Chicago Business Litigation Lawyer Blog
Dealers invest millions of dollars in facilities, inventory, people, and goodwill. Yet when a manufacturer pushes back on a transfer, a succession plan, or even the renewal of a franchise, it can feel like the factory is the real owner and the dealer is just renting the right to do business.
Illinois law does not accept that premise. The Illinois Motor Vehicle Franchise Act sets rules for how manufacturers can behave, and it gives dealers procedural and substantive protections that can be the difference between keeping your store and losing it. The Act is not a magic shield, but it is a set of tools. The dealer who understands those tools is not negotiating from a position of weakness.
Transfer approval is not supposed to be a black box. In a sale or ownership transfer, the manufacturer often acts like it holds absolute veto power. Illinois law pushes back. The Act contemplates a process and timelines for approval decisions once a dealer submits the manufacturer’s completed application materials along with the agreements for the proposed transaction. If a manufacturer refuses approval, it is expected to state the grounds and the criteria used to evaluate the proposed transferee, and the dealer has a path to protest. Just as importantly, a timely protest can stop the manufacturer from treating a refusal as final while the dispute is still being heard.