{"data":{"id":"us-ok/okla.-stat.-tit.-47-47-565.2v1","jurisdiction":"us-ok","citation":"Okla. Stat. tit. 47, § 47-565.2v1","heading":"Termination, cancellation or nonrenewal of new motor","body":"vehicle dealer franchise.\n\nA. Irrespective of the terms, provisions, or conditions of any\n\nfranchise, or the terms or provisions of any waiver, no manufacturer\n\nshall terminate, cancel, or fail to renew any franchise with a\n\nlicensed new motor vehicle dealer unless the manufacturer has\n\nsatisfied the notice requirements as provided in this section and\n\nhas good cause for cancellation, termination, or nonrenewal. The\n\nmanufacturer shall not attempt to cancel or fail to renew the\n\nfranchise agreement of a new motor vehicle dealer in this state\n\nunfairly and without just provocation or without due regard to the\n\nequities of the dealer or without good faith as defined herein. As\n\nused herein, “good faith” means the duty of each party to any\n\nfranchise agreement to act in a fair and equitable manner toward\n\neach other, with freedom from coercion or intimidation or threats\n\nthereof from each other.\n\nB. Irrespective of the terms, provisions, or conditions of any\n\nfranchise, or the terms or provisions of any waiver, good cause\n\nshall exist for the purpose of a termination, cancellation, or\n\nnonrenewal when:\n\n1. The new motor vehicle dealer has failed to comply with a\n\nprovision of the franchise, which provision is both reasonable and\n\nof material significance to the franchise relationship, or the new\n\nmotor vehicle dealer has failed to comply with reasonable\n\nperformance criteria for sales or service established by the\n\nmanufacturer, and the new motor vehicle dealer has been notified by\n\nwritten notice from the manufacturer; and\n\n2. The new motor vehicle dealer has received written\n\nnotification of failure to comply with the manufacturer’s reasonable\n\nsales performance standards, capitalization requirements, facility\n\ncommitments, business-related equipment acquisitions, or other such\n\nremediable failings exclusive of those reasons enumerated in\n\nparagraph 1 of subsection C of this section, and the new motor\n\nvehicle dealer has been afforded a reasonable opportunity of not\n\nless than six (6) months to comply with such a provision or\n\ncriteria.\n\nC. Irrespective of the terms, provisions, or conditions of any\n\nfranchise agreement prior to the termination, cancellation, or\n\nnonrenewal of any franchise, the manufacturer shall furnish\n\nnotification of such termination, cancellation, or nonrenewal to the\n\nnew motor vehicle dealer and the Oklahoma New Motor Vehicle\n\nCommission as follows:\n\n1. Not less than ninety (90) days prior to the effective date\n\nof the termination, cancellation, or nonrenewal unless for a cause\n\ndescribed in paragraph 2 of this subsection;\n\n2. Not less than fifteen (15) days prior to the effective date\n\nof the termination, cancellation, or nonrenewal with respect to any\n\nof the following:\n\na. insolvency of the new motor vehicle dealer, or the\n\nfiling of any petition by or against the new motor\n\nvehicle dealer under any bankruptcy or receivership\n\nlaw,\n\nb. failure of the new motor vehicle dealer to conduct its\n\ncustomary sales and service operations during its\n\ncustomary business hours for seven (7) consecutive\n\nbusiness days, provided that such failure to conduct\n\nbusiness shall not be due to an act of God or\n\ncircumstances beyond the direct control of the new\n\nmotor vehicle dealer, or\n\nc. conviction of the new motor vehicle dealer of any\n\nfelony which is punishable by imprisonment or a\n\nviolation of the Federal Odometer Act; and\n\n3. Not less than one hundred eighty (180) days prior to the\n\neffective date of the termination or cancellation where the\n\nmanufacturer or distributor is discontinuing the sale of the product\n\nline.\n\nThe notification required by this subsection shall be by\n\ncertified mail, return receipt requested, and shall contain a\n\nstatement of intent to terminate, to cancel, or to not renew the\n\nfranchise, a statement of the reasons for the termination,\nys prior to the\n\neffective date of the termination or cancellation where the\n\nmanufacturer or distributor is discontinuing the sale of the product\n\nline.\n\nThe notification required by this subsection shall be by\n\ncertified mail, return receipt requested, and shall contain a\n\nstatement of intent to terminate, to cancel, or to not renew the\n\nfranchise, a statement of the reasons for the termination,\n\ncancellation, or nonrenewal and the date the termination shall take\n\neffect.