Unlawful merchandising practices by motorcycle or all-terrain vehicle(ATV) franchisor.
407.1034. Notwithstanding the terms of any franchise agreement, theperformance, whether by act or omission, by a motorcycle or all-terrainvehicle franchisor of any or all of the following acts enumerated in thissection are hereby defined as unlawful practices, the remedies for which areset forth in section 407.1043:
(1) To engage in any conduct which is capricious, in bad faith, orunconscionable and which causes damage to a motorcycle or all-terrain vehiclefranchisee or to the public; provided, that good faith conduct engaged in bymotorcycle or all-terrain vehicle franchisors as sellers of new motorcycles,all-terrain vehicles or parts or as holders of security interests therein, inpursuit of rights or remedies accorded to sellers of goods or to holders ofsecurity interests pursuant to the provisions of chapter 400, RSMo, uniformcommercial code, shall not constitute unfair practices pursuant to sections407.1025 to 407.1049;
(2) To coerce any motorcycle or all-terrain vehicle franchisee to acceptdelivery of any new motorcycle, motorcycles, all-terrain vehicles, equipment,parts or accessories therefor, or any other commodity or commodities whichsuch motorcycle or all-terrain vehicle franchisee has not ordered after suchmotorcycle or all-terrain vehicle franchisee has rejected such commodity orcommodities. It shall not be deemed a violation of sections 407.1025 to407.1049 for a motorcycle or all-terrain vehicle franchisor to require amotorcycle or all-terrain vehicle franchisee to have an inventory of parts,tools and equipment reasonably necessary to service the motorcycles orall-terrain vehicles sold by a motorcycle or all-terrain vehicle franchisor;or new motorcycles or all-terrain vehicles reasonably necessary to meet thedemands of dealers or the public;
(3) To unreasonably refuse to deliver in reasonable quantities andwithin a reasonable time after receipt of orders for new motorcycles orall-terrain vehicles, such motorcycles or all-terrain vehicles as are soordered and as are covered by such franchise and as are specifically publiclyadvertised by such motorcycle or all-terrain vehicle franchisor to beavailable for immediate delivery; provided, however, the failure to deliverany motorcycle or all-terrain vehicle shall not be considered a violation ofsections 407.1025 to 407.1049 if such failure is due to an act of God, workstoppage, or delay due to a strike or labor difficulty, shortage of productsor materials, freight delays, embargo or other cause of which such motorcycleor all-terrain vehicle franchisor has no control;
(4) To coerce any motorcycle or all-terrain vehicle franchisee to enterinto any agreement with such motorcycle or all-terrain vehicle franchisor orto do any other act prejudicial to such motorcycle or all-terrain vehiclefranchisee, by threatening to cancel any franchise or any contractualagreement existing between such motorcycle or all-terrain vehicle franchisorand motorcycle or all-terrain vehicle franchisee; provided, however, thatnotice in good faith to any motorcycle or all-terrain vehicle franchisee ofsuch motorcycle or all-terrain vehicle franchisee's violation of anyprovisions of such franchise or contractual agreement shall not constitute aviolation of sections 407.1025 to 407.1049;
(5) To terminate, cancel or refuse to continue any franchise, directlyor indirectly through the actions of the franchisor, unless such newmotorcycle or all-terrain vehicle franchisee substantially defaults in theperformance of such franchisee's reasonable and lawful obligations under suchfranchisee's franchise, or such new motorcycle or all-terrain vehiclefranchisor discontinues the sale in the state of Missouri of such franchisor'sproducts which are the subject of the franchise:
(a) Notwithstanding the terms of any franchise agreement to thecontrary, good cause to terminate, cancel or refuse to continue any franchiseagreement shall not be established based upon the fact that the motorcycle orall-terrain vehicle franchisee owns, has an investment in, participates in themanagement of or holds a franchise agreement for the sale or service ofanother make or line of new motorcycles or all-terrain vehicles or themotorcycle or all-terrain vehicle dealer has established another make or lineof new motorcycles or all-terrain vehicles or service in the same dealershipfacilities as those of the motorcycle or all-terrain vehicle franchisor priorto February 1, 1998, or such establishment is approved in writing by thefranchisee and the franchisor. However, a franchisor may require a franchiseeto maintain a reasonable line of credit for each franchise and to comply witheach franchisor's reasonable requirements concerning capital, management andfacilities. If the franchise agreement requires the approval of thefranchisor, such approval shall be requested in writing by the franchisee andthe franchisor shall approve or disapprove such a request in writing withinsixty days of receipt of such request. A request from a franchisee shall bedeemed to have been approved if the franchisor fails to notify the franchisee,in writing, of its disapproval within sixty days after its receipt of thewritten request;
(b) In determining whether good cause exists, the administrative hearingcommission shall take into consideration the existing circumstances,including, but not limited to, the following factors:
a. The franchisee's sales in relation to sales in the market;
b. The franchisee's investment and obligations;
c. Injury to the public welfare;
d. The adequacy of the franchisee's service facilities, equipment, partsand personnel in relation to those of other franchisees of the same line-make;
e. Whether warranties are being honored by the franchisee;
f. The parties' compliance with their franchise agreement;
g. The desire of a franchisor for market penetration or a market study,if any, prepared by the franchisor or franchisee are two factors which may beconsidered;
h. The harm to the franchisor;
(6) To prevent by contract or otherwise, any motorcycle or all-terrainvehicle franchisee from changing the capital structure of the franchisee'sfranchise of such motorcycle or all-terrain vehicle franchisee or the means byor through which the franchisee finances the operation of the franchisee'sfranchise, provided the motorcycle or all-terrain vehicle franchisee at alltimes meets any reasonable capital standards agreed to between the motorcycleor all-terrain vehicle franchisee and the motorcycle or all-terrain vehiclefranchisor and grants to the motorcycle or all-terrain vehicle franchisor apurchase money security interest in the new motorcycles or all-terrainvehicles, new parts and accessories purchased from the motorcycle orall-terrain vehicle franchisor;
