the burden of proof. The allocation of the burden of proof in Board proceedings is significant, because when a party has the burden of proof, it means that party must convince the administrative law judge that the evidence it has produced outweighs the evidence presented by the opposing party. The party with the burden of proof usually presents its case first in the Board proceeding. Termination When a dealer receives a written notice of termination (or a refusal to continue an existing franchise agreement), filing a termination protest automatically stays the termination, allowing the dealer to continue operating while the protest is pending. Most termination protests need to be filed within 30 days of the dealer’s receipt of the notice of termination, but some need to be filed within 10 days (e.g., insolvency, failure to operate during regular hours or transfer of ownership interest without consent). It is essential to promptly consult with competent counsel upon receipt of a notice of termination. The franchisor has the burden of proof to establish good cause for the termination. If the franchisor cannot do so, the Board will not permit the termination. Modification of Franchise This protest allows dealers to halt and challenge a proposed modification or replacement of a franchise agreement if it would substantially affect the franchisee’s sales, service obligations, or investment. This protest must be filed within 30 days from the dealer’s receipt of notice, or 30 days after the end of any appeal procedure provided by the franchisor. The dealer has the burden of proving a modification to the franchise agreement. Once it does, the burden shifts to the franchisor to show good cause for the proposed change. The franchisor cannot enact the change unless and until the protest is resolved in its favor. Additional or Relocated Franchise Within a Ten-Mile Radius Dealers can challenge the establishment of a new dealership or the relocation of an existing dealership of the same line-make within a ten-mile radius. The manufacturer or distributor must first give written notice to the Board and to dealerships of the same line-make within the relevant marketing area of the proposed new or relocating dealership. This protest must be filed within 20 days of the dealer’s receipt of notice, or 20 days after the end of any appeal procedure provided by the franchisor. The protesting dealer has the burden of proving that there is reasonable cause to prevent the establishment of the additional dealer or relocation. Additional or Relocated Satellite Warranty Facility Within a Two‑Mile Radius Dealers can challenge the establishment of an additional satellite warranty facility or the relocation of an existing satellite warranty facility within two miles of any dealership of the same line-make. The manufacturer or distributor must first give written notice to the Board and to dealerships of the same line-make within two miles of the proposed location. This also must be filed within 20 days from the dealer’s receipt of notice or after the end of any appeal procedure with the franchisor. The protesting dealer has the burden of proving that there is reasonable cause to prevent the establishment of the additional or relocated satellite warranty facility. Retail Warranty Compensation Law Compliance This protest allows a dealer to establish or modify their retail labor rate and/or retail parts rate by Board declaration if the franchisor fails to comply with the statutory methodology or if the dealer disputes the manufacturer’s proposed adjusted rates. If successful, the Board determines the correct rates, and the dealer may be entitled to retroactive payment. The franchisor has the burden of proof. Reduction in Warranty Reimbursement This protest allows the dealer to challenge a reduction in time or compensation applicable to specific parts or labor operations. The protest needs to be filed within six months following the franchisee’s receipt of notice of the reduction. The franchisor has the burden of proof to establish the reasonableness, adequacy and fairness of the reduction. Improper Disapproval of Warranty Claim The Board determines if the franchisor followed proper timelines and limited disapproval reasons (e.g., false claim, improper repair or material noncompliance), offering the dealer a path to overturn wrongful denials. The franchisor has the burden of proof. The dealer must file the protest within six months after receiving the written disapproval, and the franchisor bears the burden of proof. Improper Chargeback of Warranty Claim After Audit This is one of the most common protests. The franchisor may conduct audits of dealer warranty records on a reasonable basis and for a period of nine months following the payment of a claim. If the franchisor disapproves of a previously approved claim following an audit, within 30 days after the audit, the franchisor shall provide the dealer with a written notice of disapproval stating the specific grounds upon which the claim is disapproved. The dealer shall have at least 30 days thereafter to appeal and respond to any disapproval with additional supporting documentation or information that rebuts the disapproval. If, after the appeal process, the franchisor issues a final denial of a warranty claim, it must provide the dealer with a written notification of the final denial, and cannot charge the dealer back for 45 days after. If the dealer files a protest before the 45-day period expires, the franchisor is prohibited from charging the dealer until the Board issues a final order on the protest. The Board determines whether the franchisor followed timelines and limited claim disapproval reasons (false claim, ineligible under communicated terms or material noncompliance). The franchisor has the burden of proof. 9
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