ORS 650.162
Transfer, assignment or sale of interest in dealership or franchise
  • notices
  • approval of franchisor
  • right of first refusal


(1)

To transfer, assign or sell the ownership or management, or any interest in the ownership or management, of a dealer, dealership or franchise, the dealer shall notify the franchisor of the decision to transfer, assign or sell. The notice shall include completed application forms and related information generally used by the manufacturer, distributor or importer to conduct a review of transfers, assignments or sales and a copy of all agreements regarding the transfer, assignment or sale.

(2)

Within 60 days of receiving notice sent under subsection (1) of this section, a franchisor shall send a notice by certified mail to the dealer. The notice sent under this subsection shall specify approval or disapproval of the transfer, assignment or sale. If the transfer, assignment or sale is disapproved, the notice shall set forth material reasons for the disapproval.

(3)

A manufacturer, distributor or importer may not unreasonably withhold approval of a transfer, assignment or sale. It is unreasonable for a manufacturer, distributor or importer to reject a prospective transferee, assignee or buyer who is of good moral character and who otherwise meets the manufacturer’s, distributor’s or importer’s written and reasonable standards or qualifications relating to the prospective transferee’s, assignee’s or buyer’s:

(a)

Business experience and performance; and

(b)

Financial qualifications.

(4)

If the manufacturer, distributor or importer does not respond within 60 days of receiving a notice sent under subsection (1) of this section, the transfer, assignment or sale shall be considered approved and shall take effect.

(5)

A manufacturer, distributor or importer may exercise a right of first refusal if the right is included in the franchise agreement, the transfer, assignment or sale consists of more than 50 percent of the dealer’s ownership of the franchise and all of the following requirements are met:

(a)

The manufacturer, distributor or importer sends a notice by certified mail to the dealer within 60 days of receiving a notice under subsection (1) of this section specifying that the franchisor is exercising a right of first refusal.

(b)

The exercise of the right of first refusal will result in the dealer and any owner of the dealer receiving consideration, terms and conditions that are either the same as or better than those contracted to receive under the transfer, assignment or sale.

(c)

The transferee, assignee or buyer is not any of the following:

(A)

Any of the following family members of any owner of the dealer:

(i)

A spouse;

(ii)

A child or stepchild;
(iii) A grandchild or stepgrandchild;

(iv)

The spouse of a child, stepchild, grandchild or stepgrandchild;

(v)

A brother or sister or a stepbrother or stepsister; or

(vi)

A parent or stepparent;

(B)

A manager employed by the dealer who is otherwise qualified to be a dealer;

(C)

A partnership or corporation controlled by any of the family members listed in paragraph (c)(A) of this subsection; or

(D)

A trust established or to be established:

(i)

For the purposes of allowing the transferee, assignee or buyer to continue to qualify as such under the manufacturer’s, distributor’s or importer’s standards; or

(ii)

To provide for the succession of the franchise to qualified designated family members or a qualified manager in the event of the death or incapacity of the dealer.

(d)

The manufacturer, distributor or importer pays the reasonable expenses, including attorney fees, that are incurred by the transferee, assignee or buyer before the manufacturer, distributor or importer exercises a right of first refusal. A manufacturer, distributor or importer may require the transferee, assignee or buyer to provide an accounting of expenses incurred prior to issuing payment. [1999 c.660 §9]

Source
Last accessed
May. 15, 2020