(7) (a) Prevent, by contract or otherwise, any sale or transfer of afranchisee's franchise or franchises or interest or management thereof;provided, if the franchise specifically permits the franchisor to approve ordisapprove any such proposed sale or transfer, a franchisor shall only beallowed to disapprove a proposed sale or transfer if the interest being soldor transferred when added to any other interest owned by the transfereeconstitutes fifty percent or more of the ownership interest in the franchiseand if the proposed transferee fails to satisfy any standards of thefranchisor which are in fact normally relied upon by the franchisor prior toits entering into a franchise, and which relate to the proposed management orownership of the franchise operations or to the qualification, capitalization,integrity or character of the proposed transferee and which are reasonable. Afranchisee may request, at any time, that the franchisor provide a copy of thestandards which are normally relied upon by the franchisor to evaluate aproposed sale or transfer and a proposed transferee;
(b) The franchisee and the prospective franchisee shall cooperate fullywith the franchisor in providing information relating to the prospectivetransferee's qualifications, capitalization, integrity and character;
(c) In the event of a proposed sale or transfer of a franchise, thefranchisor shall be permitted to exercise a right of first refusal to acquirethe franchisee's assets or ownership if:
a. The franchise agreement permits the franchisor to exercise a right offirst refusal to acquire the franchisee's assets or ownership in the event ofa proposed sale or transfer;
b. Such sale or transfer is conditioned upon the franchisor orfranchisee entering a franchise agreement with the proposed transferee;
c. The exercise of the right of first refusal shall result in thefranchisee and the franchisee's owners receiving the same or greaterconsideration and the same terms and conditions as contracted to receive inconnection with the proposed sale or transfer;
d. The sale or transfer does not involve the sale or transfer to animmediate member or members of the family of one or more franchisee owners,defined as a spouse, child, grandchild, spouse of a child or grandchild,brother, sister or parent of the franchisee owner, or to the qualifiedmanager, defined as an individual who has been employed by the franchisee forat least two years and who otherwise qualifies as a franchisee operator, or apartnership or corporation controlled by such persons; and
e. The franchisor agrees to pay the reasonable expenses, includingattorney's fees which do not exceed the usual, customary and reasonable feescharged for similar work done for other clients, incurred by the proposedtransferee prior to the franchisor's exercise of its right of first refusal innegotiating and implementing the contract for the proposed sale or transfer ofthe franchise or the franchisee's assets. Notwithstanding the foregoing, nopayment of such expenses and attorney's fees shall be required if thefranchisee has not submitted or caused to be submitted an accounting of thoseexpenses within fourteen days of the franchisee's receipt of the franchisor'swritten request for such an accounting. Such accounting may be requested by afranchisor before exercising its right of first refusal;
(d) For determining whether good cause exists for the purposes of thissubdivision, the administrative hearing commission shall take intoconsideration the existing circumstances, including, but not limited to, thefollowing factors:
a. Whether the franchise agreement specifically permits the franchisorto approve or disapprove any proposed sale or transfer;
b. Whether the interest to be sold or transferred when added to anyother interest owned by the proposed transferee constitutes fifty percent ormore of the ownership interest in the franchise;
c. Whether the proposed transferee fails to satisfy any standards of thefranchisor which are in fact normally relied upon by the franchisor prior toits entering into a franchise, and which are related to the proposedmanagement or ownership of the franchise operations or to the qualification,capitalization, integrity or character of the proposed transferee which arereasonable;
d. Injury to the public welfare;
e. The harm to the franchisor;
(8) To prevent by contract or otherwise any motorcycle or all-terrainvehicle franchisee from changing the executive management of motorcycle orall-terrain vehicle franchisee's business, except that any attempt by amotorcycle or all-terrain vehicle franchisor to demonstrate by giving reasonsthat such change in executive management will be detrimental to thedistribution of the motorcycle or all-terrain vehicle franchisor's motorcyclesshall not constitute a violation of this subdivision;
(9) To impose unreasonable standards of performance upon a motorcycle orall-terrain vehicle franchisee;
(10) To require a motorcycle or all-terrain vehicle franchisee at thetime of entering into a franchise arrangement to assent to a release,assignment, novation, waiver or estoppel which would relieve any person fromliability imposed by sections 407.1025 to 407.1049;
(11) To prohibit directly or indirectly the right of free associationamong motorcycle or all-terrain vehicle franchisees for any lawful purpose;
(12) To provide any term or condition in any lease or other agreementancillary or collateral to a franchise, which term or condition directly orindirectly violates the provisions of sections 407.1025 to 407.1049;
(13) Upon any termination, cancellation or refusal to continue anyfranchise or any discontinuation of any line-make or parts or products relatedto such line-make by a franchisor, fail to pay reasonable compensation to afranchisee as follows:
(a) Any new, undamaged and unsold motorcycles or all-terrain vehicles inthe franchisee's inventory of either the current model year or purchased fromthe franchisor within one hundred twenty days prior to receipt of a notice oftermination or nonrenewal, provided the motorcycle or all-terrain vehicle hasless than twenty miles registered on the odometer, including mileage incurredin delivery from the franchisor or in transporting the motorcycle orall-terrain vehicle between dealers for sale, at the dealer's net acquisitioncost;
(b) The current parts catalog cost to the dealer of each new, unused,undamaged and unsold part or accessory if the part or accessory is in thecurrent parts catalog, less applicable allowances. If the part or accessorywas purchased by the franchisee from an outgoing authorized franchisee, thefranchisor shall purchase the part for either the price in the current partscatalog or the franchisee's actual purchase price of the part, whichever isless;
