Chapter 218

218.0116(7)(a) (a)

218.0116(7)(a)1. 1. A manufacturer, importer or distributor who seeks to enter into a franchise agreement establishing or relocating a motor vehicle dealership, parts outlet or service outlet within the relevant market area of an existing enfranchised dealer of the line make of motor vehicle shall first notify, in writing, the department of transportation and that existing enfranchised dealer of its intention to establish or relocate a dealership or outlet. Within 30 days of receiving the notice or within 30 days after the end of any appeal procedure provided by the manufacturer, importer or distributor, whichever is later, any existing enfranchised dealer of the same line make to whom the manufacturer, importer or distributor is required to give notice under this paragraph may file with the department of transportation and the division of hearings and appeals a complaint protesting the proposed establishment or relocation of the dealership or outlet within the relevant market area of the existing enfranchised dealer.

218.0116(7)(a)2. 2. If a complaint is filed under subd. 1., the department of transportation shall inform the manufacturer, importer or distributor that a timely complaint has been filed, that a hearing is required, and that the proposed franchise agreement may not be entered into until the division of hearings and appeals has held a hearing, nor thereafter, if the division of hearings and appeals determines that there is not good cause for permitting the proposed establishment or relocation of the dealership or outlet. In the event of multiple complaints, hearings shall be consolidated to expedite the disposition of the issue.

218.0116(7)(b) (b) In determining whether good cause exists for permitting the proposed establishment or relocation of a dealership or outlet, the burden of proof for showing good cause shall be on the manufacturer, importer, or distributor, and the division of hearings and appeals shall take into consideration the existing circumstances, including, but not limited to:

218.0116(7)(b)1. 1. The amount of business transacted by existing enfranchised dealers of the line make of motor vehicle when compared with the amount of business available to them.

218.0116(7)(b)2. 2. The permanency of the investment necessarily made and the obligations incurred by existing enfranchised dealers in the performance of their franchise agreements.

218.0116(7)(b)3. 3. The effect on the retail motor vehicle business in the relevant market area.

218.0116(7)(b)4. 4. Whether it is injurious to the public welfare for the proposed dealership or outlet to be established or relocated.

218.0116(7)(b)5. 5. Whether the establishment or relocation of the proposed dealership or outlet would increase competition and therefore be in the public interest.

218.0116(7)(b)6. 6. Whether the existing enfranchised dealers of the line make of motor vehicle are providing adequate consumer care for the motor vehicles of that line make, including the adequacy of motor vehicle service facilities, equipment, supply of parts and qualified personnel.

218.0116(7)(b)7. 7. Whether the existing enfranchised dealers of the line make of motor vehicle are receiving vehicles and parts in quantities promised by the manufacturer, factory branch or distributor and on which promised quantities existing enfranchised dealers based their investment and scope of operations.

218.0116(7)(b)8. 8. The effect the denial of the proposed establishment or relocation would have on the license applicant, dealer or outlet operator who is seeking to establish or relocate a dealership or outlet.

218.0116(7)(c) (c) The decision of the division of hearings and appeals shall be in writing and shall contain findings of fact and a determination of whether there is good cause for not permitting the proposed establishment or relocation of the dealership or outlet. The division of hearings and appeals shall deliver copies of the decision to the parties personally or by registered mail. The decision is final upon its delivery or mailing and no reconsideration or rehearing by the division of hearings and appeals is permitted.

218.0116(7)(d) (d) For purposes of this subsection:

218.0116(7)(d)1d. 1d. “Closed” means the effective date of the termination or expiration of a dealership’s or outlet’s license or franchise, whichever is earlier.

218.0116(7)(d)1h. 1h. The reopening or replacement of a dealership or outlet that has been closed for less than 2 years, at the original location or within 2 miles of the original location by the closest highway route, is not the establishment of a motor vehicle dealership or outlet, unless the location is within 4 miles, by the closest highway route, of another franchised dealer of the same line make and is closer to that dealer than the closed dealership or outlet.

218.0116(7)(d)1m. 1m. The reopening or replacement of a dealership or outlet that has been closed for less than 2 years at a location other than the original location and other than a location within 2 miles of the original location by the closest highway route, but within the area of sales responsibility that had been assigned to the closed dealership or outlet by the manufacturer, importer or distributor is not the establishment of a motor vehicle dealership or outlet, unless the new location is within 6 miles, by the closest highway route, of another franchised dealer of the same line make and is closer to that dealer than the closed dealership or outlet.