\n\nD. Upon the affected new motor vehicle dealer’s receipt of the\n\naforementioned notice of termination, cancellation, or nonrenewal,\n\nthe new motor vehicle dealer shall have the right to file a protest\n\nof such threatened termination, cancellation, or nonrenewal with the\n\nCommission within thirty (30) days and request a hearing. The\n\nhearing shall be held within one hundred eighty (180) days of the\n\ndate of the timely protest by the dealer and in accordance with the\n\nprovisions of the Administrative Procedures Act, Sections 250\n\nthrough 323 of Title 75 of the Oklahoma Statutes, to determine if\n\nthe threatened cancellation, termination, or nonrenewal of the\n\nfranchise has been for good cause and if the factory has complied\n\nwith its obligations pursuant to subsections A, B, and C of this\n\nsection and the factory shall have the burden of proof. Either\n\nparty may request an additional one-hundred-eighty-day extension of\n\nthe hearing date from the Commission. Approval of the requested\n\nextension may not be unreasonably withheld or delayed. If the\n\nCommission finds that the threatened cancellation, termination, or\n\nnonrenewal of the franchise has not been for good cause or violates\n\nsubsection A, B, or C of this section, then it shall issue a final\n\norder stating that the threatened termination is wrongful. A\n\nfactory shall have the right to appeal such order. During the\n\npendency of the hearing and after the decision, through any appeal,\n\nthe franchise shall remain in full force and effect, including the\n\nright to transfer the franchise. If the Commission finds that the\n\nthreatened cancellation, termination, or nonrenewal is for good\n\ncause and does not violate subsection A, B, or C of this section,\n\nthe new motor vehicle dealer shall have the right to an appeal.\n\nDuring the pendency of the action, including the final decision or\n\nappeal, the franchise shall remain in full force and effect,\n\nincluding the right to transfer the franchise. If the new motor\n\nvehicle dealer prevails in the threatened termination action, the\n\nCommission shall award to the new motor vehicle dealer the attorney\n\nfees and costs incurred to defend the action.\n\nE. If the factory prevails in an action to terminate, cancel,\n\nor not renew any franchise, the new motor vehicle dealer shall be\n\nallowed fair and reasonable compensation by the manufacturer for:\n\n1. New, current, and previous model year vehicle inventory\n\nwhich has been acquired from the manufacturer, and which is unused\n\nand has not been damaged or altered while in the new motor vehicle\n\ndealer’s possession;\n\n2. Supplies and parts which have been acquired from the\n\nmanufacturer, for the purpose of this section, limited to any and\n\nall supplies and parts that are listed on the current parts price\n\nsheet available to the new motor vehicle dealer;\n\n3. Equipment and furnishings, provided the new motor vehicle\n\ndealer purchased them from the manufacturer or its approved sources;\n\nand\n\n4. Special tools, with such fair and reasonable compensation to\n\nbe paid by the manufacturer within ninety (90) days of the effective\n\ndate of the termination, cancellation, or nonrenewal, provided the\n\nnew motor vehicle dealer has clear title to the inventory and other\n\nitems and is in a position to convey that title to the manufacturer.\n\na. For the purposes of paragraph 1 of this subsection,\n\nfair and reasonable compensation shall be no less than\nensation to\n\nbe paid by the manufacturer within ninety (90) days of the effective\n\ndate of the termination, cancellation, or nonrenewal, provided the\n\nnew motor vehicle dealer has clear title to the inventory and other\n\nitems and is in a position to convey that title to the manufacturer.\n\na. For the purposes of paragraph 1 of this subsection,\n\nfair and reasonable compensation shall be no less than\n\nthe net acquisition price of the vehicle paid by the\n\nnew motor vehicle dealer.\n\nb. For the purposes of paragraphs 2, 3, and 4 of this\n\nsubsection, fair and reasonable compensation shall be\n\nthe net acquisition price paid by the new motor\n\nvehicle dealer less a twenty-percent (20%) straight-\n\nline depreciation for each year following the dealer’s\n\nacquisition of the supplies, parts, equipment,\n\nfurnishings, and/or special tools.\n\nF. 1. If a factory prevails in an action to terminate, cancel,\n\nor not renew any franchise and the new motor vehicle dealer is\n\nleasing the dealership facilities, the manufacturer shall pay a\n\nreasonable rent to the lessor in accordance with and subject to the\n\nprovisions of this subsection. Nothing in this section shall be\n\nconstrued to relieve a new motor vehicle dealer of its duty to\n\nmitigate damages.