(c) The depreciated value determined pursuant to generally acceptedaccounting principles of each undamaged sign owned by the franchisee whichbears a trademark or trade name used or claimed by the franchisor if the signwas purchased from, or purchased at the request of, the franchisor;
(d) The fair market value of all special tools, data processingequipment and motorcycle or all-terrain vehicle service equipment owned by thefranchisee which were recommended in writing and designated as special toolsand equipment and purchased from, or purchased at the request of, thefranchisor within three years of the termination of the franchise, if thetools and equipment are in usable and good condition, except for reasonablewear and tear; and
(e) The franchisor shall pay the franchisee the amounts specified inthis subdivision within ninety days after the tender of the property subjectto the franchisee providing evidence of good and clear title upon return ofthe property to the franchisor. Unless previous arrangements have been madeand agreed upon, the franchisee is under no obligation to provide insurancefor the property left after one hundred eighty days;
(14) To prevent or refuse to honor the succession to a franchise orfranchises by any legal heir or devisee under the will of a franchisee, underany written instrument filed with the franchisor designating any person as theperson's successor franchisee, or pursuant to the laws of descent anddistribution of this state; provided:
(a) Any designated family member of a deceased or incapacitatedfranchisee shall become the succeeding franchisee of such deceased orincapacitated franchisee if such designated family member gives the franchisorwritten notice of such family member's intention to succeed to the franchiseor franchises within forty-five days after the death or incapacity of thefranchisee, and agrees to be bound by all of the terms and conditions of thecurrent franchise agreement, and the designated family member meets thecurrent reasonable criteria generally applied by the franchisor in qualifyingfranchisees. A franchisee may request, at any time, that the franchisorprovide a copy of such criteria generally applied by the franchisor inqualifying franchisees;
(b) The franchisor may request from a designated family member suchpersonal and financial data as is reasonably necessary to determine whetherthe existing franchise agreement should be honored. The designated familymember shall supply the personal and financial data promptly upon the request;
(c) If the designated family member does not meet the reasonablecriteria generally applied by the franchisor in qualifying franchisees, thediscontinuance of the current franchise agreement shall take effect not lessthan ninety days after the date the franchisor serves the required notice onthe designated family member pursuant to subsection 5 of section 407.1031;
(d) The provisions of this subdivision shall not preclude a franchiseefrom designating any person as the person's successor by written instrumentfiled with the franchisor, and if such an instrument is filed, it alone shalldetermine the succession rights to the management and operation of thefranchise; and
(e) For determining whether good cause exists, the administrativehearing commission shall take into consideration the existing circumstances,including, but not limited to, the following factors:
a. Whether the franchise agreement specifically permits the franchisorto approve or disapprove any successor;
b. Whether the proposed successor fails to satisfy any standards of thefranchisor which are in fact normally relied upon by the franchisor prior tothe successor entering into a franchise, and which relate to the proposedmanagement or ownership of the franchise operation or to the qualification,capitalization, integrity or character of the proposed successor and which arereasonable;
c. Injury to the public welfare;
d. The harm to the franchisor;
(15) To coerce, threaten, intimidate or require a franchisee under anycondition affecting or related to a franchise agreement, or to waive, limit ordisclaim a right that the franchisee may have pursuant to the provisions ofsections 407.1025 to 407.1049. Any contracts or agreements which contain suchprovisions shall be deemed against the public policy of the state of Missouriand are void and unenforceable. Nothing in this section shall be construed toprohibit voluntary settlement agreements;
(16) To initiate any act enumerated in this subsection on grounds thatit has advised a franchisee of its intention to discontinue representation atthe time of a franchisee change.
Unlawful merchandising practices by motorcycle or all-terrain vehicle(ATV) franchisor.
407.1034. Notwithstanding the terms of any franchise agreement, theperformance, whether by act or omission, by a motorcycle or all-terrainvehicle franchisor of any or all of the following acts enumerated in thissection are hereby defined as unlawful practices, the remedies for which areset forth in section 407.1043:
(1) To engage in any conduct which is capricious, in bad faith, orunconscionable and which causes damage to a motorcycle or all-terrain vehiclefranchisee or to the public; provided, that good faith conduct engaged in bymotorcycle or all-terrain vehicle franchisors as sellers of new motorcycles,all-terrain vehicles or parts or as holders of security interests therein, inpursuit of rights or remedies accorded to sellers of goods or to holders ofsecurity interests pursuant to the provisions of chapter 400, RSMo, uniformcommercial code, shall not constitute unfair practices pursuant to sections407.1025 to 407.1049;
(2) To coerce any motorcycle or all-terrain vehicle franchisee to acceptdelivery of any new motorcycle, motorcycles, all-terrain vehicles, equipment,parts or accessories therefor, or any other commodity or commodities whichsuch motorcycle or all-terrain vehicle franchisee has not ordered after suchmotorcycle or all-terrain vehicle franchisee has rejected such commodity orcommodities. It shall not be deemed a violation of sections 407.1025 to407.1049 for a motorcycle or all-terrain vehicle franchisor to require amotorcycle or all-terrain vehicle franchisee to have an inventory of parts,tools and equipment reasonably necessary to service the motorcycles orall-terrain vehicles sold by a motorcycle or all-terrain vehicle franchisor;or new motorcycles or all-terrain vehicles reasonably necessary to meet thedemands of dealers or the public;
(3) To unreasonably refuse to deliver in reasonable quantities andwithin a reasonable time after receipt of orders for new motorcycles orall-terrain vehicles, such motorcycles or all-terrain vehicles as are soordered and as are covered by such franchise and as are specifically publiclyadvertised by such motorcycle or all-terrain vehicle franchisor to beavailable for immediate delivery; provided, however, the failure to deliverany motorcycle or all-terrain vehicle shall not be considered a violation ofsections 407.1025 to 407.1049 if such failure is due to an act of God, workstoppage, or delay due to a strike or labor difficulty, shortage of productsor materials, freight delays, embargo or other cause of which such motorcycleor all-terrain vehicle franchisor has no control;
