 s 1; 1993 c 13 art 2 s 5

80E.10 [Repealed, 1987 c 150 s 3]

80E.11 SURVIVORSHIP.
    Subdivision 1. Authorization. Any designated family member of a deceased or incapacitated
owner of a new motor vehicle dealer may succeed to the ownership of the new motor vehicle
dealer under the existing franchise or distribution agreement: (a) if the designated family member
gives the manufacturer, distributor, factory branch, or importer of new motor vehicles written
notice of the intention to succeed to ownership of the dealership within 120 days of the owner's
death or incapacity; (b) if the designated family member agrees to be bound by all of the terms
and conditions of the existing franchise; and (c) unless there exists good cause for refusal to honor
the succession on the part of the manufacturer, factory branch, distributor, or importer.
    Subd. 2. Personal and financial data. As soon as possible after designating a family member
pursuant to this section, the dealer shall inform the manufacturer, factory branch, distributor, or
importer of the designation and, upon request, shall provide personal and financial data that is
reasonably necessary to determine whether the succession should be honored. Failure to inform
the manufacturer, factory branch, distributor or importer shall not affect the right of the designee
to succeed to ownership of the dealership. At the time of serving notice under subdivision 1, the
designated family member shall provide, upon the request of the manufacturer, distributor, factory
branch, or importer, a current update of the personal and financial data described above.
    Subd. 3. Notice of discontinuance or refusal to honor succession. If a manufacturer,
distributor, factory branch, or importer believes that good cause exists for refusing to honor the
succession to the ownership and operation of a new motor vehicle dealer by a family member
of a deceased or incapacitated owner of a new motor vehicle dealer under the existing franchise
agreement, the manufacturer, distributor, factory branch, or importer may, within 60 days after
receipt of the personal and financial data requested under subdivision 2, serve notice upon the
designated family member of its refusal to honor the succession and of its intent to discontinue
the existing franchise agreement with the new motor vehicle dealer no sooner than 90 days
from the date the notice is served.
    Subd. 4. Contents of notice. The notice must state the specific grounds for the refusal
to honor the succession and discontinue the existing franchise agreement with the new motor
vehicle dealer.
    Subd. 5. Effect of notice not timely served. If notice of refusal and discontinuance is not
timely served upon the family member, the franchise agreement shall continue in effect subject to
termination only as otherwise permitted by sections 80E.01 to 80E.17.
    Subd. 6. Burden of proof. In determining whether good cause for the refusal to honor the
succession exists, the manufacturer, distributor, factory branch, or importer has the burden of
proving that the successor is a person who is not of good moral character or does not meet the
franchisor's existing and reasonable standards and, considering the volume of sales and service
of the new motor vehicle dealer, uniformly applied minimum business experience standards in
the market area.
    Subd. 7. Succession agreements. Notwithstanding the foregoing, in the event the new motor
vehicle dealer and franchisor have duly executed an agreement concerning succession rights prior
to the dealer's death, the agreement shall be observed, even if it designates an individual other
than the surviving spouse or heirs of the franchised motor vehicle dealer.
History: 1981 c 59 s 12; 1982 c 452 s 6,7

