Texas Codes

Tex. Occ. Code § 2301.453 (2026)

Termination Or Discontinuance Of Franchise

✓ current as of May 2026

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Sec. 2301.453. TERMINATION OR DISCONTINUANCE OF FRANCHISE. (a) Notwithstanding the terms of any franchise, a manufacturer, distributor, or representative may not terminate or discontinue a franchise with a franchised dealer or directly or indirectly force or attempt to force a franchised dealer to relocate or discontinue a line-make or parts or products related to that line-make unless the manufacturer, distributor, or representative provides notice of the termination or discontinuance as required by Subsection (c) and:

(1) the manufacturer, distributor, or representative receives the dealer's informed written consent;

(2) the appropriate time for the dealer to file a protest under Subsection (e) has expired; or

(3) the board makes a determination of good cause under Subsection (g).

(b) A termination or discontinuance to which this section applies includes a termination or discontinuance of a franchise that results from a change by a manufacturer, distributor, or representative of its:

(1) distributor;

(2) method of distribution of its products in this state; or

(3) business structure or ownership.

(c) Except as provided by Subsection (d), the manufacturer, distributor, or representative must provide written notice by registered or certified mail to the dealer and the board stating the specific grounds for the termination or discontinuance. The notice must:

(1) be received not later than the 60th day before the effective date of the termination or discontinuance; and

(2) contain on its first page a conspicuous statement that reads: "NOTICE TO DEALER: YOU MAY BE ENTITLED TO FILE A PROTEST WITH THE TEXAS DEPARTMENT OF MOTOR VEHICLES IN AUSTIN, TEXAS, AND HAVE A HEARING IN WHICH YOU MAY PROTEST THE PROPOSED TERMINATION OR DISCONTINUANCE OF YOUR FRANCHISE UNDER THE TERMS OF CHAPTER 2301, OCCUPATIONS CODE, IF YOU OPPOSE THIS ACTION."

(d) Notice may be provided not later than the 15th day before the effective date of termination or discontinuance if a licensed dealer fails to conduct its customary sales and service operations during its customary business hours for seven consecutive business days. This subsection does not apply if the failure is caused by:

(1) an act of God;

(2) a work stoppage or delay because of a strike or labor dispute;

(3) an order of the board; or

(4) another cause beyond the control of the dealer.

(e) A franchised dealer may file a protest with the board of the termination or discontinuance not later than the latter of:

(1) the 60th day after the date of the receipt of the notice of termination or discontinuance; or

(2) the time specified in the notice.

(f) After a timely protest is filed under Subsection (e), the board shall notify the party seeking the termination or discontinuance that:

(1) a timely protest has been filed;

(2) a hearing is required under this chapter; and

(3) the party may not terminate or discontinue the franchise until the board issues its final order or decision.

(g) After a hearing, the board shall determine whether the party seeking the termination or discontinuance has established by a preponderance of the evidence that there is good cause for the proposed termination or discontinuance.

(h) If a franchise is terminated or discontinued, the manufacturer, distributor, or representative shall establish another franchise in the same line-make within a reasonable time unless it is shown to the board by a preponderance of the evidence that the community or trade area cannot reasonably support such a dealership. If this showing is made, a license may not be issued for a franchised dealer in the same area until a change in circumstances is established.

(i) A manufacturer that changes its distributor or the method of distribution of its products in this state in a manner that results in unlawful termination or discontinuance of a franchise without good cause may not directly or indirectly distribute its products in this state.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 5, eff. June 1, 2003. Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 14A.614, eff. Sept. 1, 2003.

Amended by:

Acts 2021, 87th Leg., R.S., Ch. 276 (H.B. 3514), Sec. 3, eff. September 1, 2021.

Notes of Decisions

Cited in 22 cases (2 in the last 5 years), 2005–2025 · leading case: Buddy Gregg Motor Homes, Inc. v. Motor Veh. Bd. of the Texas Dep't of Transp., 179 S.W.3d 589 (Tex. App. 2005).