(4) To coerce any motorcycle or all-terrain vehicle franchisee to enterinto any agreement with such motorcycle or all-terrain vehicle franchisor orto do any other act prejudicial to such motorcycle or all-terrain vehiclefranchisee, by threatening to cancel any franchise or any contractualagreement existing between such motorcycle or all-terrain vehicle franchisorand motorcycle or all-terrain vehicle franchisee; provided, however, thatnotice in good faith to any motorcycle or all-terrain vehicle franchisee ofsuch motorcycle or all-terrain vehicle franchisee's violation of anyprovisions of such franchise or contractual agreement shall not constitute aviolation of sections 407.1025 to 407.1049;
(5) To terminate, cancel or refuse to continue any franchise, directlyor indirectly through the actions of the franchisor, unless such newmotorcycle or all-terrain vehicle franchisee substantially defaults in theperformance of such franchisee's reasonable and lawful obligations under suchfranchisee's franchise, or such new motorcycle or all-terrain vehiclefranchisor discontinues the sale in the state of Missouri of such franchisor'sproducts which are the subject of the franchise:
(a) Notwithstanding the terms of any franchise agreement to thecontrary, good cause to terminate, cancel or refuse to continue any franchiseagreement shall not be established based upon the fact that the motorcycle orall-terrain vehicle franchisee owns, has an investment in, participates in themanagement of or holds a franchise agreement for the sale or service ofanother make or line of new motorcycles or all-terrain vehicles or themotorcycle or all-terrain vehicle dealer has established another make or lineof new motorcycles or all-terrain vehicles or service in the same dealershipfacilities as those of the motorcycle or all-terrain vehicle franchisor priorto February 1, 1998, or such establishment is approved in writing by thefranchisee and the franchisor. However, a franchisor may require a franchiseeto maintain a reasonable line of credit for each franchise and to comply witheach franchisor's reasonable requirements concerning capital, management andfacilities. If the franchise agreement requires the approval of thefranchisor, such approval shall be requested in writing by the franchisee andthe franchisor shall approve or disapprove such a request in writing withinsixty days of receipt of such request. A request from a franchisee shall bedeemed to have been approved if the franchisor fails to notify the franchisee,in writing, of its disapproval within sixty days after its receipt of thewritten request;
(b) In determining whether good cause exists, the administrative hearingcommission shall take into consideration the existing circumstances,including, but not limited to, the following factors:
a. The franchisee's sales in relation to sales in the market;
b. The franchisee's investment and obligations;
c. Injury to the public welfare;
d. The adequacy of the franchisee's service facilities, equipment, partsand personnel in relation to those of other franchisees of the same line-make;
e. Whether warranties are being honored by the franchisee;
f. The parties' compliance with their franchise agreement;
g. The desire of a franchisor for market penetration or a market study,if any, prepared by the franchisor or franchisee are two factors which may beconsidered;
h. The harm to the franchisor;
(6) To prevent by contract or otherwise, any motorcycle or all-terrainvehicle franchisee from changing the capital structure of the franchisee'sfranchise of such motorcycle or all-terrain vehicle franchisee or the means byor through which the franchisee finances the operation of the franchisee'sfranchise, provided the motorcycle or all-terrain vehicle franchisee at alltimes meets any reasonable capital standards agreed to between the motorcycleor all-terrain vehicle franchisee and the motorcycle or all-terrain vehiclefranchisor and grants to the motorcycle or all-terrain vehicle franchisor apurchase money security interest in the new motorcycles or all-terrainvehicles, new parts and accessories purchased from the motorcycle orall-terrain vehicle franchisor;
(7) (a) Prevent, by contract or otherwise, any sale or transfer of afranchisee's franchise or franchises or interest or management thereof;provided, if the franchise specifically permits the franchisor to approve ordisapprove any such proposed sale or transfer, a franchisor shall only beallowed to disapprove a proposed sale or transfer if the interest being soldor transferred when added to any other interest owned by the transfereeconstitutes fifty percent or more of the ownership interest in the franchiseand if the proposed transferee fails to satisfy any standards of thefranchisor which are in fact normally relied upon by the franchisor prior toits entering into a franchise, and which relate to the proposed management orownership of the franchise operations or to the qualification, capitalization,integrity or character of the proposed transferee and which are reasonable. Afranchisee may request, at any time, that the franchisor provide a copy of thestandards which are normally relied upon by the franchisor to evaluate aproposed sale or transfer and a proposed transferee;
(b) The franchisee and the prospective franchisee shall cooperate fullywith the franchisor in providing information relating to the prospectivetransferee's qualifications, capitalization, integrity and character;
(c) In the event of a proposed sale or transfer of a franchise, thefranchisor shall be permitted to exercise a right of first refusal to acquirethe franchisee's assets or ownership if:
a. The franchise agreement permits the franchisor to exercise a right offirst refusal to acquire the franchisee's assets or ownership in the event ofa proposed sale or transfer;
b. Such sale or transfer is conditioned upon the franchisor orfranchisee entering a franchise agreement with the proposed transferee;
c. The exercise of the right of first refusal shall result in thefranchisee and the franchisee's owners receiving the same or greaterconsideration and the same terms and conditions as contracted to receive inconnection with the proposed sale or transfer;
