PocketLaw | Georgia Code | Delivery of Motor Vehicles; Modification of

Delivery of Motor Vehicles; Modification of Facilities; Transfer of Sales Contracts; Warranties

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

For purposes of this Code section, the term "coerce" means to compel or attempt to compel by threat or use of force or to fail to act in good faith in performing or complying with any term or provision of a franchise or dealer agreement.
No franchisor shall require, attempt to require, coerce, or attempt to coerce any dealer in this state:
1. To order or accept delivery of any new motor vehicle, part, or accessory thereof, equipment, or any other commodity not required by law which shall not have been voluntarily ordered by the dealer, except that this paragraph does not affect any terms or provisions of a franchise requiring dealers to market a representative line of those motor vehicles which the franchisor is publicly advertising;
2. To order or accept delivery of any new motor vehicle with special features, accessories, or equipment not included in the list price of such new motor vehicle as publicly advertised by the franchisor;
3. To refrain from participation in the management of, investment in, or the acquisition of any other line of new motor vehicle or related products. However, this paragraph does not apply unless the dealer maintains a reasonable line of credit for each make or line of new motor vehicle, the dealer remains in compliance with any reasonable facilities requirements of the franchisor, the dealer provides acceptable sales performance, and no change is made in the principal management of the dealer;
4. To expand, construct, or significantly modify facilities without assurances that the franchisor will provide a reasonable supply of new motor vehicles within a reasonable time so as to justify such an expansion in light of the market and economic conditions;
5. To sell, assign, or transfer any retail installment sales contract obtained by such dealer in connection with the sale by such dealer in this state of new motor vehicles to a specified finance company or class of such companies or to any other specified persons;
6. To provide warranty or other services for the account of franchisor, except as provided in Part 3 of this article, the "Motor Vehicle Warranty Practices Act";
7. To acquire any line-make of motor vehicle or to give up, sell, or transfer any line-make of motor vehicle which has been acquired in accordance with this article once such dealer has notified the franchisor that it does not desire to acquire, give up, sell, or transfer such line-make or to retaliate or take any adverse action against a dealer based on such desire;
8. To construct, renovate, or maintain exclusive facilities, personnel, or showroom area dedicated to a particular line-make if the imposition of such a requirement would be unreasonable in light of the existing circumstances, including the franchisor's reasonable business considerations, present economic and market conditions, and forecasts for future economic and market conditions in the dealer's retail territory. The franchisor shall have the burden of proof to demonstrate that its demand for exclusivity is justified by reasonable business considerations and reasonable in light of the dealer's circumstances, but this provision shall not apply to a voluntary agreement when separate and adequate consideration was offered and accepted, provided that the renewal of a franchise agreement shall not by itself constitute separate and adequate consideration. The franchisor shall have the burden of proof to show that the dealer has entered into a voluntary, noncoerced agreement regarding exclusivity;
9. 1. To substantially change, alter, or remodel its dealership or to install new signs or other franchisor image elements that replace or substantially alter those improvements, signs, or franchisor image elements completed within the preceding ten years that were required and approved by the franchisor, factory branch, distributor, or distributor branch or one of its affiliates as part of a program, standard, or policy.
  2. If, during such ten-year period, the manufacturer revises or discontinues an existing program, standard, or policy or establishes a new program, standard, or policy or other benefit relating to construction or substantial alteration of a dealership, a motor vehicle dealer that completed construction or substantial alteration of a dealership as part of a prior program, standard, or policy and elects not to participate in the new or revised program, standard, or policy, shall not be entitled to bonus, incentive, benefit, or otherwise under the new or revised program but shall remain entitled to all benefits under the prior program, standard, or policy according to the terms of such prior program, standard, or policy. If the prior program, standard, or policy under which the dealer completed a construction or substantial alteration does not contain a specific time period during which the manufacturer or distributor must provide payments or benefits to a dealer, then the manufacturer or distributor may not deny the dealer payment or benefits under the terms of that prior program, as it existed when the dealer began to perform under the prior program, for the balance of the ten-year term, regardless of whether the manufacturer's or distributor's program, standard, or policy has been revised or discontinued.
