Florida Statutes
Chapter 686 - Sales, Distribution, and Franchise Relationships
686.407 - Repurchase of Inventory Upon Termination of Franchise Agreement; Establishment or Relocation of Dealership; Sale or Lease of New Equipment.

(1) Whenever any dealer enters into a franchise agreement with a manufacturer, distributor, or wholesaler in which agreement the dealer agrees to maintain an inventory of equipment or repair parts and the franchise is subsequently terminated, the manufacturer, distributor, or wholesaler shall repurchase the inventory as provided in this section. However, the dealer may keep the inventory if he or she desires. If the dealer has any outstanding debts to the manufacturer, distributor, or wholesaler, then the repurchase amount may be credited to the dealer’s account.
(2) If the dealer decides not to keep the inventory, the manufacturer, distributor, or wholesaler shall repurchase that inventory previously purchased from such manufacturer, distributor, or wholesaler and held by the dealer on the date of termination of the contract. The manufacturer, distributor, or wholesaler shall pay:
(a) One hundred percent of the actual dealer cost, including freight, of all new, unsold, undamaged, and complete equipment which is resalable, less a reasonable allowance for depreciation due to usage by the dealer and deterioration directly attributable to weather conditions at the dealer’s location; and
(b) Eighty-five percent of the current wholesale price of all new, unused, and undamaged repair parts and accessories which are listed in the manufacturer’s, distributor’s, or wholesaler’s current returnable parts list. The manufacturer, distributor, or wholesaler shall also pay the dealer 6 percent of the current wholesale price on all new, unused, and undamaged repair parts returned to cover the cost of handling, packing, and loading. However, the manufacturer, distributor, or wholesaler shall have the option of performing the handling, packing, and loading in lieu of paying the 6-percent sum imposed in this subsection for these services; and, in this event, after receipt by the dealer of the full repurchase amount as provided in this section, the dealer shall make available to the manufacturer, distributor, or wholesaler, at the dealer’s address or at the places at which the equipment is located, all equipment previously purchased by the dealer.

(3) Upon payment within a reasonable time of the repurchase amount to the dealer, the title and right of possession to the repurchased inventory shall transfer or be transferred to the manufacturer, distributor, or wholesaler, as the case may be.
(4) The provisions of this section do not require the repurchase from a dealer of:
(a) Any single repair part which is priced as a set of two or more items.
(b) Any repair part which because of its condition is not resalable as a new part without repackaging or reconditioning.
(c) Any inventory for which the dealer is unable to furnish evidence, reasonably satisfactory to the manufacturer, distributor, or wholesaler, of good title, free and clear of all claims, liens, and encumbrances.
(d) Any inventory which the dealer desires to keep, if the dealer has a contractual right to keep it.
(e) Any equipment which is not in new, unused, undamaged, and complete condition.
(f) Any equipment which has been used by the dealer or has deteriorated because of weather conditions at the dealer’s location unless the manufacturer, distributor, or wholesaler receives a reasonable allowance for such usage or deterioration.
(g) Any repair parts which are not in new, unused, and undamaged condition.
(h) Any inventory which was ordered by the dealer on or after the date of receipt of the notification of termination of the franchise or contractual agreement.
(i) Any inventory which was acquired by the dealer from any source other than the manufacturer, distributor, or wholesaler.

(5) If any manufacturer, distributor, or wholesaler fails or refuses to repurchase any inventory covered under the provisions of this section within 60 days after termination of a dealer’s contract, he or she is civilly liable for 100 percent of the current wholesale price of the inventory plus any freight charges paid by the dealer, such dealer’s reasonable attorney’s fees, court costs, and interest on the current wholesale price computed at the legal interest rate provided in s. 687.01 from the 61st day after termination.
(6) A manufacturer, distributor, or wholesaler that intends to establish a new dealership or to relocate a current dealership for a particular product line or make of equipment within the relevant market area of an existing dealership of the same product line or make of equipment shall give written notice of such intent by certified mail or overnight delivery, return receipt requested, to such existing dealership. The notice shall be delivered at least 180 days prior to establishment of a new dealership or relocation of a current dealership. The notice shall include:
(a) The specific location of the additional or relocated dealership.
(b) The date on or after which the additional or relocated dealership will commence operation at the new location.
(c) The identity of all existing dealerships in whose relevant market area the new or relocated dealership is to be located.
(d) The names of the dealer and principals in the new or relocated dealership.

(7) A manufacturer, distributor, or wholesaler may lease new equipment for use within the state. If the manufacturer, distributor, or wholesaler makes a direct sale or lease of equipment, he or she shall pay to the dealer located within the relevant market area a commission of not less than 7 percent of the sale or lease price of the equipment. This payment shall cover any compensation to the dealer for the cost of customary preparation and delivery as well as any commission on the sale or lease. This compensation must be paid or credited in the same manner as provided in this section. The manufacturer, distributor, or wholesaler, if practicable, shall utilize the dealer in the relevant market area for preparation and delivery. For purposes of this subsection, equipment is considered to be used primarily within a dealer’s relevant market area if the new equipment is located or housed at a user’s facility located within the relevant market area. This subsection shall not be applicable to any liquidation or sale of equipment which has been ordered by any court.
History.—s. 14, ch. 84-217; s. 42, ch. 85-62; s. 738, ch. 97-102; s. 7, ch. 2004-257.