d. The sale or transfer does not involve the sale or transfer to animmediate member or members of the family of one or more franchisee owners,defined as a spouse, child, grandchild, spouse of a child or grandchild,brother, sister or parent of the franchisee owner, or to the qualifiedmanager, defined as an individual who has been employed by the franchisee forat least two years and who otherwise qualifies as a franchisee operator, or apartnership or corporation controlled by such persons; and
e. The franchisor agrees to pay the reasonable expenses, includingattorney's fees which do not exceed the usual, customary and reasonable feescharged for similar work done for other clients, incurred by the proposedtransferee prior to the franchisor's exercise of its right of first refusal innegotiating and implementing the contract for the proposed sale or transfer ofthe franchise or the franchisee's assets. Notwithstanding the foregoing, nopayment of such expenses and attorney's fees shall be required if thefranchisee has not submitted or caused to be submitted an accounting of thoseexpenses within fourteen days of the franchisee's receipt of the franchisor'swritten request for such an accounting. Such accounting may be requested by afranchisor before exercising its right of first refusal;
(d) For determining whether good cause exists for the purposes of thissubdivision, the administrative hearing commission shall take intoconsideration the existing circumstances, including, but not limited to, thefollowing factors:
a. Whether the franchise agreement specifically permits the franchisorto approve or disapprove any proposed sale or transfer;
b. Whether the interest to be sold or transferred when added to anyother interest owned by the proposed transferee constitutes fifty percent ormore of the ownership interest in the franchise;
c. Whether the proposed transferee fails to satisfy any standards of thefranchisor which are in fact normally relied upon by the franchisor prior toits entering into a franchise, and which are related to the proposedmanagement or ownership of the franchise operations or to the qualification,capitalization, integrity or character of the proposed transferee which arereasonable;
d. Injury to the public welfare;
e. The harm to the franchisor;
(8) To prevent by contract or otherwise any motorcycle or all-terrainvehicle franchisee from changing the executive management of motorcycle orall-terrain vehicle franchisee's business, except that any attempt by amotorcycle or all-terrain vehicle franchisor to demonstrate by giving reasonsthat such change in executive management will be detrimental to thedistribution of the motorcycle or all-terrain vehicle franchisor's motorcyclesshall not constitute a violation of this subdivision;
(9) To impose unreasonable standards of performance upon a motorcycle orall-terrain vehicle franchisee;
(10) To require a motorcycle or all-terrain vehicle franchisee at thetime of entering into a franchise arrangement to assent to a release,assignment, novation, waiver or estoppel which would relieve any person fromliability imposed by sections 407.1025 to 407.1049;
(11) To prohibit directly or indirectly the right of free associationamong motorcycle or all-terrain vehicle franchisees for any lawful purpose;
(12) To provide any term or condition in any lease or other agreementancillary or collateral to a franchise, which term or condition directly orindirectly violates the provisions of sections 407.1025 to 407.1049;
(13) Upon any termination, cancellation or refusal to continue anyfranchise or any discontinuation of any line-make or parts or products relatedto such line-make by a franchisor, fail to pay reasonable compensation to afranchisee as follows:
(a) Any new, undamaged and unsold motorcycles or all-terrain vehicles inthe franchisee's inventory of either the current model year or purchased fromthe franchisor within one hundred twenty days prior to receipt of a notice oftermination or nonrenewal, provided the motorcycle or all-terrain vehicle hasless than twenty miles registered on the odometer, including mileage incurredin delivery from the franchisor or in transporting the motorcycle orall-terrain vehicle between dealers for sale, at the dealer's net acquisitioncost;
(b) The current parts catalog cost to the dealer of each new, unused,undamaged and unsold part or accessory if the part or accessory is in thecurrent parts catalog, less applicable allowances. If the part or accessorywas purchased by the franchisee from an outgoing authorized franchisee, thefranchisor shall purchase the part for either the price in the current partscatalog or the franchisee's actual purchase price of the part, whichever isless;
(c) The depreciated value determined pursuant to generally acceptedaccounting principles of each undamaged sign owned by the franchisee whichbears a trademark or trade name used or claimed by the franchisor if the signwas purchased from, or purchased at the request of, the franchisor;
(d) The fair market value of all special tools, data processingequipment and motorcycle or all-terrain vehicle service equipment owned by thefranchisee which were recommended in writing and designated as special toolsand equipment and purchased from, or purchased at the request of, thefranchisor within three years of the termination of the franchise, if thetools and equipment are in usable and good condition, except for reasonablewear and tear; and
(e) The franchisor shall pay the franchisee the amounts specified inthis subdivision within ninety days after the tender of the property subjectto the franchisee providing evidence of good and clear title upon return ofthe property to the franchisor. Unless previous arrangements have been madeand agreed upon, the franchisee is under no obligation to provide insurancefor the property left after one hundred eighty days;
(14) To prevent or refuse to honor the succession to a franchise orfranchises by any legal heir or devisee under the will of a franchisee, underany written instrument filed with the franchisor designating any person as theperson's successor franchisee, or pursuant to the laws of descent anddistribution of this state; provided:
(a) Any designated family member of a deceased or incapacitatedfranchisee shall become the succeeding franchisee of such deceased orincapacitated franchisee if such designated family member gives the franchisorwritten notice of such family member's intention to succeed to the franchiseor franchises within forty-five days after the death or incapacity of thefranchisee, and agrees to be bound by all of the terms and conditions of thecurrent franchise agreement, and the designated family member meets thecurrent reasonable criteria generally applied by the franchisor in qualifyingfranchisees. A franchisee may request, at any time, that the franchisorprovide a copy of such criteria generally applied by the franchisor inqualifying franchisees;