80E.12 UNLAWFUL ACTS BY MANUFACTURERS, DISTRIBUTORS, OR FACTORY
BRANCHES.
It shall be unlawful for any manufacturer, distributor, or factory branch to require a new
motor vehicle dealer to do any of the following:
(a) order or accept delivery of any new motor vehicle, part or accessory thereof, equipment,
or any other commodity not required by law which has not been voluntarily ordered by the new
motor vehicle dealer, provided that this paragraph does not modify or supersede reasonable
provisions of the franchise requiring the dealer to market a representative line of the new motor
vehicles the manufacturer or distributor is publicly advertising;
(b) order or accept delivery of any new motor vehicle, part or accessory thereof, equipment,
or any other commodity not required by law in order for the dealer to obtain delivery of any other
motor vehicle ordered by the dealer;
(c) order or accept delivery of any new motor vehicle with special features, accessories,
or equipment not included in the list price of the motor vehicles as publicly advertised by the
manufacturer or distributor;
(d) participate monetarily in an advertising campaign or contest, or to purchase any
promotional materials, showroom, or other display decorations or materials at the expense of the
new motor vehicle dealer;
(e) enter into any agreement with the manufacturer or to do any other act prejudicial to the
new motor vehicle dealer by threatening to cancel a franchise or any contractual agreement
existing between the dealer and the manufacturer. Notice in good faith to any dealer of the
dealer's violation of any terms of the franchise agreement shall not constitute a violation of
sections 80E.01 to 80E.17;
(f) change the capital structure of the new motor vehicle dealer or the means by or through
which the dealer finances the operation of the dealership; provided, that the new motor vehicle
dealer at all times meets any reasonable capital standards agreed to by the dealer; and also
provided, that no change in the capital structure shall cause a change in the principal management
or have the effect of a sale of the franchise without the consent of the manufacturer or distributor
as provided in section 80E.13, paragraph (j);
(g) prevent or attempt to prevent, by contract or otherwise, any motor vehicle dealer from
changing the executive management control of the new motor vehicle dealer unless the franchisor
proves that the change of executive management will result in executive management control
by a person who is not of good moral character or who does not meet the franchisor's existing
reasonable capital standards and, with consideration given to the volume of sales and services
of the new motor vehicle dealer, uniformly applied minimum business experience standards in
the market area; provided, that where the manufacturer, distributor, or factory branch rejects a
proposed change in executive management control, the manufacturer, distributor, or factory
branch shall give written notice of its reasons to the dealer;
(h) refrain from participation in the management of, investment in, or the acquisition of,
any other line of new motor vehicle or related products; provided, however, that this clause does
not apply unless the new motor vehicle dealer maintains a reasonable line of credit for each
make or line of new motor vehicle, and that the new motor vehicle dealer remains in substantial
compliance with the terms and conditions of the franchise and with any reasonable facilities
requirements of the manufacturer;
(i) during the course of the agreement, change the location of the new motor vehicle
dealership or make any substantial alterations to the dealership premises during the course of the
agreement, when to do so would be unreasonable; or
(j) prospectively assent to a release, assignment, novation, waiver, or estoppel whereby a
dealer relinquishes any rights under sections 80E.01 to 80E.17, or which would relieve any
person from liability imposed by sections 80E.01 to 80E.17 or to require any controversy between
a new motor vehicle dealer and a manufacturer, distributor, or factory branch to be referred to any
person or tribunal other than the duly constituted courts of this state or the United States, if the
referral would be binding upon the new motor vehicle dealer.
History: 1981 c 59 s 13; 1985 c 34 s 4; 1991 c 69 s 5