\n\nSuch reasonable rental value shall be paid only to the extent\n\nthe dealership premises are recognized in the franchise and only if\n\nthey are:\n\na. used solely for performance in accordance with the\n\nfranchise. If the facility is used for the operation\n\nof more than one franchise, the reasonable rent shall\n\nbe paid based upon the portion of the facility\n\nutilized by the franchise being terminated, canceled,\n\nor nonrenewed, and\n\nb. not substantially in excess of facilities recommended\n\nby the manufacturer.\n\n2. If the facilities are owned by the new motor vehicle dealer,\n\na related entity as defined in 26 U.S.C.A., Section 267(b), or a\n\nmember, partner or shareholder of the dealership, within ninety (90)\n\ndays following the effective date of the termination, cancellation,\n\nor nonrenewal, except a termination, cancellation, or nonrenewal for\n\na cause listed in paragraph 2 of subsection C of this section, at\n\nthe dealer or related entity’s written request, the manufacturer\n\nshall either:\n\na. locate a qualified purchaser who will offer to\n\npurchase the dealership facilities at a reasonable\n\nprice,\n\nb. locate a qualified lessee who will offer to lease the\n\npremises for the remaining lease term at the rent set\n\nforth in the lease, or\n\nc. lease the dealership facilities at a reasonable rental\n\nvalue for the portion of the facility that is\n\nrecognized in the franchise agreement one and one-half\n\n(1.5) years, or\n\nd. purchase the dealer’s existing dealership facility and\n\nreal estate at its fair market value. If the factory\n\nand dealer cannot agree on the fair market value of\n\nthe terminated franchise or agree to a process to\n\ndetermine the fair market value, then the factory and\n\ndealer shall utilize the process described in\n\nparagraph 6 of subsection G of this section. If a\n\nmanufacturer or distributor purchases a dealership\n\nfacility and real estate, then it shall be entitled to\n\nsole ownership, possession, use, and control of any\n\nitems, buildings, or property that were included in\n\nthe contract to purchase.\n\n3. If the facilities are leased by the new motor vehicle dealer\n\nfrom an entity other than a related entity as defined in 26\n\nU.S.C.A., Section 267(b), or a member, partner, or shareholder of\n\nthe dealership, within ninety (90) days following the effective date\n\nof the termination, cancellation, or nonrenewal the manufacturer\n\nwill either:\n\na. locate a tenant or tenants satisfactory to the lessor,\n\nwho will sublet or assume the balance of the lease,\n\nb. arrange with the lessor for the cancellation of the\n\nlease without penalty to the new motor vehicle dealer,\n\nor\n\nc. failing the foregoing, lease the dealership facilities\ndays following the effective date\n\nof the termination, cancellation, or nonrenewal the manufacturer\n\nwill either:\n\na. locate a tenant or tenants satisfactory to the lessor,\n\nwho will sublet or assume the balance of the lease,\n\nb. arrange with the lessor for the cancellation of the\n\nlease without penalty to the new motor vehicle dealer,\n\nor\n\nc. failing the foregoing, lease the dealership facilities\n\nat a reasonable rent for the portion of the facility\n\nthat is recognized in the franchise agreement for one\n\n(1) year or the remainder of the lease, whichever is\n\nless.\n\n4. The manufacturer shall not be obligated to provide\n\nassistance under this section if the new motor vehicle dealer:\n\na. fails to accept a bona fide offer from a prospective\n\npurchaser, sublessee, or assignee,\n\nb. refuses to execute a settlement agreement with the\n\nmanufacturer or lessor if such agreement with the\n\nmanufacturer or lessor would be without cost to the\n\nnew motor vehicle dealer, or\n\nc. fails to make written request for assistance under\n\nthis section within ninety (90) days after the\n\neffective date of the termination, cancellation, or\n\nnonrenewal.\n\n5. The manufacturer shall be entitled to occupy and use any\n\nspace for which it pays rent required by this section.\n\nG. In addition to the repurchase requirements set forth in\n\nsubsections E and F of this section, in the event the termination ,\n\ncancellation, or nonrenewal is the result of a discontinuance of a\n\nproduct line, the manufacturer or distributor shall compensate the\n\nnew motor vehicle dealer as follows:\n\n1. In an amount equivalent to the fair market value of the\n\nterminated franchise as of the date immediately preceding the\n\nmanufacturer’s or distributor’s announcement or provide the new\n\nmotor vehicle dealer with a replacement franchise on substantially\n\nsimilar terms and conditions as those offered to other same line-\n\nmake dealers;\n\n2. If the facilities are owned by the new motor vehicle dealer\n\nor a related entity as defined in 26 U.S.C.A., Section 267(b), or a\n\nmember, partner, or shareholder of the dealership, and