13-14-206 - Site-control agreements.
13-14-206. Site-control agreements.
(1) A site-control agreement entered into on or after May 11, 2010:
(a) may be voluntarily terminated by a franchisee, subject to Subsection (2)(a); and
(b) terminates immediately upon:
(i) a franchisor's sale, assignment, or other transfer of the right to manufacture ordistribute the line-make of vehicles covered by the franchisee's franchise;
(ii) a franchisor's ceasing to manufacture or distribute the line-make of vehicles coveredby the franchisee's franchise;
(iii) a franchisor's termination of a franchisee's franchise without cause and against thefranchisee's will; or
(iv) the failure of the franchisor or its affiliate to exercise a right of first refusal topurchase the assets or ownership of the franchisee's business when given the opportunity to do sounder the franchise or other agreement, subject to the repayment requirements of Subsection (2)if the right of first refusal arises because of the voluntary action of the franchisee.
(2) (a) If a franchisee voluntarily terminates a site-control agreement after the franchisorhas paid and the franchisee or other recipient has accepted additional specified cashconsideration, the site-control agreement remains valid only until the franchisee or other recipientsatisfies the repayment terms specified in Subsection (2)(b).
(b) (i) If the franchisor's additional specified cash consideration was used for theconstruction of a building or improvement on the property that is the subject of the site-controlagreement, the amount of the repayment under Subsection (2)(a):
(A) is based on any repayment terms specified in the site-control agreement, if the partiesto the site-control agreement have willingly agreed to the terms; and
(B) may not exceed the market value of the portion of the building or improvementconstructed with the additional specified cash consideration paid by the franchisor, after allowingfor depreciation based on a market-based depreciation schedule, as determined by an independentappraiser at the request of the franchisee or other recipient.
(ii) If the franchisor's additional specified cash consideration was not used forconstruction of a building or improvement on the property that is the subject of the site-controlagreement, the amount of the repayment under Subsection (2)(a) is an equitable portion of thecash consideration, as determined under any terms specified in the site-control agreement for theequitable repayment following a franchisee's voluntary termination of the agreement.
(c) Immediately upon the repayment under Subsection (2)(b):
(i) the site-control agreement is terminated; and
(ii) the franchisor or other party that is the beneficiary under the site-control agreementshall prepare and deliver to the franchisee a recordable notice of termination of:
(A) the site-control agreement; and
(B) any lien or encumbrance arising because of the site-control agreement and previouslyrecorded against the property that is the subject of the site-control agreement.
Enacted by Chapter 33, 2010 General Session