When a manufacturer announces a new point or a relocation, the first reaction inside most dealerships is frustration. The second is resignation. The factory says the market can support another store. The decision must already be made. There is no point in fighting it. That reaction is exactly what gets dealers hurt. In Illinois, a proposed additional same-line franchise or a relocation into the relevant market area of an existing dealer is not supposed to be a fait accompli.
The Illinois Motor Vehicle Franchise Act gives dealers a real protest process, and that process has teeth. If a manufacturer wants to grant an additional franchise in the relevant market area of an existing same-line dealer, or relocate an existing dealership within or into that market area, the manufacturer must send notice by certified mail at least 60 days before taking the proposed action. The notice is supposed to state the specific grounds for the proposal, and the dealer has only 30 days from receipt to file a written protest. Those deadlines are unforgiving. A strong case can become a lost case if the store treats the notice like ordinary correspondence.
If the protest is timely filed, the matter does not remain in the manufacturer’s hands. The Act requires a hearing schedule, and the manufacturer bears the burden of proving good cause to allow the additional franchise or relocation. Just as importantly, the manufacturer may not grant the additional franchise or complete the relocation before the hearing process is over and the manufacturer has prevailed. That point gets lost in the panic. A timely protest is not just symbolic. It can stop the move from becoming operational while the dispute is still being decided.
That shifts the leverage in a meaningful way. The dealer does not have to prove that the sky will fall if another point opens. The manufacturer has to prove that the proposed move is justified under the statutory standards. Illinois law directs the Board or arbitrators to consider a detailed list of factors, not just the manufacturer’s business preference. Those factors include whether economic and marketing conditions warrant the move, the retail sales and service business already being transacted in the market over the prior five years compared with the business available, the investments already made by existing dealers, the permanency of those investments, whether the public welfare would be helped or harmed, whether existing dealers are already providing adequate competition and convenient consumer care, whether those dealers have adequate facilities, parts, and qualified personnel, and the effect the new point or relocation would have on existing same-line dealers.
One statutory phrase is especially important. Illinois says good cause is not shown solely by a desire for further market penetration. That matters because “we want more penetration” is often the manufacturer’s real theme, even when the written notice uses more polished language. If existing dealers are serving customers well, carrying the capital burden, staffing the service department, and covering the market responsibly, a raw desire to sell more metal by putting another roof nearby is not supposed to end the analysis.
In practice, these protests are won or lost with facts. Dealers should immediately assemble a package that tells the market story better than the factory’s notice does. That usually means five years of sales and service history, facility investment records, staffing levels, parts and service capacity, appointment lead times, customer draw patterns, and evidence of the store’s permanency in the market. It may also mean showing the risks the factory’s plan creates: weakened fixed-operations absorption, unnecessary duplication of facilities, reduced investment incentives, and harm to service convenience if the move destabilizes the stores already serving the area.
The public-interest piece is often underused. Manufacturers like to frame add-point decisions as pro-consumer. Sometimes that argument is right. Sometimes it is shallow. An additional point does not automatically improve the customer experience. If the existing dealers already provide strong service access, ample parts inventory, trained technicians, and convenient locations, the manufacturer should be required to explain what real consumer problem the new point solves. Price competition alone does not answer every statutory factor, especially if the market is already being served adequately and the proposed move mainly redistributes volume.
Dealers should also remember that not every proposed move triggers the same protest rights. The Act contains exceptions. For example, a successor dealer at the same location, or within 2 miles of that location, is treated differently, and some relocations within a dealer’s current market area may be carved out depending on the facts. That is why the right first move is not emotional. It is analytical. Measure the geography. Study the notice. Confirm whether the proposed action actually falls inside the protest framework before either surrendering or escalating.
Another common mistake is ignoring the manufacturer’s stated grounds. The notice must set out the specific grounds for the proposed additional franchise or relocation. That language matters because it tells the dealer what case the manufacturer is trying to build. If the factory says the area lacks convenient consumer care, the dealer should gather the service records and appointment data that address that claim. If the factory says economic growth justifies another point, the dealer should scrutinize the actual market data. The goal is not to complain in general terms. The goal is to rebut the manufacturer on the factors the statute requires the decision-maker to examine.
There is also a broader business lesson here. Dealers spend enormous sums on land, buildings, tools, staffing, training, and customer goodwill. Those investments are made with the expectation that the franchise relationship is governed by law, not by surprise. A same-line add-point or relocation can dilute all of that in a hurry. Illinois recognizes that reality. The protest process exists because the State has decided that these decisions affect not only private contracts, but also competition, consumer care, and the value of dealer investment.
Owners in many franchise systems make the same error when a franchisor redraws the map: they treat the announcement as final. In Illinois dealer law, it often is not. It is often just the opening move. The store that reacts quickly, preserves the deadline, and builds the factual record is in a far better position than the store that waits for the new sign to go up and then complains that the fight was unwinnable.
At DiTommaso Lubin, P.C., we represent dealers in add-point protests, relocation disputes, and other manufacturer actions that threaten market share, fixed-operations economics, and long-term franchise value. If your dealership has received notice of a proposed same-line point or relocation, the most important decision may be what you do in the first 30 days. Call DiTommaso Lubin, P.C. at 630-333-0333 for a free consultation, or contact us online. James DiTommaso can help you with a manufacturer dispute and guide you through the complex process.