218.0116(7)(d)1q. 1q. The reopening or replacement of a dealership or outlet that has been closed for 2 or more years or that is at a location outside of the area of sales responsibility that had been assigned to the closed dealership or outlet by the manufacturer, importer or distributor is the establishment of a dealership or outlet.

218.0116(7)(d)2. 2. The relocation of a dealership or outlet to a location within 2 miles of the existing location by the closest highway route and within the existing area of sales responsibility assigned to that dealership or outlet by the manufacturer, importer or distributor is not the relocation of a dealership or outlet, unless the location is within 4 miles, by the closest highway route, of another franchised dealer of the same line make and is closer to that dealer than the existing location. The relocation of a dealership or outlet to a location other than a location within 2 miles of the existing location, but within the existing area of sales responsibility assigned to that dealership or outlet by the manufacturer, importer or distributor is not the relocation of a dealership or outlet, unless the relocation site is within 6 miles, by the closest highway route, of the location of another enfranchised dealer of the same line make and is closer to that dealer than the existing location. The relocation of a dealership or outlet to a location outside the area of sales responsibility assigned to the dealership or outlet by the manufacturer is the relocation of a dealership or outlet.

218.0116(7)(d)3. 3. The establishment or relocation of a service or parts outlet requires that notice be given under par. (a) to existing enfranchised dealers who are otherwise entitled to receive notice under par. (a) and who are authorized to perform work to rectify product or warranty defects or delivery and preparation obligations on the same line make as the proposed service outlet or to use a trade name, trademark or service mark that is also proposed to be used by the proposed service or parts outlet, except that the establishment or relocation of a service or parts outlet that is owned and operated by a motor vehicle dealership enfranchised by the manufacturer, importer or distributor requires that notice be given only to existing dealers who are otherwise entitled to receive notice under par. (a) and who hold a franchise to sell the same line make as the dealership that will own and operate the proposed service or parts outlet.

218.0116(7)(d)4. 4. A manufacturer’s, importer’s or distributor’s authorization of a fleet owner to perform warranty or delivery and preparation work only on the fleet owner’s own vehicles is not the establishment of a service outlet. In this subdivision:

218.0116(7)(d)4.a. a. “Fleet owner” means a person who owns for its own use or for the use of others 10 or more motor vehicles of the current or preceding model year manufactured or sold by the manufacturer, importer or distributor who is authorizing the warranty work to be performed.

218.0116(7)(d)4.b. b. “Fleet owner” does not include persons engaged in the business of leasing motor vehicles to individual consumers.

218.0116(7)(d)5. 5. The establishment or relocation of a motor vehicle dealership with respect to used motor vehicles under an agreement between the dealer and a manufacturer, importer or distributor is the establishment or relocation of a motor vehicle dealership.

218.0116(8) (8) 

218.0116(8)(a) (a) A manufacturer or distributor may not modify a motor vehicle dealer agreement during the term of the agreement or upon its renewal if the modification substantially and adversely affects the motor vehicle dealer’s rights, obligations, investment or return on investment without giving 60 days written notice of the proposed modification to the motor vehicle dealer unless the modification is required by law, court order or the licensor. Within the 60-day notice period the motor vehicle dealer may file with the department of transportation and the division of hearings and appeals and serve upon the respondent a complaint for a determination of whether there is good cause for permitting the proposed modification. The division of hearings and appeals shall promptly schedule a hearing and decide the matter. Multiple complaints pertaining to the same proposed modification shall be consolidated for hearing. The proposed modification may not take effect pending the determination of the matter.

218.0116(8)(b) (b) In making a determination of whether there is good cause for permitting a proposed modification, the burden of proof shall be on the manufacturer or distributor, except that the burden of proof with regard to the factor set forth in par. (b) 3. shall be on the dealer, and the division of hearings and appeals may consider any relevant factor including:

218.0116(8)(b)1. 1. The reasons for the proposed modification.

218.0116(8)(b)2. 2. Whether the proposed modification is applied to or affects all motor vehicle dealers in a nondiscriminating manner.

218.0116(8)(b)3. 3. The degree to which the proposed modification will have a substantial and adverse effect upon the motor vehicle dealer’s rights, investment, or return on investment.

218.0116(8)(b)4. 4. Whether the proposed modification is in the public interest.

218.0116(8)(b)5. 5. The degree to which the proposed modification is necessary to the orderly and profitable distribution of products by the respondent.

