Section 63-17-109 - Right of first refusal(1) In the event of a proposed sale or transfer of a dealership and the franchise agreement for the dealership contains a right of first refusal in favor of the manufacturer or distributor, notwithstanding the terms of the franchise agreement, the manufacturer or distributor shall be permitted to exercise a right of first refusal to acquire the dealership only if all of the following requirements are met:(a) The manufacturer or distributor sends by certified mail, return receipt requested, or any other reliable means of communication, notice of its intent to exercise its right of first refusal within sixty (60) days of receipt of the executed contract for the proposed sale or transfer and completed application and related documents reasonably requested by the manufacturer or distributor. The manufacturer or distributor shall provide the application and notice of other requirements within fifteen (15) days of request. In no event shall the manufacturer or distributor exercise its right of first refusal more than one hundred twenty (120) days after receipt of the executed contract. The manufacturer or distributor and the applicant shall act in good faith to provide the required information in a timely and expeditious manner.(b) The exercise of the right of first refusal will result in the motor vehicle dealer receiving consideration, terms and conditions that are either the same as or greater than that for which such dealer has contracted for in connection with the proposed transaction.(2) The manufacturer's or distributor's right of first refusal shall not apply to a transaction involving one (1) of the following:(a) A designated family member or members, including the spouse, child or grandchild, spouse of a child or grandchild, brother, sister or parent of the dealer-operator, or one or more motor vehicle dealer owners;(b) A manager employed by the motor vehicle dealer in the dealership during the previous five (5) years that is otherwise qualified as a dealer-operator;(c) A partnership or corporation controlled by any of the family members of the dealer-operator;(d) A trust arrangement established or to be established for the purpose of allowing the new motor vehicle dealer to continue to qualify as such pursuant to the manufacturer's or distributor's standards, or provides for the succession of the franchise agreement to designated family members or qualified management in the event of the death or incapacity of the dealer-operator or its principal owner or owners.(3)(a) The manufacturer or distributor shall pay the reasonable expenses, including attorneys' fees which do not exceed the usual, customary and reasonable fees charged for similar work done for other clients, incurred by the proposed owner prior to the exercise of the right of first refusal in negotiating and implementing the contract for the proposed sale of the dealership. The expenses and attorneys' fees shall be paid to the proposed new owner at the time of the closing of the sale at which the manufacturer or distributor exercises its right of first refusal.(b) No payment of expenses and attorneys' fees shall be required if the person claiming reimbursement has not submitted or caused to be submitted an accounting of those expenses within thirty (30) days after the receipt of the manufacturer's or distributor's written request for the accounting. A manufacturer or distributor may request the accounting before exercising its right of first refusal.(4) If the selling dealer discloses the manufacturer's right of first refusal to the proposed owner in writing, the motor vehicle dealer shall not have any liability to any person as a result of a manufacturer or distributor exercising its right of first refusal and the manufacturer or distributor shall assume the defense of the selling motor vehicle dealer for any claims by the proposed owner arising from the exercise of the right of first refusal.(5) If the manufacturer or distributor does not exercise its right of first refusal within the time period set forth in subsection (1)(a), the manufacturer or distributor shall act upon the proposed sale of the franchise promptly and in good faith but in no event more than one hundred twenty (120) days after receipt of the completed application and related documents reasonably requested by the manufacturer or distributor.(6) Neither this section nor Section 63-17-75 shall be construed to prohibit any of the following: (a) The ownership, operation or control by a manufacturer, factory branch, distributor, distributor branch or subsidiary thereof, of a dealership for a temporary period, not to exceed one (1) year, during the transition from one (1) licensed motor vehicle dealer to another. The commission may extend the temporary ownership, operation or control period upon a showing of good cause by the manufacturer, factory branch, distributor, distributor branch or subsidiary thereof;(b) The ownership, operation or control of a dealership by a manufacturer, factory branch, distributor, distributor branch or subsidiary thereof, while in a bona fide relationship with an independent person, other than a manufacturer, factory branch, distributor, distributor branch or an agent or affiliate thereof, who has made a significant, bona fide, unencumbered initial investment in the dealership that is subject to loss, and who can reasonably expect to acquire full ownership of the dealership within a reasonable period of time, and on reasonable terms and conditions, provided that a reasonable period shall be presumed to not exceed eight (8) years; or(c) The ownership, operation or control of not more than one (1) motor vehicle dealership location within this state by a manufacturer that manufactures and sells only motor vehicles that are plug-in electric vehicles that do not rely on any nonelectric source of power in all modes of operation, provided that the dealership has been continuously licensed since August 1, 2021, and provided that the ownership or controlling interest in the dealership is not transferred, sold or conveyed to another person required to be licensed under this title. Laws, 2000, ch. 418, § 2; Laws, 2006, ch. 432, § 5, eff. 7/1/2006.Amended by Laws, 2023, ch. 387, HB 401,§ 2, eff. 7/1/2023.