87Obligation to manage winding down of agreement

87 Obligation to manage winding down of agreement

(1) This section applies if: (a) under section 85, the franchisor gives the franchisee a notice that the franchisor intends to neither extend the agreement nor enter into a new franchise agreement with the franchisee; or (b) under section 86, the franchisee gives the franchisor a notice that the franchisee intends to neither renew the agreement nor enter into a new franchise agreement with the franchisor. (2) The franchisor and franchisee must, as soon as practicable, cooperate to develop and implement a written plan (with milestones) for managing the winding down of the dealership, including how the franchisee’s stock (including new road vehicles, spare parts and service and repair equipment) will be managed over the remaining term of the agreement.

Note: Each party to a franchise agreement is under an obligation to act in good faith in relation to the agreement (see section 18).

Civil penalty: 600 penalty units.