218.0116(8)(b)6. 6. Whether the proposed modification is offset by other modifications beneficial to the motor vehicle dealer.

218.0116(8)(c) (c) The decision of the division of hearings and appeals shall be in writing and shall contain findings of fact and a determination of whether there is good cause for permitting the proposed modification. The division of hearings and appeals shall deliver copies of the decision to the parties personally or by registered mail. The decision is final upon its delivery or mailing and no reconsideration or rehearing by the division of hearings and appeals is permitted.

218.0116(9) (9) Any person in interest aggrieved by a decision of the division of hearings and appeals or an order of the division of banking may have a review of the decision as provided in ch. 227.

218.0116(10) (10) In addition to the licensor’s authority to deny, suspend, or revoke a license under ss. 218.0101 to 218.0163, the division of banking, after public hearing, may issue a special order enjoining any licensee from engaging in any act or practice which is determined by the division of banking to be in violation of any provision of sub. (1), and the division of hearings and appeals may be petitioned to and, after notice and hearing, may issue a special order enjoining a licensee from engaging in any act or practice which the division of hearings and appeals determines to be in violation of any provision of sub. (1).

218.0116 History History: 1999 a. 31 ss. 123 to 187, 284 to 286; 1999 a. 186; 2003 a. 77, 326; 2005 a. 25, 256; 2007 a. 20; 2011 a. 91; 2013 a. 36; 2013 a. 168 s. 21; 2019 a. 4, 67; 2021 a. 240 s. 30; 2023 a. 267.

218.0116 Cross-reference Cross-reference: See also chs. Trans 137, 138, 139, and 140, Wis. adm. code.

218.0116 Annotation “Willful” under s. 218.01 (3) (a) 6. [now sub. (1) (cm)] means intentional. Fraud and malice are not elements. The state need not prove intent to deceive the buyer under s. 218.01 (3) (a) 18. [now sub. (1) (im) 2.]. DOT v. Transportation Commission, 105 Wis. 2d 678, 315 N.W.2d 371 (Ct. App. 1981).

218.0116 Annotation Affirmed. 111 Wis. 2d 80, 330 N.W.2d 159 (1983).

218.0116 Annotation Under s. 218.01 (3) (b) [now sub. (2)], the commissioner may conduct a de novo review of a Department of Transportation decision and may substitute the commissioner’s own judgment for that of the department. DOT v. Office of Commissioner of Transportation, 159 Wis. 2d 271, 463 N.W.2d 870 (Ct. App. 1990).

218.0116 Annotation A manufacturer’s assignment of territory to a dealer is part of their motor vehicle dealer agreement under sub. (8). Racine Harley-Davidson, Inc. v. Division of Hearings & Appeals, 2006 WI 86, 292 Wis. 2d 549, 717 N.W.2d 184, 03-2628.

218.0116 Annotation Perfect performance is not required to effectuate a “cure” under sub. (1) (i) 1. b. The statutory word “cured” encompasses the meaning of “cured” in contract law: the breaching party is to stop the offending conduct and to substantially perform the contract. Only if the breach is not cured to the level of substantial performance may the injured party terminate the contract. This meaning focuses on the performance of the breaching party, rather than on matters beyond the control of the breaching party, such as the conduct of third parties or on the effects of an economic recession. Volvo Trucks North America v. DOT, 2010 WI 15, 323 Wis. 2d 294, 779 N.W.2d 423, 08-1385.

218.0116 Annotation Section 218.01 (3) (a) 11. [now sub. (1) (f)] is applicable to manufacturers. Bob Willow Motors, Inc. v. General Motors Corp., 872 F.2d 788 (1989).

218.0116 Annotation A dealer’s refusal to sell the manufacturer’s products after filing a complaint under s. 218.01 (2) (bd) 2. [now s. 218.0114 (7) (d)] is a violation of that provision, and consequently of s. 218.01 (3) (a) 4. [now sub. (1) (bm)], entitling the manufacturer to treble damages under s. 218.01 (9) (am) [now s. 218.0163]. American Suzuki Motor Corp. v. Bill Kummer, Inc., 65 F.3d 1381 (1995).

218.0116 Annotation Sub. (1) (vm) and (wm) does not define the word “coerce,” but the ordinary meaning is to compel by threat or force, either physically or through economic means. Equating acts that “coerce” with “adverse actions” under sub. (1) (z) would lead to a definition of coerce that is overly broad in some respects and overly narrow in others. Applying the ordinary meaning of the word to this case, the defendant’s automobile dealership incentive program that offered incentives to dealerships that constructed or already had exclusive showrooms was not coercive. Dahl Automotive Onaslaska Inc. v. Ford Motor Co., 588 F. Supp. 3d 929 (2022).