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Buddy Gregg Motor Homes, Inc. v. Motor Veh. Bd. of the Texas Dep't of Transp., 179 S.W.3d 589 (Tex. App. 2005). · cites it 10× “7 See Tex. Occ.Code Ann. § 2301.453. BGMH asserts that, after realizing Liberty had allegedly terminated the agreement on December 13, it invoked its post- *606 termination right to demand that Liberty-repurchase BGMH’s inventory to avoid being left with inventory it could not…”

Meyer v. Wmco-gp, LLC, 211 S.W.3d 302 (Tex. 2006). “458, which makes it unlawful for a motor vehicle manufacturer to fail to give effect to or attempt to prevent the sale or transfer of a dealer, dealership or franchise except in certain circumstances, and art.”

Freightliner Corp. v. Motor Veh. Bd. of Texas Dep't of Transp., 255 S.W.3d 356 (Tex. App. 2008). “, Tex. Occ.Code Ann. § 2301.453(h) (establishment of new franchise), § 2301.”

Bray v. Tejas Toyota, Inc., 363 S.W.3d 777 (Tex. App. 2012). “See Tex. Occ.Code Ann. §§ 2301.453 (West 2004) (providing that, notwithstanding any contract provisions to contrary, franchise agreement cannot be terminated absent nonce and good cause); .”

Mercedes-Benz United States, LLC v. Carduco, Inc., 562 S.W.3d 451 (Tex. App. 2016). “Tex. Occ. Code Ann. § 2301.453 (West, Westlaw through 2015 R.”

Sterling Truck Corp. v. Motor Veh. Bd. of Texas Dep't of Transp., 255 S.W.3d 368 (Tex. App. 2008). · cites it 3× “Compare Tex. Occ.Code Ann. § 2301.453 (good cause), with id.”

Buddy Gregg Motor Homes, Inc.//Cross-Appellant, Liberty Coach, Inc. v. Motor Veh. Bd. of the Texas Dep't of Transp. & Liberty Coach, Inc.//Cross-Appellee, Buddy Gregg Motor Homes, Inc. (Tex. App. 2005). · cites it 12× “See Tex. Occ. Code Ann. §§ 2301.453 (c) (specifying termination requirements), .”

Buddy Gregg Motor Homes, Inc.//Cross-Appellant, Liberty Coach, Inc. v. Motor Veh. Bd. of the Texas Dep't of Transp. & Liberty Coach, Inc.//Cross-Appellee, Buddy Gregg Motor Homes, Inc. (Tex. App. 2005). · cites it 11× “Tex. Occ. Code Ann. § 2301.453 (c), (d) (West 2004).”

Subaru of Am., Inc. v. Bd. of the Texas Dep't of Motor Vehs.; Daniel Avitia, in His Off. Capacity as Exec. Dir. of the Texas Dep't of Motor Vehs.; & McAllen Jeep, Inc. D/B/A Bert Ogden Subaru (Tex. App. 2025). · cites it 4× “See Tex. Occ. Code § 2301.453(a). After receiving Subaru’s notice of termination, Bert Ogden filed a protest with the Board of the Texas Department of Motor Vehicles (the Board).”

Ultimate Ford, Inc., D/B/A Ultimate Ford Giddings & Weatherby Ford, Inc. D/B/A Ultimate Ford v. Motor Veh. Div. of the Texas Dep't of Transp. & Ford Motor Co., Inc. (Tex. App. 2010). · cites it 6× “Tex. Occ. Code Ann. § 2301.453 (West 2004).”

Nissan North Am., Inc. v. Texas Dep't of Motor Vehs. (Tex. App. 2019). · cites it 3× “3 TEX. OCC. CODE ANN. § 2301.453(a). If the dealer files a protest within the required time, a statutory stay is entered, preventing the parties from committing any act or omission that would affect a legal right, duty, or privilege of any party before the Board, and the Board…”

Show all 22 citing cases →

— Tex. Occ. Code § 2301.453(a) — 3 cases

Sterling Truck Corp. v. Motor Veh. Bd. of Texas Dep't of Transp., 255 S.W.3d 368 (Tex. App. 2008). “Compare Tex. Occ.Code Ann. § 2301.453 (good cause), with id.”

