Oregon Revised Statutes Chapter 650 § 650.145 — Compensation due dealer upon termination of franchise

Compensation due dealer upon termination of franchise. (1) As used in subsection (2) of this section, “fair and reasonable compensation” means the amount a dealer originally paid for vehicles minus any incentive payments, model close-out allowances or any other programs that apply to the vehicles. (2) A manufacturer, distributor or importer that terminates, cancels, fails to renew or discontinues a franchise shall pay or allow a dealer fair and reasonable compensation for: (a) All new vehicles manufactured in the current calendar year and any subsequent calendar year in the motor vehicle inventory the dealer purchased from the manufacturer, distributor or importer that were not materially altered, substantially damaged or driven for more than 300 miles; (b) All new vehicles in the motor vehicle inventory that were not materially altered or substantially damaged, if the vehicles: (A) Have a gross vehicle weight rating of less than 8,500 pounds and were: (i) Driven for not more than 300 miles; (ii) Purchased directly from the manufacturer, distributor or importer within one year of the effective date of the termination, cancellation, nonrenewal or discontinuance; and (iii) Paid for or drafted on the dealer’s financing source; or (B) Have a gross vehicle weight rating of 8,500 pounds or more and were: (i) Driven for not more than 3,500 miles; (ii) Purchased directly from the manufacturer, distributor or importer within one year of the effective date of the termination, cancellation, nonrenewal or discontinuance; and (iii) Paid for or drafted on the dealer’s financing source; (c) Supplies and parts inventory that the dealer purchased from the manufacturer, distributor or importer and that are listed in the manufacturer’s, distributor’s or importer’s current parts catalog; (d) Equipment, furnishings and signs that the manufacturer, distributor or importer required the dealer to purchase and that were not materially altered, or substantially damaged or depreciated by more than 50 percent of the original value; (e) Special tools required by the manufacturer that the dealer purchased from the manufacturer, distributor or importer within three years of the date of termination, cancellation, nonrenewal or discontinuance and that were not materially altered, or substantially damaged or depreciated by more than 50 percent of the original value; and (f) The lesser of one year’s lease payments or the reasonable amount remaining due on a lease or contract for a management computer system that the manufacturer, distributor or importer required the dealer to use, if the dealer will no longer use the management computer system because the manufacturer, distributor or importer terminated, canceled, failed to renew or discontinued the dealer’s franchise. (3) This section does not modify a manufacturer’s, distributor’s or importer’s contractual right of setoff. (4) In addition to any other payments required under this section, a manufacturer, distributor or importer, after terminating, canceling, failing to renew or discontinuing a dealer’s franchise, shall pay to the dealer a sum equal to the current, fair rental value of the dealer’s established place of business for a period of one year after the effective date of termination, cancellation, nonrenewal or discontinuance, or a sum equal to the current, fair rental value for the remaining period of the dealer’s lease, whichever is less. (5) Subsection (4) of this section applies only to the extent that a dealer uses the dealer’s established place of business to perform sales and service obligations under the manufacturer’s, distributor’s or importer’s franchise agreement. (6) A manufacturer, distributor or importer need not make the payment described in subsection (4) of this section if the dealer terminates, cancels, fails to renew or discontinues the franchise. (7) This section does not relieve a new motor vehicle dealer, lessor or other owner of an established place of business from an obligation to mitigate damages. (8) If a manufacturer, distributor or importer terminates, cancels, fails to renew or discontinues a dealer’s franchise because the manufacturer, distributor or importer has terminated a line-make, the manufacturer, distributor or importer shall compensate the dealer for expenses the dealer incurred within two years before the termination date of the line-make to finish constructing, altering or remodeling the dealer’s facility to meet the manufacturer’s, distributor’s or importer’s requirements for participating in an incentive program. For the purposes of this subsection: (a) A dealer finishes constructing, altering or remodeling the dealer’s facility when the manufacturer, distributor or importer gives final written approval of the construction, alteration or remodeling or the dealer receives a certificate of occupancy, whichever is later; and (b) Expenses the dealer incurred to finish cons