218.0119 218.0119 Changes in places of business to be reported.

218.0119(1) (1) Before changing the location of a place of business or opening a new place of business in a municipality in which authorized to do business, a licensed dealer, distributor, or manufacturer shall apply to the department of transportation for an amended license. The department of transportation shall issue such license without charge.

218.0119(2) (2) Whenever a licensed dealer, distributor, manufacturer or transporter opens a new place of business, the licensee shall promptly report that fact, including the address of the new place of business, to the department of transportation.

218.0119(3) (3) Whenever a licensed dealer, distributor or manufacturer discontinues or disposes of his or her business, that dealer, distributor or manufacturer shall promptly report that fact to the department of transportation and return the license and registration plates issued. Whenever a licensed dealer, distributor or manufacturer discontinues business due to license suspension or revocation, that dealer, distributor or manufacturer shall surrender the licenses and registration plates to the department of transportation for the suspension or revocation period.

218.0119(4) (4) Any dealer, distributor, manufacturer or transporter who fails to comply with the requirements of this section may be required to forfeit not less than $100 nor more than $200.

218.0119 History History: 1999 a. 31 ss. 105 to 109; 2003 a. 215.

218.0119 Cross-reference Cross-reference: See also ch. Trans 138, Wis. adm. code.

218.0121 218.0121 Factory stores.

218.0121(1m) (1m) In this section:

218.0121(1m)(a) (a) “Agent” means a person who is employed by or affiliated with a factory or who directly or through an intermediary is controlled by or under common control of a factory.

218.0121(1m)(b) (b) “Control” means the possession, direct or indirect, of the power to direct or cause the direction of the management or policies of a person, whether through the ownership of voting securities, by contract or otherwise. “Control” does not include the relationship between a factory and a dealership under a basic agreement filed under s. 218.0114 (7) (a) 1.

218.0121(1m)(c) (c) “Dealer operator” means an individual who is vested with the power and authority to operate a dealership.

218.0121(1m)(d) (d) “Dealership” means a person licensed or required to be licensed as a motor vehicle dealer under ss. 218.0101 to 218.0163.

218.0121(1m)(dm) (dm) “Department” means the department of transportation.

218.0121(1m)(e) (e) “Factory” means a manufacturer, distributor or importer, or an agent of a manufacturer, distributor or importer.

218.0121(1m)(f) (f) “Operate” means to directly or indirectly manage a dealership.

218.0121(1m)(g) (g) “Ownership interest” means the beneficial ownership of one percent or more of any class of equity interest in a dealership, whether the interest is that of a shareholder, partner, limited liability company member or otherwise. To “hold” an ownership interest means to have possession of, title to or control of the ownership interest, whether directly or indirectly through a fiduciary or an agent.

218.0121(2m) (2m) A factory shall not, directly or indirectly, hold an ownership interest in or operate or control a motor vehicle dealership in this state.

218.0121(3m) (3m) This section does not prohibit any of the following:

218.0121(3m)(a) (a) A factory from holding an ownership interest in or operating a dealership for a temporary period, not to exceed one year, during the transition from one owner or dealer operator to another.

218.0121(3m)(b) (b) A factory from holding an ownership interest in a dealership, if all of the following apply:

218.0121(3m)(b)1. 1. The dealer operator of the dealership is an individual who is not an agent of the factory.

218.0121(3m)(b)2. 2. The dealer operator of the dealership is unable to acquire full ownership of the dealership with his or her own assets.

218.0121(3m)(b)3. 3. The dealer operator of the dealership holds not less than 15 percent of the total ownership interests in the dealership within one year from the date that the factory initially acquires any ownership interest in the dealership.

218.0121(3m)(b)4. 4. There is a bona fide written agreement in effect between the factory and the dealer operator of the dealership under which the dealer operator will acquire all of the ownership interest in the dealership held by the factory on reasonable terms specified in the agreement.

218.0121(3m)(b)5. 5. The written agreement described in subd. 4. provides that the dealer operator will make reasonable progress toward acquiring all of the ownership interest in the dealership, and the dealer is making reasonable progress toward acquiring all of the ownership interest in the dealership.