Subaru of Am., Inc. v. Bd. of the Texas Dep't of Motor Vehs.; Daniel Avitia, in His Off. Capacity as Exec. Dir. of the Texas Dep't of Motor Vehs.; & McAllen Jeep, Inc. D/B/A Bert Ogden Subaru (Tex. App. 2025). “See Tex. Occ. Code § 2301.453(a). After receiving Subaru’s notice of termination, Bert Ogden filed a protest with the Board of the Texas Department of Motor Vehicles (the Board).”

Nissan North Am., Inc. v. Texas Dep't of Motor Vehs. (Tex. App. 2019). “3 TEX. OCC. CODE ANN. § 2301.453(a). If the dealer files a protest within the required time, a statutory stay is entered, preventing the parties from committing any act or omission that would affect a legal right, duty, or privilege of any party before the Board, and the Board…”

— Tex. Occ. Code § 2301.453(a)(1) — 1 case

All Star Imports, Inc. D/B/A World Car Mazda North// Mazda Motor of North Am., Inc. A/K/A Mazda Motor of Am., Inc. v. Bd. of the Texas Dep't of Motor Vehs., & Mazda Motor of North Am., Inc. A/K/A Mazda Motor of Am., Inc.// Cross-Appellee, All Star Imports, Inc. D/B/A World Car Mazda North (Tex. App. 2025).

— Tex. Occ. Code § 2301.453(a)(3) — 1 case

Subaru of Am., Inc. v. Bd. of the Texas Dep't of Motor Vehs.; Daniel Avitia, in His Off. Capacity as Exec. Dir. of the Texas Dep't of Motor Vehs.; & McAllen Jeep, Inc. D/B/A Bert Ogden Subaru (Tex. App. 2025). “See Tex. Occ. Code § 2301.453(a). After receiving Subaru’s notice of termination, Bert Ogden filed a protest with the Board of the Texas Department of Motor Vehicles (the Board).”

— Tex. Occ. Code § 2301.453(c) — 2 cases

Buddy Gregg Motor Homes, Inc. v. Motor Veh. Bd. of the Texas Dep't of Transp., 179 S.W.3d 589 (Tex. App. 2005). “7 See Tex. Occ.Code Ann. § 2301.453. BGMH asserts that, after realizing Liberty had allegedly terminated the agreement on December 13, it invoked its post- *606 termination right to demand that Liberty-repurchase BGMH’s inventory to avoid being left with inventory it could not…”

— Tex. Occ. Code § 2301.453(e) — 2 cases

— Tex. Occ. Code § 2301.453(e)(1) — 1 case

— Tex. Occ. Code § 2301.453(e)(f)(g) — 1 case

in the Matter of the Est. of Richard C. Poe (Tex. App. 2019).

— Tex. Occ. Code § 2301.453(g) — 2 cases

Sterling Truck Corp. v. Motor Veh. Bd. of Texas Dep't of Transp., 255 S.W.3d 368 (Tex. App. 2008). “Compare Tex. Occ.Code Ann. § 2301.453 (good cause), with id.”

Subaru of Am., Inc. v. Bd. of the Texas Dep't of Motor Vehs.; Daniel Avitia, in His Off. Capacity as Exec. Dir. of the Texas Dep't of Motor Vehs.; & McAllen Jeep, Inc. D/B/A Bert Ogden Subaru (Tex. App. 2025). “See Tex. Occ. Code § 2301.453(a). After receiving Subaru’s notice of termination, Bert Ogden filed a protest with the Board of the Texas Department of Motor Vehicles (the Board).”

— Tex. Occ. Code § 2301.453(h) — 1 case

Freightliner Corp. v. Motor Veh. Bd. of Texas Dep't of Transp., 255 S.W.3d 356 (Tex. App. 2008). “, Tex. Occ.Code Ann. § 2301.453(h) (establishment of new franchise), § 2301.”

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