(b) The franchisor may request from a designated family member suchpersonal and financial data as is reasonably necessary to determine whetherthe existing franchise agreement should be honored. The designated familymember shall supply the personal and financial data promptly upon the request;
(c) If the designated family member does not meet the reasonablecriteria generally applied by the franchisor in qualifying franchisees, thediscontinuance of the current franchise agreement shall take effect not lessthan ninety days after the date the franchisor serves the required notice onthe designated family member pursuant to subsection 5 of section 407.1031;
(d) The provisions of this subdivision shall not preclude a franchiseefrom designating any person as the person's successor by written instrumentfiled with the franchisor, and if such an instrument is filed, it alone shalldetermine the succession rights to the management and operation of thefranchise; and
(e) For determining whether good cause exists, the administrativehearing commission shall take into consideration the existing circumstances,including, but not limited to, the following factors:
a. Whether the franchise agreement specifically permits the franchisorto approve or disapprove any successor;
b. Whether the proposed successor fails to satisfy any standards of thefranchisor which are in fact normally relied upon by the franchisor prior tothe successor entering into a franchise, and which relate to the proposedmanagement or ownership of the franchise operation or to the qualification,capitalization, integrity or character of the proposed successor and which arereasonable;
c. Injury to the public welfare;
d. The harm to the franchisor;
(15) To coerce, threaten, intimidate or require a franchisee under anycondition affecting or related to a franchise agreement, or to waive, limit ordisclaim a right that the franchisee may have pursuant to the provisions ofsections 407.1025 to 407.1049. Any contracts or agreements which contain suchprovisions shall be deemed against the public policy of the state of Missouriand are void and unenforceable. Nothing in this section shall be construed toprohibit voluntary settlement agreements;
(16) To initiate any act enumerated in this subsection on grounds thatit has advised a franchisee of its intention to discontinue representation atthe time of a franchisee change.
Unlawful merchandising practices by motorcycle or all-terrain vehicle(ATV) franchisor.
407.1034. Notwithstanding the terms of any franchise agreement, theperformance, whether by act or omission, by a motorcycle or all-terrainvehicle franchisor of any or all of the following acts enumerated in thissection are hereby defined as unlawful practices, the remedies for which areset forth in section 407.1043:
(1) To engage in any conduct which is capricious, in bad faith, orunconscionable and which causes damage to a motorcycle or all-terrain vehiclefranchisee or to the public; provided, that good faith conduct engaged in bymotorcycle or all-terrain vehicle franchisors as sellers of new motorcycles,all-terrain vehicles or parts or as holders of security interests therein, inpursuit of rights or remedies accorded to sellers of goods or to holders ofsecurity interests pursuant to the provisions of chapter 400, RSMo, uniformcommercial code, shall not constitute unfair practices pursuant to sections407.1025 to 407.1049;
(2) To coerce any motorcycle or all-terrain vehicle franchisee to acceptdelivery of any new motorcycle, motorcycles, all-terrain vehicles, equipment,parts or accessories therefor, or any other commodity or commodities whichsuch motorcycle or all-terrain vehicle franchisee has not ordered after suchmotorcycle or all-terrain vehicle franchisee has rejected such commodity orcommodities. It shall not be deemed a violation of sections 407.1025 to407.1049 for a motorcycle or all-terrain vehicle franchisor to require amotorcycle or all-terrain vehicle franchisee to have an inventory of parts,tools and equipment reasonably necessary to service the motorcycles orall-terrain vehicles sold by a motorcycle or all-terrain vehicle franchisor;or new motorcycles or all-terrain vehicles reasonably necessary to meet thedemands of dealers or the public;
(3) To unreasonably refuse to deliver in reasonable quantities andwithin a reasonable time after receipt of orders for new motorcycles orall-terrain vehicles, such motorcycles or all-terrain vehicles as are soordered and as are covered by such franchise and as are specifically publiclyadvertised by such motorcycle or all-terrain vehicle franchisor to beavailable for immediate delivery; provided, however, the failure to deliverany motorcycle or all-terrain vehicle shall not be considered a violation ofsections 407.1025 to 407.1049 if such failure is due to an act of God, workstoppage, or delay due to a strike or labor difficulty, shortage of productsor materials, freight delays, embargo or other cause of which such motorcycleor all-terrain vehicle franchisor has no control;
(4) To coerce any motorcycle or all-terrain vehicle franchisee to enterinto any agreement with such motorcycle or all-terrain vehicle franchisor orto do any other act prejudicial to such motorcycle or all-terrain vehiclefranchisee, by threatening to cancel any franchise or any contractualagreement existing between such motorcycle or all-terrain vehicle franchisorand motorcycle or all-terrain vehicle franchisee; provided, however, thatnotice in good faith to any motorcycle or all-terrain vehicle franchisee ofsuch motorcycle or all-terrain vehicle franchisee's violation of anyprovisions of such franchise or contractual agreement shall not constitute aviolation of sections 407.1025 to 407.1049;
(5) To terminate, cancel or refuse to continue any franchise, directlyor indirectly through the actions of the franchisor, unless such newmotorcycle or all-terrain vehicle franchisee substantially defaults in theperformance of such franchisee's reasonable and lawful obligations under suchfranchisee's franchise, or such new motorcycle or all-terrain vehiclefranchisor discontinues the sale in the state of Missouri of such franchisor'sproducts which are the subject of the franchise:
(a) Notwithstanding the terms of any franchise agreement to thecontrary, good cause to terminate, cancel or refuse to continue any franchiseagreement shall not be established based upon the fact that the motorcycle orall-terrain vehicle franchisee owns, has an investment in, participates in themanagement of or holds a franchise agreement for the sale or service ofanother make or line of new motorcycles or all-terrain vehicles or themotorcycle or all-terrain vehicle dealer has established another make or lineof new motorcycles or all-terrain vehicles or service in the same dealershipfacilities as those of the motorcycle or all-terrain vehicle franchisor priorto February 1, 1998, or such establishment is approved in writing by thefranchisee and the franchisor. However, a franchisor may require a franchiseeto maintain a reasonable line of credit for each franchise and to comply witheach franchisor's reasonable requirements concerning capital, management andfacilities. If the franchise agreement requires the approval of thefranchisor, such approval shall be requested in writing by the franchisee andthe franchisor shall approve or disapprove such a request in writing withinsixty days of receipt of such request. A request from a franchisee shall bedeemed to have been approved if the franchisor fails to notify the franchisee,in writing, of its disapproval within sixty days after its receipt of thewritten request;
