North Carolina SB 295: Clarify Motor Vehicle Dealer Laws.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025

SESSION LAW 2025-41
SENATE BILL 295

*S295-v-5*
AN ACT TO CLARIFY VARIOUS MOTOR VEHICLE DEALER LAWS.

The General Assembly of North Carolina enacts:

PREVENT UNFAIR DEALER FRANCHISE TERMINATIONS AND CLARIFY RV
DEALER TERMINATION ASSISTANCE RIGHTS
SECTION 1. G.S. 20-305 reads as rewritten:
"§ 20-305. Coercing dealer to accept commodities not ordered; threatening to cancel
franchise; preventing transfer of ownership; granting additional franchises;
terminating franchises without good cause; preventing family succession.
It shall be unlawful for any manufacturer, factory branch, distributor, or distributor branch,
or any field representative, officer, agent, or any representative whatsoever of any of them:
...
(4) Notwithstanding the terms of any franchise agreement, to prevent or refuse to
approve the sale or transfer of the ownership of a dealership by the sale of the
business, stock transfer, or otherwise, or the transfer, sale or assignment of a
dealer franchise, or a change in the executive management or principal
operator of the dealership, change in use of an existing facility to provide for
the sales or service of one or more additional line-makes of new motor
vehicles, or relocation of the dealership to another site within the dealership's
relevant market area, if the Commissioner has determined, if requested in
writing by the dealer within 30 days after receipt of an objection to the
proposed transfer, sale, assignment, relocation, or change, and after a hearing
on the matter, that the failure to permit or honor the transfer, sale, assignment,
relocation, or change is unreasonable under the circumstances. The following
applies:
...
i. It is unlawful for a manufacturer to, in any way, do any of the
following:
1. Condition its approval of a proposed transfer, sale, assignment,
change in the dealer's executive management, principal
operator, or appointment of a designated successor, on the
existing or proposed dealer's willingness to construct a new
facility, renovate the existing facility, acquire or refrain from
acquiring one or more line-makes of vehicles, separate or
divest one or more line-makes of vehicle, or establish or
maintain exclusive facilities, personnel, or display space.
...
4. Condition, directly or indirectly, the approval of the sale or
transfer of the ownership of a dealership by the sale of the
business, stock transfer, or otherwise, or the transfer, sale,
succession, or assignment of a dealer's franchise, or a change

Page 2 Session Law 2025-41 Senate Bill 295
in the executive management or principal operator of the
dealership, or a dealer's proposed relocation of the dealership
facility, or a dealer's satisfaction of the terms of any incentive
program or contest, upon the existing or proposed dealer's
willingness to enter into a right of first refusal in favor of the
manufacturer.
5. In determining whether to approve a dealer's proposed transfer,
sale, assignment, change in the dealer's executive management,
principal operator, or appointment of a designated successor,
to require an applicant to provide information about or base a
disapproval on whether another manufacturer or distributor
had previously denied, rejected, or otherwise turned down the
application of the applicant, or any person or entity affiliated
with the applicant, to acquire a franchise or dealership or
become principal operator, part of the executive management,
or a successor owner or manager of a dealership.
6. In determining whether to approve a dealer's proposed transfer,
sale, assignment, change in the dealer's executive management,
principal operator, or appointment of a designated successor,
to require an applicant to provide information about or base a
disapproval on whether the applicant, or any person or entity
affiliated with the applicant, had, for any reason, ever
previously commenced a civil or administrative proceeding
against any manufacturer or distributor.
j. If a manufacturer or distributor objects to, denies, rejects, or otherwise
turns down a dealer's proposed transfer, sale, assignment, change in
the dealer's executive management, principal operator, or appointment
of a designated successor, the manufacturer or distributor shall
reimburse both the dealer and applicant for their respective attorneys'
fees, if the decision of the manufacturer or distributor to object to,
deny, reject, or otherwise turn down the dealer's application is
ultimately overturned by a reviewing court or administrative agency,
and after all appellate remedies within this State are exhausted, if it is
found that the turndown was unreasonable.
...
(6) Notwithstanding the terms, provisions or conditions of any franchise or
notwithstanding the terms or provisions of any waiver, to terminate, cancel or
fail to renew any franchise with a licensed new motor vehicle dealer unless
the manufacturer has satisfied the notice requirements of sub-subdivision c.
of this subdivision