ORS 650.140
Good cause required to terminate dealer franchise
  • protest of termination
  • notice
  • when reasons for termination required


Notwithstanding the terms of any franchise or other agreement, it is unlawful for any manufacturer, distributor or importer to cancel, terminate or refuse to continue any franchise without showing good cause, provided the dealer protests the termination by filing a complaint in court of competent jurisdiction within the time period specified in subsection (3) of this section.


In determining if good cause exists pursuant to subsection (1) of this section, the court shall consider such factors as:


The amount of business transacted by the dealer as compared to the amount of business available to the dealer.


The investment necessarily made and obligations necessarily incurred by the franchisee in performance of the franchise.


The permanency of the investment.


The adequacy of the franchisee’s new motor vehicle sales and service facilities, equipment and parts.


The qualifications of the management, sales and service personnel to provide the consumer with reasonably good service and care of new motor vehicles.


The failure of the franchisee to substantially comply in good faith with those requirements of the franchise that are reasonable.


Notwithstanding the terms of any franchise or other agreement, a franchisor shall give a franchisee 60 days’ written notice stating the specific reasons for cancellation, termination or noncontinuance of a franchise, provided that a franchisor need only give 30 days’ written notice concerning the following reasons:


Misrepresentation by the franchisee in applying for the franchise.


Insolvency of the franchisee, or filing of any petition by or against the franchisee, under any bankruptcy or receivership law.


Conviction of a felony, provided that conviction after a plea nolo contendere shall be considered a conviction for purposes of this subsection.


Failure of the dealer to maintain its operation open for business for seven consecutive business days or for eight business days out of any 15-business-day period.


Notwithstanding the terms of any franchise or other agreement, a franchisee’s unwillingness to agree to a site-control agreement does not constitute good cause under this section.


(a) If a manufacturer, distributor or importer cancels, terminates or refuses to continue any franchise with the dealer for any reason other than good cause pursuant to the terms of the franchise agreement or for good cause as that term is used in this section, and the manufacturer, distributor or importer did not cancel at the same time a franchise with another motor vehicle dealership of the same line-make within the dealer’s relevant market area, the manufacturer, distributor or importer, or where applicable the manufacturer’s, distributor’s or importer’s successor in interest, shall provide the dealer with the specific reasons why the dealer’s franchise was canceled, terminated or not continued and another dealer’s franchise of the same line-make within the dealer’s relevant market area was retained or renewed.


The information required by paragraph (a) of this subsection must include the criteria and data used in making the determination to cancel, terminate or not continue, or to retain or renew, the franchise, and must be provided within a reasonable period of time not to exceed 30 days after the manufacturer, distributor or importer gives notice of the cancellation, termination or refusal to continue. [1980 c.3 §3; 2009 c.627 §4; 2011 c.177 §3]

Last accessed
May. 15, 2020