  3. The provisions of this paragraph shall not prohibit a franchisor from:
    1. Continuing any facility improvement program in effect on July 1, 2019, with more than one franchised dealer in the state;
    2. Providing lump sum or regularly scheduled payments to assist a franchised dealer in making a facility improvement, including construction, alteration or remodeling, or installing signage or a franchisor image element; or
    3. Providing compensation or reimbursement to a franchised dealer on reasonable, written terms for a portion of such franchised dealer's costs of making a facility improvement, including construction; alteration or remodeling; the purchase of goods, building materials or services; or installing signage or a franchisor image element which are not paid on a per vehicle basis.
  4. Nothing in this paragraph shall be construed to permit a dealer to erect or maintain signs that do not conform to the manufacturer's intellectual property rights, trademarks, or trade dress usage guidelines.
  5. As used in this paragraph, the term "to substantially change, alter, or remodel" means to make an alteration that has a major impact on the architectural features, characteristics, or integrity of the structure or lot. Such term shall include the relocation or erection of freestanding signs, but shall not include routine maintenance, such as interior painting, reasonably necessary to keep a dealership facility in attractive condition;
10. 1. To purchase goods or services to make improvements to the dealer's facilities from a vendor selected, identified, or designated by a manufacturer or one of its affiliates by program, incentive provision, or otherwise without making available to the dealer the option to obtain the goods or services of comparable grade, quality, and overall design, and the same or substantially the same materials and characteristics from a vendor chosen by the dealer and approved by the manufacturer; provided, however, that such approval by the manufacturer shall not be unreasonably withheld, and the dealer's option to select a vendor shall not be available if the manufacturer provides substantial reimbursement for the goods or services offered.
  2. If signs, other than signs containing the manufacturer's brand or logo or freestanding signs that are not directly attached to a building, or other franchisor image or design elements or trade dress are to be leased to the dealer by a vendor selected, identified, or designated by the manufacturer, such dealer has the right to purchase the signs or other franchisor image or design elements or trade dress of comparable grade, quality, and overall design, and the same or substantially the same materials and characteristics from a vendor selected by the dealer if such signs, franchisor image or design elements, or trade dress are approved by the manufacturer. Approval by the manufacturer shall not be unreasonably withheld.
  3. Nothing in this paragraph shall be construed to allow a dealer or vendor to impair, infringe upon, or eliminate, directly or indirectly, the intellectual property rights of the manufacturer including, but not limited to, the manufacturer's intellectual property rights in any trademarks or trade dress, or other intellectual property interests owned or controlled by the manufacturer.
  4. As used in this paragraph, the term:
    1. "Goods" shall not include movable displays, brochures, and promotional materials containing material subject to the intellectual property rights of a manufacturer, including copyright, trademark, or trade dress rights or any manufacturer's design or architectural review service.
    2. "Substantial reimbursement" means an amount equal to or greater than the cost savings that would result if the dealer were to utilize a vendor of the dealer's own selection instead of using the vendor identified by the manufacturer; or
11. Whether by agreement, program, incentive, or otherwise, to sell, lease, offer to sell or lease, solicit, or advertise the sale or lease of new motor vehicles in a manner that violates a law or any properly promulgated rule or regulation of this state.

(Code 1981, §10-1-661, enacted by Ga. L. 1993, p. 1585, § 2; Ga. L. 1994, p. 97, § 10; Ga. L. 1999, p. 1194, § 6; Ga. L. 2010, p. 988, § 8/HB 1072; Ga. L. 2019, p. 517, § 6/SB 122.)

The 2019 amendment, effective July 1, 2019, in subsection (b), deleted "or" at the end of paragraph (b)(7), substituted a semicolon for a period at the end of paragraph (b)(8), and added paragraphs (b)(9) through (b)(11).

Code Commission notes.

- Pursuant to Code Section 28-9-5, in 2010, "line-make" was substituted for "line make" three times in paragraph (b)(7) and in the first sentence of paragraph (b)(8).

Editor's notes.

- Ga. L. 2010, p. 988, § 1, not codified by the General Assembly, provides: "WHEREAS, the General Assembly desires to reaffirm the legislative findings and declarations set forth in Code Section 10-1-621 and to make changes to the Georgia Motor Vehicle Franchise Practices Act in an effort to promote the stability of franchised motor vehicle dealerships in this state, thereby maintaining necessary reliable services to the consuming public, maintaining full and fair competition among dealers in the public interest, and providing continued employment to the citizens of this state."

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