TITLE 10 COMMERCE AND TRADE

Section 1. Selling and Other Trade Practices, 10-1-1 through 10-1-915.

ARTICLE 22 MOTOR VEHICLE FRANCHISE PRACTICES

10-1-664. Establishing a new dealership or relocating an existing dealership in the market area of an existing dealership; notice; petitions to enjoin or prohibit.

Any franchisor which intends to establish a new dealership or to relocate a current dealership for a particular line-make motor vehicle within the relevant market area of an existing dealership of the same line-make motor vehicle shall give written notice of such intent by certified mail or statutory overnight delivery to such existing dealership. The notice shall include:
1. The specific location of the additional or relocated dealership;
2. The date on or after which the additional or relocated dealership will commence operation at the new location;
3. The identity of all existing dealerships in whose relevant market area the new or relocated dealership is to be located; and
4. The names and addresses of the dealer and principals in the new or relocated dealership.
Any existing dealership in whose relevant market area a franchisor intends to establish a new dealership or to relocate a current dealership may within 60 days of the receipt of the notice petition a superior court to enjoin or prohibit the establishment of the new or relocated dealership within the relevant market area of the existing dealership. The court or other tribunal of competent jurisdiction shall enjoin or prohibit the establishment of the new or relocated dealership within the relevant market area of the existing dealerships unless the franchisor can prove by a preponderance of the evidence that the existing dealership is not providing adequate representation of the line-make motor vehicle in the existing dealership's relevant market area and that the new or relocated dealership is necessary to provide the public with reliable and convenient sales and service within the relevant market area. The burden of proof in establishing adequate representation shall be on the franchisor. In determining whether the existing dealership is providing adequate representation and whether the new or relocated dealership is necessary, the court or other tribunal may consider, but is not limited to considering, the following:
1. The impact that the establishment of the new or relocated dealership will have on consumers, the public interest, and the existing dealership; provided, however, that financial impact may be considered only with respect to the existing dealership;
2. The size and permanency of investment reasonably made and the reasonable obligations incurred by the existing dealership to perform its obligations under the dealership's franchise agreement;
3. The reasonably expected market penetration of the line-make motor vehicle for the relevant market area involved, after consideration of all factors which may affect such penetration, including, but not limited to, demographic factors such as age, income, education, size class preference, product popularity, retail lease transactions, and other factors affecting sales to consumers in the relevant market area;
4. Any actions by the franchisor in denying its existing dealership of the same line make the opportunity for reasonable growth, market expansion, or relocation, including the availability of line-make motor vehicles in keeping with the reasonable expectations of the franchisor in providing an adequate number of dealerships in the relevant market area;
5. Any attempts by the franchisor to coerce the existing dealership into consenting to an additional or relocated dealership of the same line make in the relevant market area;
6. Distance, travel time, traffic patterns, and accessibility between the existing dealership of the same line make and the location of the proposed new or relocated dealership;
7. Whether benefits to consumers will likely occur from the establishment or relocation of the dealership which benefits cannot be obtained by other geographic or demographic changes or expected changes in the relevant market area;
8. Whether the existing dealership is in substantial compliance with its franchise agreement;
9. Whether there is adequate interbrand and intrabrand competition with respect to the line-make motor vehicles, including the adequacy of sales and service facilities;
10. Whether the establishment or relocation of the proposed dealership appears to be warranted and justified based on economic and market conditions pertinent to dealerships competing in the relevant market area, including anticipated changes; and
11. The volume of registrations and service business transacted by the existing dealership and in which would be the relevant market area of the proposed dealership.
This Code section shall not apply:
1. To the addition of a new dealership at a location which is within a three-mile radius of a former dealership of the same line make which has been closed for less than two years;
2. To the relocation of an existing dealership to a new location which is further away from the protesting dealer's location than the relocated dealer's prior location; or
3. To the relocation of an existing dealership to a new location which is within a three-mile radius of such dealership's current location and it has been at such current location at least ten years.

(Code 1981, §10-1-664, enacted by Ga. L. 1999, p. 1194, § 10; Ga. L. 2000, p. 1589, § 3.)

Code Commission notes.

- Pursuant to Code Section 28-9-5, in 1999, "line make" was substituted for "line-make" in paragraph (b)(5).

Editor's notes.

- Ga. L. 2000, p. 1589, § 16, not codified by the General Assembly, provides that the amendment to this Code section is applicable with respect to notices delivered on or after July 1, 2000.

JUDICIAL DECISIONS

Dealership.

- Franchisee did not have standing to seek to enjoin the establishment of a competing dealership within eight miles of the franchisee's service center because: (1) for purposes of the statute, the franchisee's relevant market area was the area within eight miles of an existing dealership; (2) "dealership" meant the "person" of the corporate franchisee; (3) the franchisee's principal place of business and registered office were at a location other than the service center, which location was more than eight miles from the new dealership's proposed location; so, (4) under the plain language of O.C.G.A. § 10-1-664(b), the service center was not, by definition, an existing dealership in whose relevant market area the franchisor intended to establish a new dealership since, under O.C.G.A. § 10-1-622(1) and (2)(A), "dealership" or "dealer" was defined as the "person," which in this case was a corporation, and a corporate "dealership" or "dealer" was not defined according to the corporation's facilities. WMW, Inc. v. Am. Honda Motor Co., 311 Ga. App. 1, 714 S.E.2d 689 (2011).

Anti-encroachment provision construed.

- Under the Georgia Motor Vehicle Franchise Practices Act, O.C.G.A. § 10-1-620 et seq., a corporate dealership's relevant market area, the area for which the dealer has standing to resist competition by a new or relocated dealership of the same franchisor, is the area located within an eight-mile radius of where a dealer qualified as such because the dealer is engaged in the business of selling new motor vehicles, sells those vehicles, or when a dealer qualified as such because the dealer engages exclusively in the repair of motor vehicles. WMW, Inc. v. Am. Honda Motor Co., 291 Ga. 683, 733 S.E.2d 269 (2012).

Cited in Ga. Oilmen's Ass'n v. Ga. Dep't of Revenue, 261 Ga. App. 393, 582 S.E.2d 549 (2003).

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