218.0121(3m)(b)6. 6. Not more than eight years have elapsed since the factory initially acquired its ownership interest in the dealership, unless the department, upon petition by the dealer operator, determines that there is good cause to allow the dealer operator a longer period to complete his or her acquisition of all of the ownership interest in the dealership held by the factory and the longer period determined by the department has not yet elapsed.

218.0121(3m)(c) (c) The ownership, operation or control of a dealership by a factory that does not meet the conditions under par. (a) or (b), if the division of hearings and appeals determines, after a hearing on the matter at the request of any party, that there is no prospective independent dealer available to own and operate the dealership in a manner consistent with the public interest and that meets the reasonable standard and uniformly applied qualifications of the factory.

218.0121(3m)(d) (d) The holding or acquisition, solely for investment purposes, of an ownership interest in a publicly traded corporation by an employee benefit plan that is sponsored by a factory.

218.0121 History History: 1999 a. 31 s. 110; Stats. 1999 s. 218.0121; 1999 a. 186; 2003 a. 77.

218.0122 218.0122 Damages to delivered vehicles.

218.0122(1) (1) A manufacturer, importer or distributor shall disclose in writing to a motor vehicle dealer, at or before delivery to the dealer, any damage and repair to a new motor vehicle occurring after the manufacturing process is complete but before delivery to the dealer, if the cost of the repair exceeds 6 percent of the manufacturer’s suggested retail price, as measured by retail repair costs. Replacement of glass, tires, bumpers, fenders, moldings, audio equipment, instrument panels, hoods and deck lids with identical manufacturer’s original equipment is not considered damage and repair under this subsection. If a manufacturer, importer or distributor fails to make a disclosure of damage and repair under this subsection, it shall be liable to the dealer for any liability imposed on the dealer for a failure on the part of the dealer to disclose that damage and repair.

218.0122(2) (2) If the cost of repairing damage to a new motor vehicle that occurs before delivery to the dealer’s location exceeds 6 percent of the manufacturer’s suggested retail price, as measured by retail repair costs, the dealer may reject or, if title has passed to the dealer, require the manufacturer, importer or distributor who delivered the vehicle to repurchase the vehicle within 10 business days after delivery, unless the damage occurred during shipment and the method of transportation, carrier or transporter of the motor vehicle was designated by the motor vehicle dealer. Upon repurchase, the manufacturer, importer or distributor shall be subrogated to all of the dealer’s rights against the carrier or transporter of the motor vehicle regarding damage. The cost of repairing glass, tires, bumpers, moldings and audio equipment with identical manufacturer’s original equipment shall not be included in determining the cost of repairing damage under this subsection.

218.0122(3) (3) This section does not apply to motorcycles that are delivered in a crated, disassembled condition to the dealer or the dealer’s agent.

218.0122 History History: 1999 a. 31 s. 111.

218.0123 218.0123 Vehicle allocations. No manufacturer, importer or distributor shall adopt, change, establish or implement a plan or system for the allocation, scheduling or delivery of new motor vehicles, parts or accessories to its motor vehicle dealers that is not fair, reasonable and equitable or modify an existing plan or system so as to cause the plan or system to be unreasonable, unfair or inequitable. Upon the request of any dealer franchised by it, a manufacturer, importer or distributor shall disclose in writing to the dealer the basis upon which new motor vehicles, parts and accessories are allocated, scheduled and delivered among the manufacturer’s, importer’s or distributor’s dealers of the same line make.

218.0123 History History: 1999 a. 31 s. 112.

218.0124 218.0124 Performance standards. Any performance standard or program for measuring dealership performance that may have a material effect on a dealer, and the application of any such standard or program by a manufacturer, importer or distributor, shall be fair, reasonable and equitable. Upon the request of any dealer, a manufacturer, importer or distributor shall disclose in writing to the dealer a description of how a performance standard or program is designed and all relevant information used in the application of the performance standard or program to that dealer.

218.0124 History History: 1999 a. 31 s. 113.

218.0125 218.0125 Warranty reimbursement.

218.0125(1) (1) In this section:

218.0125(1)(a) (a) “Dealer cost” means the wholesale cost for a part as listed in the manufacturer’s, importer’s or distributor’s current price schedules or, if the part is not so listed, the dealer’s original invoice cost for the part.

218.0125(1)(b) (b) “Qualifying nonwarranty repairs” means nonwarranty repairs that would be covered by the warranty of a manufacturer, importer, or distributor if the vehicle being repaired was covered by the warranty. The term does not include routine maintenance.