(b) In determining whether good cause exists, the administrative hearingcommission shall take into consideration the existing circumstances,including, but not limited to, the following factors:
a. The franchisee's sales in relation to sales in the market;
b. The franchisee's investment and obligations;
c. Injury to the public welfare;
d. The adequacy of the franchisee's service facilities, equipment, partsand personnel in relation to those of other franchisees of the same line-make;
e. Whether warranties are being honored by the franchisee;
f. The parties' compliance with their franchise agreement;
g. The desire of a franchisor for market penetration or a market study,if any, prepared by the franchisor or franchisee are two factors which may beconsidered;
h. The harm to the franchisor;
(6) To prevent by contract or otherwise, any motorcycle or all-terrainvehicle franchisee from changing the capital structure of the franchisee'sfranchise of such motorcycle or all-terrain vehicle franchisee or the means byor through which the franchisee finances the operation of the franchisee'sfranchise, provided the motorcycle or all-terrain vehicle franchisee at alltimes meets any reasonable capital standards agreed to between the motorcycleor all-terrain vehicle franchisee and the motorcycle or all-terrain vehiclefranchisor and grants to the motorcycle or all-terrain vehicle franchisor apurchase money security interest in the new motorcycles or all-terrainvehicles, new parts and accessories purchased from the motorcycle orall-terrain vehicle franchisor;
(7) (a) Prevent, by contract or otherwise, any sale or transfer of afranchisee's franchise or franchises or interest or management thereof;provided, if the franchise specifically permits the franchisor to approve ordisapprove any such proposed sale or transfer, a franchisor shall only beallowed to disapprove a proposed sale or transfer if the interest being soldor transferred when added to any other interest owned by the transfereeconstitutes fifty percent or more of the ownership interest in the franchiseand if the proposed transferee fails to satisfy any standards of thefranchisor which are in fact normally relied upon by the franchisor prior toits entering into a franchise, and which relate to the proposed management orownership of the franchise operations or to the qualification, capitalization,integrity or character of the proposed transferee and which are reasonable. Afranchisee may request, at any time, that the franchisor provide a copy of thestandards which are normally relied upon by the franchisor to evaluate aproposed sale or transfer and a proposed transferee;
(b) The franchisee and the prospective franchisee shall cooperate fullywith the franchisor in providing information relating to the prospectivetransferee's qualifications, capitalization, integrity and character;
(c) In the event of a proposed sale or transfer of a franchise, thefranchisor shall be permitted to exercise a right of first refusal to acquirethe franchisee's assets or ownership if:
a. The franchise agreement permits the franchisor to exercise a right offirst refusal to acquire the franchisee's assets or ownership in the event ofa proposed sale or transfer;
b. Such sale or transfer is conditioned upon the franchisor orfranchisee entering a franchise agreement with the proposed transferee;
c. The exercise of the right of first refusal shall result in thefranchisee and the franchisee's owners receiving the same or greaterconsideration and the same terms and conditions as contracted to receive inconnection with the proposed sale or transfer;
d. The sale or transfer does not involve the sale or transfer to animmediate member or members of the family of one or more franchisee owners,defined as a spouse, child, grandchild, spouse of a child or grandchild,brother, sister or parent of the franchisee owner, or to the qualifiedmanager, defined as an individual who has been employed by the franchisee forat least two years and who otherwise qualifies as a franchisee operator, or apartnership or corporation controlled by such persons; and
e. The franchisor agrees to pay the reasonable expenses, includingattorney's fees which do not exceed the usual, customary and reasonable feescharged for similar work done for other clients, incurred by the proposedtransferee prior to the franchisor's exercise of its right of first refusal innegotiating and implementing the contract for the proposed sale or transfer ofthe franchise or the franchisee's assets. Notwithstanding the foregoing, nopayment of such expenses and attorney's fees shall be required if thefranchisee has not submitted or caused to be submitted an accounting of thoseexpenses within fourteen days of the franchisee's receipt of the franchisor'swritten request for such an accounting. Such accounting may be requested by afranchisor before exercising its right of first refusal;
(d) For determining whether good cause exists for the purposes of thissubdivision, the administrative hearing commission shall take intoconsideration the existing circumstances, including, but not limited to, thefollowing factors:
a. Whether the franchise agreement specifically permits the franchisorto approve or disapprove any proposed sale or transfer;
b. Whether the interest to be sold or transferred when added to anyother interest owned by the proposed transferee constitutes fifty percent ormore of the ownership interest in the franchise;
c. Whether the proposed transferee fails to satisfy any standards of thefranchisor which are in fact normally relied upon by the franchisor prior toits entering into a franchise, and which are related to the proposedmanagement or ownership of the franchise operations or to the qualification,capitalization, integrity or character of the proposed transferee which arereasonable;
d. Injury to the public welfare;
e. The harm to the franchisor;
