§1270.16.  Succession; right of first refusal

A.  The terms of the franchise notwithstanding, any motorcycle or all-terrain vehicle dealer may appoint by will, or other written instrument, a designated successor to succeed in the ownership interest of the motorcycle or all-terrain vehicle dealer in the dealership upon the death or incapacity of the motorcycle or all-terrain vehicle dealer.

B.  Unless good cause exists for refusal to honor the succession on the part of the manufacturer or distributor, any designated successor of a deceased or incapacitated motorcycle or all-terrain vehicle dealer of a dealership may succeed to the ownership of the dealership under the existing franchise if:

(1)  The designated successor gives the manufacturer or distributor written notice of his intention to succeed to the ownership of the motorcycle or all-terrain vehicle dealer within sixty days of the motorcycle or all-terrain vehicle dealer's death or incapacity.

(2)  The designated successor agrees to be bound by all the terms and conditions of the franchise.

C.  The manufacturer or distributor may request, and the designated successor shall provide, promptly upon such request, personal and financial data reasonably necessary to determine whether the succession should be honored.

D.  If a manufacturer or distributor believes that good cause exists for refusing to honor the succession of a deceased or incapacitated motorcycle or all-terrain vehicle dealer, the manufacturer or distributor may, not more than sixty days following receipt of notice of the designated successor's intent to succeed and receipt of such personal or financial data, serve upon the designated successor notice of its refusal to honor the succession and of its intent to discontinue the existing franchise with the motorcycle or all-terrain vehicle dealer not earlier than six months from the date such notice is served.

E.  The notice must state the specific grounds for the refusal to honor the succession.

F.  If notice of refusal and discontinuance is not timely served upon the designated successor, the franchise shall continue in effect subject to termination only as otherwise permitted by this Chapter.

G.  In determining whether good cause for the refusal to honor the succession exists, the manufacturer or distributor has the burden of proving that the designated successor is not of good moral character or does not otherwise meet the manufacturer's or distributor's reasonable standards as a franchisee.

H.  If a manufacturer or distributor refuses to honor the succession to the ownership interest of a deceased or incapacitated owner for good cause, then and in such event:

(1)  The manufacturer or distributor shall allow the designated successor a reasonable period of time which shall not be less than six months in which to consummate a sale of the dealership. Any such sale shall be subject to R.S. 32:1270.11(1)(c).

(2)  Upon termination of the franchise pursuant to such refusal, the provisions of R.S. 32:1270.17 shall apply.

Acts 2012, No. 326, §1.