SDCL § 32-6B-72: Succession--Refusal to honor.

If a franchisor believes that good cause exists to refuse to honor the intended succession under § 32-6B-71, the franchisor shall serve the named successor written notice of refusal to honor the intended succession within sixty days of its receipt of the notice of intended succession, or within sixty days of receiving the information requested pursuant to § 32-6B-71, whichever is later. The notice shall contain specific grounds for the refusal to honor the succession.

If the notice of refusal to honor the intended succession is not timely served upon the intended successor, the successor may continue the franchise subject only to termination as otherwise permitted in this chapter.

In determining whether good cause exists for the refusal to honor the intended succession, the franchisor has the burden of proving that the intended successor is not a person of good moral character or does not meet the franchisor's existing and reasonable standards. Good cause for refusal to honor succession does not include the owner's dealership being dualed with another franchisor's line.