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In 1996, Honda Motors Hamamatsu won the JFL championship, but was not promoted to the J.League. Many reasons are given for this decision. Officially, it was because the team was not able to meet the requirements for a J.League regulation pitch and for sponsorship. However, considering the financial backing of Honda Motor, this explanation is hard to accept completely. Rumours abound, including speculation about political dirty tricks by rivals Nissan (Yokohama Marinos), Toyota (Nagoya Grampus) and Yamaha (Jubilo Iwata). However, it seems most likely that it was a conscious decision made jointly by Honda and the J.League. Factors that argued against Honda's promotion include the team's location (too close to existing teams in Nagoya and Iwata) and Honda's belief that it would probably lose money on a J.League franchise at that point in time.
In any event, Honda never got a second chance. The team went into decline after the 1996 season and ended up missing out on the J2, when it was formed in 1998. Second-place Vissel Kobe was promoted to the J.League in 1996, instead. Thereafter, Honda seemed to make a conscious decision to remain a company team, and though it has had numerous opportunities to advance based on its performance on the pitch, since 2000, the company has not allowed its team to adopt the independent structure that it would require in order to join the J.League.
At the other end of the table, Prima Ham Tsuchiura was promoted to the JFL thanks to the collapse of Cosmo Oil -- once a powerhouse in the old JFL, but a team that went into decline following the creation of the J.League. Prima Ham (thankfully) changed its name to Mito Hollyhock
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| Rank | Team | Destination in 1997 Season |
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| 1 | Honda Hamamatsu |  | Declined promotion | JFL | | 2 | Vissel Kobe |  | Vissel Kobe | J.League | | 3 | Tokyo Gas | . | . | . | | 4 | Tosu Futures |  | Sagan Tosu | . | | 5 | Consadole Sapporo | . | . | . | | 6 | Brummel Sendai | . | . | . | | 7 | Vortis Tokushima | . | . | . | | 8 | Montedio Yamagata | . | . | . | | 9 | Fujitsu Kawasaki |  | Kawasaki Frontale | . | | 10 | Oita Trinita | . | . | . | | 11 | Ventforet Kofu | . | . | . | | 12 | Cosmo Oil |  | Disbanded | | 13 | NTT Kanto | . | . | . | | 14 | Fukushima FC | . | . | . | | 15 | Denso | . | . | . | | 16 | Seino Transport | . | . | . |
Regional Champions1 Jatco
2 Prima Ham Tsuchiura Mito Hollyhock
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