government
Rhode Island bill would let dealership families pass down new-car stores
Under the Rhode Island bill, a written designation would control the transfer unless the manufacturer, distributor or factory branch shows good cause to refuse it. The measure would also apply if the owner becomes incapacitated.
For Rhode Island dealership families, the bill offers more certainty at a stressful time. It gives a named relative a defined route to inherit the ownership stake, while preserving the manufacturer’s ability to challenge the move when the law allows.
- Owners could name a family successor in writing.
- The successor would have 120 days to give notice.
- Manufacturers could object only for good cause.
- The family member would still have to meet franchise rules.
- Rhode Island is trying to make one of the most vulnerable moments in a family business a little less precarious
Rhode Island is trying to make one of the most vulnerable moments in a family business a little less precarious. The proposal would let an owner of a new motor vehicle dealership name a designated family member by will or another written instrument to take over the ownership interest if the owner dies or becomes incapacitated.
That successor could step in under the existing franchise, but not automatically. The change is meant to keep the business in the family without pretending the brand’s rules disappear when ownership changes hands.
A handoff with guardrails
The successor would have to give the manufacturer, distributor or factory branch written notice within 120 days of the owner’s death or incapacity. The family member would also have to agree to be bound by all the franchise’s terms and conditions and meet the current criteria the manufacturer uses for dealer-operators.
Manufacturers, distributors and factory branches would still have room to object, but only for good cause. They could also ask for personal and financial information that is reasonably necessary to judge whether the succession meets the law’s requirements. For families trying to preserve a dealership, the bill matters because it narrows the paths a brand can use to block the transfer, while still preserving a basic vetting process.