SB267 Alabama 2010 Session

Updated Feb 25, 2026

Summary

Primary Sponsor: Wendell Mitchell
Democrat
Session: Regular Session 2010
Title: Motor Vehicle Franchise Act, substantially altered, Secs. 8-20-3, 8-20-4, 8-20-5, 8-20-7 am'd. (2010-20187)
Summary: SB267 rewrites Alabama's Motor Vehicle Franchise Act to require fair treatment of dealers, redefine terms, and set clearer buyback, compensation, and termination rules for franchise relationships.
What This Bill Does
It updates definitions used in franchise law, broadening what counts as a new vehicle and how line makes are handled. It adds a set of unfair and deceptive practices by manufacturers and requires more restraint in actions like coercion, discrimination, and unreasonable franchise changes. It requires manufacturers to repurchase certain assets when a franchise ends, including inventory, parts, tools, signs, and goodwill, and to cover upgrades or alterations. It strengthens termination and transfer rules, adds for audits of incentive programs, and sets procedures for warranties and service compensation.

Who It Affects
New motor vehicle dealers in Alabama, who would gain repurchase rights, fair compensation, and clearer protections in terminations, transfers, and expansions.
Motor vehicle manufacturers, distributors, and wholesalers doing business in Alabama, who would face new duties, notice requirements, and oversight to ensure fair dealing with dealers.

Key Provisions
Defines and expands key terms, including new vehicle, line make, net cost, and relevant market area, to align with franchise law.
Adds a list of unfair and deceptive trade practices that manufacturers and their reps may not commit, such as coercion, discriminatory allocations, and unreasonable contract changes.
Requires the manufacturer to repurchase at termination: new vehicles inventory, parts, equipment, signs, and goodwill; paying net cost or fair market value; plus for facility upgrades when applicable.
Requires manufacturer to pay for upgrades or alterations and goodwill; provides for payment of goodwill value when a line is eliminated or a franchise ends.
Allows operation of more than one franchise at a single facility and places limits on unreasonable facility requirements and relocation.
Provides for audits of dealer incentives and ensures timely, auditable payments; allows clawbacks for fraudulent incentive claims with defined time limits.
Strengthens transfer rights and procedures: right of first refusal with safeguards, notice timelines, cost-sharing for transfer-related expenses, and court review to determine reasonableness of transfers.
Prevents unreasonable establishment of additional franchises within a market area; requires notice before granting new franchises and allows courts to review reasonableness.
Sets termination and nonrenewal procedures with good cause standards, notice requirements, and dealer remedies preserved pending court decisions.
Waranty service compensation: requires a schedule of compensation for parts and labor, timely payments, and audit rights; ensures reasonable compensation and adherence to recall timelines.
Applies to existing and future dealer agreements; supersedes conflicting terms and prohibits undermining terms through choice of law clauses; defines effective date and applicability.

AI-generated summary using openai/gpt-5-nano on Feb 25, 2026. May contain errors — refer to the official bill text for accuracy.
Subjects: Motor Vehicles