80E.13 UNFAIR PRACTICES BY MANUFACTURERS, DISTRIBUTORS, FACTORY
BRANCHES.
It is unlawful and an unfair practice for a manufacturer, distributor, or factory branch to
engage in any of the following practices:
(a) delay, refuse, or fail to deliver new motor vehicles or new motor vehicle parts or
accessories in reasonable time and in reasonable quantity relative to the new motor vehicle
dealer's facilities and sales potential in the dealer's relevant market area, after having accepted an
order from a new motor vehicle dealer having a franchise for the retail sale of any new motor
vehicle sold or distributed by the manufacturer or distributor, if the new motor vehicle or new
motor vehicle parts or accessories are publicly advertised as being available for delivery or
actually being delivered. This clause is not violated, however, if the failure is caused by acts or
causes beyond the control of the manufacturer;
(b) refuse to disclose to any new motor vehicle dealer handling the same line make, the
manner and mode of distribution of that line make within the relevant market area;
(c) obtain money, goods, service, or any other benefit from any other person with whom the
dealer does business, on account of, or in relation to, the transaction between the dealer and the
other person, other than for compensation for services rendered, unless the benefit is promptly
accounted for, and transmitted to, the new motor vehicle dealer;
(d) increase prices of new motor vehicles which the new motor vehicle dealer had ordered
for private retail consumers prior to the dealer's receiving the written official price increase
notification. A sales contract signed by a private retail consumer shall constitute evidence of
each order if the vehicle is in fact delivered to that customer. In the event of manufacturer price
reductions, the amount of any reduction received by a dealer shall be passed on to the private
retail consumer by the dealer if the retail price was negotiated on the basis of the previous
higher price to the dealer;
(e) offer any refunds or other types of inducements to any new motor vehicle dealer for the
purchase of new motor vehicles of a certain line make without making the same offer to all other
new motor vehicle dealers in the same line make within the relevant market area;
(f) release to any outside party, except under subpoena or in an administrative or judicial
proceeding involving the manufacturer or dealer, any business, financial, or personal information
which may be provided by the dealer to the manufacturer, without the express written consent
of the dealer or unless pertinent to judicial or governmental administrative proceedings or to
arbitration proceedings of any kind;
(g) deny any new motor vehicle dealer the right of free association with any other new
motor vehicle dealer for any lawful purpose;
(h) unfairly discriminate among its new motor vehicle dealers with respect to warranty
reimbursement or authority granted its new vehicle dealers to make warranty adjustments with
retail customers;
(i) compete with a new motor vehicle dealer in the same line make operating under
an agreement or franchise from the same manufacturer, distributor, or factory branch. A
manufacturer, distributor, or factory branch is considered to be competing when it has an
ownership interest, other than a passive interest held for investment purposes, in a dealership of
its line make located within the state. A manufacturer, distributor, or factory branch shall not,
however, be deemed to be competing:
(1) when operating a dealership, either temporarily or for a reasonable period, which is
for sale to any qualified independent person at a fair and reasonable price, or when involved
in a bona fide relationship in which an independent person has made a significant investment
subject to loss in the dealership and can reasonably expect to acquire full ownership and full
management and operational control of the dealership within a reasonable time on reasonable
terms and conditions; or
(2) if it has an existing direct or indirect ownership interest in a new motor vehicle dealer
in this state as of January 1, 2000, and has no more than four franchised dealers in this state. A
manufacturer, distributor, or factory branch described in this clause that has unaffiliated dealers
of the same line make in this state may acquire an interest in existing dealers of that line make
but it may not establish any new dealership in which it would own an interest or approve an
additional location for the sale of new motor vehicles by an affiliated dealership. A manufacturer,
distributor, or factory branch described in this clause is permitted to alter its ownership interest in
a new motor vehicle dealer;
(j) prevent a new motor vehicle dealer from transferring or assigning a new motor vehicle
dealership to a qualified transferee. There shall be no transfer, assignment of the franchise, or
major change in the executive management of the dealership, except as is otherwise provided
in sections 80E.01 to 80E.17, without consent of the manufacturer, which shall not be withheld
without good cause. In determining whether good cause exists for withholding consent to a
transfer or assignment, the manufacturer, distributor, factory branch, or importer has the burden of