the owner has\n\nnot sold the existing dealership facility and real estate within the\n\nlater of one hundred eighty (180) days of listing the property for\n\nsale or ninety (90) days after the effective date of the\n\ntermination, then, upon the written request of the dealer, the\n\nmanufacturer or distributor shall purchase the dealer’s existing\n\ndealership facility and real estate. The facility and real estate\n\nshall be valued as if a new motor vehicle dealership continues to\n\noperate on the property. If the factory and dealer cannot agree on\n\nthe value of the terminated franchise or agree to a process to\n\ndetermine the value, then the factory and dealer shall utilize the\n\nprocess described in paragraph 6 of this subsection. If a\n\nmanufacturer or distributor purchases a dealership facility and real\n\nestate, then it shall be entitled to sole ownership, possession,\n\nuse, and control of any items, buildings, or property that were\n\nincluded in the contract to purchase;\n\n3. If the facilities are leased by the new motor vehicle dealer\n\nfrom an entity other than a related entity as defined in 26\n\nU.S.C.A., Section 267(b), or a member, partner or shareholder of the\n\ndealership, lease the dealership facilities at a reasonable rent for\n\nthe remainder of the lease;\n\n4. Any amount of pecuniary loss to the new motor vehicle\n\ndealership proximately caused by the discontinuation of a product\n\nline, including, but not limited to, the cost of terminating\n\nservices such as the dealership management system contract;\n\n5. The new motor vehicle dealer may immediately request payment\n\nunder this section following the announcement in exchange for\n\ncanceling any further franchise rights, except payments owed to the\n\nnew motor vehicle dealer in the ordinary course of business, or may\nf a product\n\nline, including, but not limited to, the cost of terminating\n\nservices such as the dealership management system contract;\n\n5. The new motor vehicle dealer may immediately request payment\n\nunder this section following the announcement in exchange for\n\ncanceling any further franchise rights, except payments owed to the\n\nnew motor vehicle dealer in the ordinary course of business, or may\n\nrequest payment under this section upon the final termination,\n\ncancellation, or nonrenewal of the franchise. In either case,\n\npayment under this section shall be made not later than ninety (90)\n\ndays after the fair market value is determined, or the lease\n\nagreement is provided and other reasonable documentation is provided\n\nto the manufacturer or distributor sufficient to establish other\n\npecuniary losses, whichever is later; and\n\n6. If the factory and new motor vehicle dealer cannot agree on\n\nthe value of the terminated franchise or real estate, or agree to a\n\nprocess to determine the value, then, within thirty (30) days of a\n\nwritten request by dealer, the factory shall select one appraiser,\n\nand the dealer shall select one appraiser who shall make an\n\nindependent appraisal. The appraisers will be state-certified\n\ngeneral real estate appraisers and be in good standing with the\n\nOklahoma Real Estate Appraisal Board. Before entering upon their\n\nduties, such appraisers shall take and subscribe an oath, before a\n\nnotary public or some other person authorized to administer oaths,\n\nthat they will perform their duties faithfully and impartially to\n\nthe best of their ability. If the appraisals are within ten percent\n\n(10%) of each other, the average of the two appraisals shall\n\nconstitute the value. If the two appraisals differ by more than ten\n\npercent (10%), the two appraisers may appoint a third appraiser who\n\nshall review the two appraisals. The third appraisal, when taken\n\nwith the first two appraisals and averaged among the three, shall\n\nestablish the value. The cost of the third appraiser shall be\n\nshared equally by the factory and dealer. The appraisers shall make\n\na valuation and determine the amount of compensation to be paid by\n\nthe factory to the dealer. The factory will then have ninety (90)\n\ndays to complete the transaction, unless otherwise agreed to by the\n\nparties. The factory and the dealer shall each be responsible for\n\nthe appraiser it retains.","path":["OK Code","Title 47"],"source_url":"https://www.oklegislature.gov/OK_Statutes/CompleteTitles/os47.pdf","current_through":"2026-08-14","vintage":"open-us-law v2026.08, retrieved 2026-09-14","retrieved_at":"2026-09-14T18:32:36Z","sha256":"872e32518008cd8d329aa06a1a47639e095f6cb04b903978719ff8a8c7e3fe6a","source_id":"us-ok","stale":false,"prev":"us-ok/okla.-stat.-tit.-47-47-565.2","next":"us-ok/okla.-stat.-tit.-47-47-565.2v2"},"notice":"GroundRules: Original legal text. Not legal advice."}