(a) A manufacturer or distributor, directly or through any authorized officer, agent, or employee, may terminate, cancel, or fail to renew a manufacturer/dealer agreement only with good cause.
Terms Used In Tennessee Code 55-28-104
Area of sales responsibility: means the geographical area, agreed to by the dealer and the manufacturer in the manufacturer/dealer agreement, within which area the dealer has the exclusive right to display and sell the manufacturer's new recreational vehicles of a particular line-make to the retail public. See Tennessee Code 55-28-102
Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
Dealer: means any person, firm, corporation, or business entity licensed or required to be licensed under this chapter or chapter 17, part 4 of this title. See Tennessee Code 55-28-102
Distributor: means any person, firm, corporation, or business entity that purchases new recreational vehicles for resale to dealers. See Tennessee Code 55-28-102
Manufacturer: means any person, firm, corporation, or business entity that engages in the manufacturing of recreational vehicles. See Tennessee Code 55-28-102
Nolo contendere: No contest-has the same effect as a plea of guilty, as far as the criminal sentence is concerned, but may not be considered as an admission of guilt for any other purpose.
Plea: In a criminal case, the defendant's statement pleading "guilty" or "not guilty" in answer to the charges, a declaration made in open court.
State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
Vehicle: means every device in, upon or by which any person or property is or may be transported or drawn upon a highway, excepting devices used exclusively upon stationary rails or tracks. See Tennessee Code 55-8-101
written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
(b) The manufacturer or distributor has the burden of showing good cause for terminating, canceling, or failing to renew a manufacturer/dealer agreement with a dealer. For purposes of determining whether there is good cause for the proposed action, any of the following factors may be considered:
(1) The extent of the affected dealer’s penetration in the area of sales responsibility;(2) The nature and extent of the dealer’s investment in its business;(3) The adequacy of the dealer’s service facilities, equipment, parts, supplies, and personnel;(4) The effect of the proposed action on the community;(5) The extent and quality of the dealer’s service under recreational vehicle warranties;(6) The dealer’s failure to follow agreed-upon procedures or standards related to the overall operation of the dealership; or(7) The dealer’s performance under the terms of its manufacturer/dealer agreement.(c) Except as otherwise provided in this section, a manufacturer or distributor shall provide a dealer with at least ninety (90) days prior written notice of termination, cancellation, or nonrenewal of the manufacturer/dealer agreement.(d)(1) The notice must state all reasons for the proposed termination, cancellation, or nonrenewal and must further state that if, within thirty (30) days following receipt of the notice, the dealer provides to the manufacturer or distributor a written notice of intent to cure all claimed deficiencies, the dealer will then have ninety (90) days following receipt of the original notice to rectify the deficiencies.(2) If the deficiencies are rectified within ninety (90) days, the manufacturer’s or distributor’s notice is voided. If the dealer fails to provide the notice of intent to cure the deficiencies or fails to cure the deficiencies in the prescribed time period, the termination, cancellation, or nonrenewal takes effect as provided in the original notice.(e) The notice period may be reduced to thirty (30) days if the manufacturer’s or distributor’s grounds for termination, cancellation, or nonrenewal are due to any of the following good cause factors:
(1) A dealer or one of its owners being convicted of or entering a plea of nolo contendere to a felony;(2) The abandonment or closing of the business operations of the dealer for ten (10) consecutive business days unless the closing is due to an act of God, strike, labor difficulty, or other cause over which the dealer has no control;(3) A significant misrepresentation by the dealer materially affecting the business relationship;(4) A suspension or revocation of the dealer’s license, or refusal to renew the dealer’s license, by the commission; or(5) A material violation of this chapter which is not cured within thirty (30) days of written notice by the manufacturer.(f) Subsection (c) does not apply if the reason for termination, cancellation, or nonrenewal is the dealer’s insolvency, the occurrence of an assignment for the benefit of creditors, or bankruptcy.