proving that the transferee is a person who is not of good moral character or does not meet the
franchisor's existing and reasonable capital standards and, considering the volume of sales and
service of the new motor vehicle dealer, reasonable business experience standards in the market
area. Denial of the request must be in writing and delivered to the new motor vehicle dealer
within 60 days after the manufacturer receives the completed application customarily used by the
manufacturer, distributor, factory branch, or importer for dealer appointments. If a denial is not
sent within this period, the manufacturer shall be deemed to have given its consent to the proposed
transfer or change. In the event of a proposed sale or transfer of a franchise, the manufacturer,
distributor, factory branch, or importer shall be permitted to exercise a right of first refusal to
acquire the franchisee's assets or ownership if:
(1) the franchise agreement permits the manufacturer, distributor, factory branch, or importer
to exercise a right of first refusal to acquire the franchisee's assets or ownership in the event of a
proposed sale or transfer;
(2) the proposed transfer of the dealership or its assets is of more than 50 percent of the
ownership or assets;
(3) the manufacturer, distributor, factory branch, or importer notifies the dealer in writing
within 60 days of its receipt of the complete written proposal for the proposed sale or transfer on
forms generally utilized by the manufacturer, distributor, factory branch, or importer for such
purposes and containing the information required therein and all documents and agreements
relating to the proposed sale or transfer;
(4) the exercise of the right of first refusal will result in the dealer and dealer's owners
receiving the same or greater consideration with equivalent terms of sale as is provided in the
documents and agreements submitted to the manufacturer, distributor, factory branch, or importer
under clause (3);
(5) the proposed change of 50 percent or more of the ownership or of the dealership
assets does not involve the transfer or sale of assets or the transfer or issuance of stock by the
dealer or one or more dealer owners to a family member, including a spouse, child, stepchild,
grandchild, spouse of a child or grandchild, brother, sister, or parent of the dealer owner; to
a manager who has been employed in the dealership for at least four years and is otherwise
qualified as a dealer operator; or to a partnership or corporation owned and controlled by one or
more of such persons; and
(6) the manufacturer, distributor, factory branch, or importer agrees to pay the reasonable
expenses, including reasonable attorney fees, which do not exceed the usual customary and
reasonable fees charged for similar work done for other clients incurred by the proposed new
owner and transferee before the manufacturer, distributor, factory branch, or importer exercises its
right of first refusal, in negotiating and implementing the contract for the proposed change of
ownership or transfer of dealership assets. However, payment of such expenses and attorney fees
shall not be required if the dealer has not submitted or caused to be submitted an accounting of
those expenses within 20 days after the dealer's receipt of the manufacturer, distributor, factory
branch, or importer's written request for such an accounting. The manufacturer, distributor, factory
branch, or importer may request such an accounting before exercising its right of first refusal. The
obligation created under this clause is enforceable by the transferee;
(k) threaten to modify or replace or modify or replace a franchise with a succeeding franchise
that would adversely alter the rights or obligations of a new motor vehicle dealer under an
existing franchise or that substantially impairs the sales or service obligations or investments of
the motor vehicle dealer;
(l) unreasonably deny the right to acquire factory program vehicles to any dealer holding
a valid franchise from the manufacturer to sell the same line make of vehicles, provided that
the manufacturer may impose reasonable restrictions and limitations on the purchase or resale
of program vehicles to be applied equitably to all of its franchised dealers. For the purposes of
this paragraph, "factory program vehicle" has the meaning given the term in section 80E.06,
subdivision 2 ;
(m) fail or refuse to offer to its same line make franchised dealers all models manufactured
for that line make, other than alternative fuel vehicles as defined in section 216C.01, subdivision
1b . Failure to offer a model is not a violation of this section if the failure is not arbitrary and is
due to a lack of manufacturing capacity, a strike, labor difficulty, or other cause over which the
manufacturer, distributor, or factory branch has no control;
(n) require a dealer to pay an extra fee, or remodel, renovate, or recondition the dealer's
existing facilities, or purchase unreasonable advertising displays, training, tools, or other
materials, or to require the dealer to establish exclusive facilities or dedicated personnel as a
prerequisite to receiving a model or a series of vehicles.
History: 1981 c 59 s 14; 1988 c 611 s 8; 1991 c 69 s 6; 2000 c 409 s 1; 2001 c 62 s 1

