Succession to Franchise Upon Death of Franchisee

  1. Law
  2. Georgia Code
  3. Commerce and Trade
  4. Selling and Other Trade Practices
  5. Motor Vehicle Franchise Practices
  6. Motor Vehicle Franchise Continuation and Succession
  7. Succession to Franchise Upon Death of Franchisee

Checkout our iOS App for a better way to browser and research.

  1. Unless there exists good cause for refusal to honor succession on the part of the franchisor, any designated successor of a deceased or incapacitated owner may succeed to the ownership interest of the owner under the existing franchise if:
    1. The designated successor gives the franchisor written notice of his or her intention to succeed to the ownership interest within 60 days of the owner's death or incapacity or within a longer period if so provided in the franchise agreement; and
    2. The designated successor agrees to be bound by all the terms and conditions of the franchise.
  2. The franchisor may request, and the designated successor shall provide promptly upon said request, personal and financial data that is customarily required by the franchisor to determine whether the succession should be honored.
  3. If a franchisor believes that good cause exists for refusing to honor the succession to the ownership interest of an owner by a designated successor of a deceased or incapacitated owner, the franchisor may, within 60 days following receipt of notice of the designated successor's intent to succeed to the ownership interest of the owner or any personal or financial data which the franchisor has requested, serve upon the designated successor notice of its refusal to honor the succession and of its intent to discontinue the existing franchise with the dealer; however, if the franchisor shall enter into one or more interim or trial agreements with the designated successor, which interim or trial agreements may not extend more than three years from the owner's death or disability, then and in such event such notice shall be deemed timely if sent within 60 days of the termination of such interim or trial agreement.The notice must state the specific grounds for the refusal to honor the succession and of its intent to discontinue the existing franchise with the dealer.
  4. If a franchisor refuses to honor the succession to the ownership interest of a deceased or incapacitated owner, then and in such event:
    1. The franchisor shall allow the designated successor a reasonable period of time which shall not be less than six months in which to negotiate a sale of the dealership.Any such sale shall be subject to Code Section 10-1-653; and
    2. Upon termination of the franchise pursuant to such refusal, the provisions of Code Section 10-1-651 shall apply.
  5. If notice of refusal and discontinuance is not timely served upon the designated successor, the franchise shall continue in effect subject to termination only as otherwise permitted by this part.
  6. In determining whether good cause for the refusal to honor the succession exists, the franchisor has the burden of proving that the designated successor is a person who is not of good moral character or does not meet the franchisor's existing and reasonable standards.
  7. No franchisor shall terminate, cancel, or fail to renew any franchise solely because of the death or incapacity of an owner who is not listed in the franchise as one on whose expertise and abilities the franchisor relied in the granting of the franchise.
  8. This Code section does not preclude a new motor vehicle dealer from time to time designating any person as his or her successor by written instrument filed with the manufacturer or distributor and, if such instrument is currently on file with such manufacturer or distributor, it alone shall determine the succession rights to the management and operation of the dealership.

(Code 1981, §10-1-652, enacted by Ga. L. 1993, p. 1585, § 2.)


Download our app to see the most-to-date content.