HB347 Alabama 2010 Session

Updated Feb 27, 2026

High Interest

Summary

Primary Sponsor: Ron Johnson
Republican
Session: Regular Session 2010
Title: Motor Vehicle Franchise Act, definitions, unfair and deceptive trade practices, buy back requirements at termination, cancellation, or nonrenewal for a franchise or dealer agreement extended, compensation provided to dealer by manufacturer as result of discontinuation of a line, Secs. 8-20-3, 8-20-4, 8-20-5, 8-20-7 am'd. (2010-20446)
Summary: A 2010 Alabama law that tightens motor vehicle franchise rules by expanding protections for dealers, clarifying definitions, and requiring manufacturers to compensate dealers and repurchase assets when a franchise line is terminated, canceled, or nonrenewed.
What This Bill Does
The bill broadens key definitions and adds unfair/deceptive practices to the Motor Vehicle Franchise Act. It strengthens termination and industry reorganization rules, including advance notice and good-faith requirements, and creates procedures for evaluating new dealer appointments and market-area changes. It requires manufacturers to repurchase inventory, parts, tools, equipment, signs, and upgrades, and to compensate dealers for the value of the franchise when a line is ceased, including ongoing compensation duties during transition. It also establishes dealer audit rights for incentive payments, sets timelines for compensation and warranty reimbursements, and provides processes to resolve disputes related to these protections.

Who It Affects
Motor vehicle dealers in Alabama, who gain expanded rights to be repaid for inventory, equipment, and franchise value upon termination or line cessation, and who are protected from certain unfair practices.
Motor vehicle manufacturers, distributors, wholesalers, and their local branches/representatives, who gain new obligations and oversight, including enhanced notice, fair compensation, audit rights, and limits on unreasonable actions related to terminations, line changes, and industry reorganizations.

Key Provisions
Expanded definitions for terms like 'new vehicle' and 'line make' and broader list of practices considered unfair or deceptive.
Stronger termination, nonrenewal, and industry reorganization rules, including required good faith and defined notice procedures for changes in franchises or market areas.
Requirement to repurchase: dealers must be paid for new vehicle inventory, parts, supplies, equipment, signs, and upgrades when a line is terminated, canceled, or ceased, with specified valuation methods.
Compensation for the value of the franchise and for facilities or improvements, including timelines for payment and provisions for sale or relocation of dealership assets.
Right of first refusal for transfers, with detailed conditions, notice requirements, expense sharing, and required compensation to the dealer if a transfer is blocked or altered.
Rules governing the addition of new franchise locations within a market area, with court oversight to determine reasonableness and provisions for speedy trials.
Warranty service compensation framework: schedules, reasonable time allowances, audit rights, and protections against underpayment for warranty work and recalls.
Uniform applicability: the act applies to existing agreements, renewals, and amendments and supersedes inconsistent terms in other contracts.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.
Subjects: Motor Vehicles