80E.135 WAIVERS AND MODIFICATIONS PROHIBITED.
No manufacturer, distributor, or factory branch shall, before entering into a franchise with a
new motor vehicle dealer or during the franchise term, use any written instrument, agreement,
or waiver, to attempt to nullify or modify any provision of this chapter, or prevent a new motor
vehicle dealer from bringing an action in a particular forum otherwise available under law. These
instruments, agreements, and waivers are null and void.
History: 1988 c 611 s 9

80E.14 LIMITATIONS ON ESTABLISHING OR RELOCATING DEALERSHIPS.
    Subdivision 1. Notification; protest; hearing. In the event that a manufacturer seeks to enter
into a franchise establishing an additional new motor vehicle dealership or relocating an existing
new motor vehicle dealership within or into a relevant market area where the line make is then
represented, the manufacturer shall, in writing, first notify each new motor vehicle dealer in this
line make in the relevant market area of the intention to establish an additional dealership or to
relocate an existing dealership within or into that market area. The relevant market area is a radius
of ten miles around an existing dealership. Within 30 days of receiving the notice or within 30
days after the end of any appeal procedure provided by the manufacturer, the new motor vehicle
dealership may commence a civil action in a court of competent jurisdiction pursuant to section
80E.17 challenging the establishing or relocating of the new motor vehicle dealership. An action
brought under this section shall be placed on the calendar ahead of other civil actions to be heard
and determined as expeditiously as possible. Thereafter the manufacturer shall not establish or
relocate the proposed new motor vehicle dealership unless the court has determined that there is
good cause for permitting the establishment or relocation of the motor vehicle dealership.
For the purposes of this section, the reopening in a relevant market area of a new motor
vehicle dealership within two miles of a location at which a former dealership of the same line
make had been in operation within the previous two years shall not be deemed the establishment
of a new motor vehicle dealership if the reopening is carried out in good faith and does not violate
the provisions of section 80E.13, paragraph (i).
The relocation of an existing dealer within its area of responsibility as defined in the
franchise agreement shall not be subject to this section, if the proposed relocation site is within
five miles of its existing location and is not within a radius of five miles of an existing dealer of
the same line make.
A manufacturer's establishment or approval of an additional new motor vehicle sales,
service, or parts location by its line make dealer is considered the establishment of a new motor
vehicle dealership subject to the requirements of this section.
    Subd. 2. Good cause. In determining whether good cause has been established for entering
into or relocating an additional franchise for the same line make, the court shall take into
consideration the existing circumstances, including, but not limited to:
(a) the extent, nature, and permanency of the investment of the proposed new dealership and
the existing motor vehicle dealers of the same line make in the relevant market area;
(b) the effect on the retail new motor vehicle business and the consuming public in the
relevant market area;
(c) whether it is injurious to existing new motor vehicle dealers of the same line make
in the relevant market area and the public welfare for an additional new motor dealership to
be established;
(d) whether the new motor vehicle dealers of the same line make in that relevant market area
are providing adequate competition and convenient consumer care for the motor vehicles of the
line make in the market area including the adequacy of motor vehicle sales and service facilities,
equipment, supply of motor vehicle parts, and qualified service personnel;
(e) whether the new motor vehicle dealers of the same line make in the relevant market area
are providing adequate market penetration and representation; provided, that good cause shall
not be shown solely by a desire for further market penetration;
(f) whether the establishment of an additional new motor vehicle dealership would increase
competition, and therefore be in the public interest;
(g) the growth or decline in population and new car registrations in the relevant market area;
(h) the effect the proposed new dealership would have on the provision of stable, adequate,
and reliable sales and service to purchasers of the same line make in the relevant market area; and
(i) the effect the proposed new dealership would have on the stability of existing franchises
of the same line make in the relevant market area.
History: 1981 c 59 s 15; 1Sp1981 c 4 art 4 s 3; 1982 c 452 s 8; 1985 c 34 s 5; 1987 c 150 s
1,2; 1995 c 107 s 1; 2000 c 409 s 2

80E.15 MANUFACTURERS, DISTRIBUTORS, FACTORY BRANCHES ACTING AS
LESSORS.
A manufacturer, distributor or factory branch acting in the capacity of lessor of buildings or
facilities to a new motor vehicle dealer may not take any actions or include in a lease agreement
relating to those buildings or facilities any provisions which would be in contravention of or
prohibited by sections 80E.01 to 80E.17.
History: 1981 c 59 s 16

80E.16 ENFORCEMENT.
    Subdivision 1. Civil penalty. Any person who violates section 80E.04, 80E.12 or 80E.13
shall be subject to a fine of not more than $2,000 for each violation. Any person who fails to
comply with a final judgment or order rendered by a court of competent jurisdiction, issued for a
violation of sections 80E.01 to 80E.17, shall be subject to a fine of not more than $25,000. The
fines authorized by this subdivision shall be imposed in a civil action brought by the attorney
general on behalf of the state of Minnesota, and shall be deposited into the state treasury.
    Subd. 2. Remedies cumulative. Nothing in this section shall be construed to limit the power
of the state to punish any person for any conduct which constitutes a crime under any other statute.
History: 1981 c 59 s 17

80E.17 CIVIL REMEDIES.
Notwithstanding the terms of any franchise agreement or waiver to the contrary, any person
whose business or property is injured by a violation of sections 80E.01 to 80E.17, or any person
injured because of the refusal to accede to a proposal for an arrangement which, if consummated,
would be in violation of sections 80E.01 to 80E.17, may bring a civil action to enjoin further
violations and to recover the actual damages sustained, together with costs and disbursements,
including reasonable attorney's fees.
History: 1981 c 59 s 18; 1986 c 444

80E.18 NO RETROACTIVE APPLICATION.
The provisions of this chapter shall not apply to any action to terminate or cancel a motor
vehicle franchise if the notice to terminate or cancel was given prior to May 1, 1981. Any such
action to terminate or cancel shall be governed by the laws and rules of the state of Minnesota
in effect on the day notice to terminate or cancel was given.
History: 1982 c 452 s 9; 1985 c 248 s 70