Vehicle Code section 3061

In determining whether good cause has been established for modifying, replacing, terminating, or refusing to continue a franchise, the board shall take into consideration the existing circumstances, including, but not limited to, all of the following:

(a)

Amount of business transacted by the franchisee, as compared to the business available to the franchisee.

(b)

Investment necessarily made and obligations incurred by the franchisee to perform its part of the franchise.

(c)

Permanency of the investment.

(d)

Whether it is injurious or beneficial to the public welfare for the franchise to be modified or replaced or the business of the franchisee disrupted.

(e)

Whether the franchisee has adequate motor vehicle sales and service facilities, equipment, vehicle parts, and qualified service personnel to reasonably provide for the needs of the consumers for the motor vehicles handled by the franchisee and has been and is rendering adequate services to the public.

(f)

Whether the franchisee fails to fulfill the warranty obligations of the franchisor to be performed by the franchisee.

(g)

Extent of franchisee’s failure to comply with the terms of the franchise.

Source: Section 3061, https://leginfo.­legislature.­ca.­gov/faces/codes_displaySection.­xhtml?lawCode=VEH§ionNum=3061.­ (updated Jan. 1, 1983; accessed Jun. 9, 2025).

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Verified:
Jun. 9, 2025

§ 3061’s source at ca​.gov