(8) To prevent by contract or otherwise any motorcycle or all-terrainvehicle franchisee from changing the executive management of motorcycle orall-terrain vehicle franchisee's business, except that any attempt by amotorcycle or all-terrain vehicle franchisor to demonstrate by giving reasonsthat such change in executive management will be detrimental to thedistribution of the motorcycle or all-terrain vehicle franchisor's motorcyclesshall not constitute a violation of this subdivision;
(9) To impose unreasonable standards of performance upon a motorcycle orall-terrain vehicle franchisee;
(10) To require a motorcycle or all-terrain vehicle franchisee at thetime of entering into a franchise arrangement to assent to a release,assignment, novation, waiver or estoppel which would relieve any person fromliability imposed by sections 407.1025 to 407.1049;
(11) To prohibit directly or indirectly the right of free associationamong motorcycle or all-terrain vehicle franchisees for any lawful purpose;
(12) To provide any term or condition in any lease or other agreementancillary or collateral to a franchise, which term or condition directly orindirectly violates the provisions of sections 407.1025 to 407.1049;
(13) Upon any termination, cancellation or refusal to continue anyfranchise or any discontinuation of any line-make or parts or products relatedto such line-make by a franchisor, fail to pay reasonable compensation to afranchisee as follows:
(a) Any new, undamaged and unsold motorcycles or all-terrain vehicles inthe franchisee's inventory of either the current model year or purchased fromthe franchisor within one hundred twenty days prior to receipt of a notice oftermination or nonrenewal, provided the motorcycle or all-terrain vehicle hasless than twenty miles registered on the odometer, including mileage incurredin delivery from the franchisor or in transporting the motorcycle orall-terrain vehicle between dealers for sale, at the dealer's net acquisitioncost;
(b) The current parts catalog cost to the dealer of each new, unused,undamaged and unsold part or accessory if the part or accessory is in thecurrent parts catalog, less applicable allowances. If the part or accessorywas purchased by the franchisee from an outgoing authorized franchisee, thefranchisor shall purchase the part for either the price in the current partscatalog or the franchisee's actual purchase price of the part, whichever isless;
(c) The depreciated value determined pursuant to generally acceptedaccounting principles of each undamaged sign owned by the franchisee whichbears a trademark or trade name used or claimed by the franchisor if the signwas purchased from, or purchased at the request of, the franchisor;
(d) The fair market value of all special tools, data processingequipment and motorcycle or all-terrain vehicle service equipment owned by thefranchisee which were recommended in writing and designated as special toolsand equipment and purchased from, or purchased at the request of, thefranchisor within three years of the termination of the franchise, if thetools and equipment are in usable and good condition, except for reasonablewear and tear; and
(e) The franchisor shall pay the franchisee the amounts specified inthis subdivision within ninety days after the tender of the property subjectto the franchisee providing evidence of good and clear title upon return ofthe property to the franchisor. Unless previous arrangements have been madeand agreed upon, the franchisee is under no obligation to provide insurancefor the property left after one hundred eighty days;
(14) To prevent or refuse to honor the succession to a franchise orfranchises by any legal heir or devisee under the will of a franchisee, underany written instrument filed with the franchisor designating any person as theperson's successor franchisee, or pursuant to the laws of descent anddistribution of this state; provided:
(a) Any designated family member of a deceased or incapacitatedfranchisee shall become the succeeding franchisee of such deceased orincapacitated franchisee if such designated family member gives the franchisorwritten notice of such family member's intention to succeed to the franchiseor franchises within forty-five days after the death or incapacity of thefranchisee, and agrees to be bound by all of the terms and conditions of thecurrent franchise agreement, and the designated family member meets thecurrent reasonable criteria generally applied by the franchisor in qualifyingfranchisees. A franchisee may request, at any time, that the franchisorprovide a copy of such criteria generally applied by the franchisor inqualifying franchisees;
(b) The franchisor may request from a designated family member suchpersonal and financial data as is reasonably necessary to determine whetherthe existing franchise agreement should be honored. The designated familymember shall supply the personal and financial data promptly upon the request;
(c) If the designated family member does not meet the reasonablecriteria generally applied by the franchisor in qualifying franchisees, thediscontinuance of the current franchise agreement shall take effect not lessthan ninety days after the date the franchisor serves the required notice onthe designated family member pursuant to subsection 5 of section 407.1031;
(d) The provisions of this subdivision shall not preclude a franchiseefrom designating any person as the person's successor by written instrumentfiled with the franchisor, and if such an instrument is filed, it alone shalldetermine the succession rights to the management and operation of thefranchise; and
(e) For determining whether good cause exists, the administrativehearing commission shall take into consideration the existing circumstances,including, but not limited to, the following factors:
a. Whether the franchise agreement specifically permits the franchisorto approve or disapprove any successor;
b. Whether the proposed successor fails to satisfy any standards of thefranchisor which are in fact normally relied upon by the franchisor prior tothe successor entering into a franchise, and which relate to the proposedmanagement or ownership of the franchise operation or to the qualification,capitalization, integrity or character of the proposed successor and which arereasonable;
c. Injury to the public welfare;
d. The harm to the franchisor;
(15) To coerce, threaten, intimidate or require a franchisee under anycondition affecting or related to a franchise agreement, or to waive, limit ordisclaim a right that the franchisee may have pursuant to the provisions ofsections 407.1025 to 407.1049. Any contracts or agreements which contain suchprovisions shall be deemed against the public policy of the state of Missouriand are void and unenforceable. Nothing in this section shall be construed toprohibit voluntary settlement agreements;
(16) To initiate any act enumerated in this subsection on grounds thatit has advised a franchisee of its intention to discontinue representation atthe time of a franchisee change.
