New motor vehicle dealership, restrictions on operation of orownership by a franchisor.
407.826. 1. (1) A franchisor shall be prohibited from owning oroperating a new motor vehicle dealership in this state. It is not a violationof this section for a franchisor to own or operate a new motor vehicledealership:
(a) For a temporary period of not more than twenty-four months if thedealership is for sale at a reasonable price and on reasonable terms andconditions to an independent qualified buyer. On showing by a franchisor ofgood cause, the time limit set forth above may be extended for an additionalperiod of up to twelve months; or
(b) In a bona fide relationship with an independent person (i) who isrequired to make a significant investment in the new motor vehicle dealershipsubject to loss and (ii) operates the dealership and can reasonably expect toacquire full ownership of the dealership within a reasonable time and underreasonable terms and conditions.
(2) Nothing in this section shall be deemed to prohibit a franchisorfrom owning a minority interest in an entity that owns motor vehicledealerships of the same line-make manufactured and franchised by the factory,provided that all of the following conditions are met at the time ofacquisition and continue to be met during the time the entity maintainsownership:
(a) The interest owned by the factory in said entity shall not exceedforty-five percent of the total ownership;
(b) Any dealership in which the entity owns an interest shall be no lessthan nine miles of any unaffiliated new motor vehicle dealership trading inthe same line-make of vehicle;
(c) All of the licensed dealerships for the sale of such factory's newmotor vehicle in the state trade exclusively in the factory's line-make;
(d) During any period in which the entity has such ownership interest,the factory shall have no more than four franchise agreements governing suchline-make with dealers licensed to do business in this state;
(e) All the factory's franchise agreements confer rights on thefranchisee of the line-make to develop and operate, within a definedgeographic territory or area, as many dealership facilities as the franchiseeand factory shall agree are appropriate;
(f) At the time the entity first acquires an ownership interest, notfewer than seventy-five percent of the franchisees of the line-make withinthis state own and operate two or more dealership facilities in the geographicterritory or area covered by the franchise agreement with the factory;
(g) As of January 1, 2001, there were no more than ten dealerships ofsuch line-make licensed as a new motor vehicle dealer in this state; and
(h) Prior to August 28, 2001, the factory has been continuously engaged,at least since July 1, 1998, in the retail sale of motor vehicles of its ownline-make through direct or indirect ownership of dealerships in at least fivestates.
2. A franchisor shall not sell new motor vehicles directly to any retailconsumer except through a franchisee for the line-make that includes the newmotor vehicle unless such consumer is an employee of the franchisor, or is anot-for-profit organization or an agency of the federal, state or localgovernments. This subsection shall not preclude a franchisor from providinginformation to consumers for the purpose of marketing or facilitating the saleof a new motor vehicle or from establishing programs to sell or offer to sellnew motor vehicles through participating franchisees.
3. The remedies and relief available pursuant to section 407.835 shallapply to this section.
New motor vehicle dealership, restrictions on operation of orownership by a franchisor.
407.826. 1. (1) A franchisor shall be prohibited from owning oroperating a new motor vehicle dealership in this state. It is not a violationof this section for a franchisor to own or operate a new motor vehicledealership:
(a) For a temporary period of not more than twenty-four months if thedealership is for sale at a reasonable price and on reasonable terms andconditions to an independent qualified buyer. On showing by a franchisor ofgood cause, the time limit set forth above may be extended for an additionalperiod of up to twelve months; or
(b) In a bona fide relationship with an independent person (i) who isrequired to make a significant investment in the new motor vehicle dealershipsubject to loss and (ii) operates the dealership and can reasonably expect toacquire full ownership of the dealership within a reasonable time and underreasonable terms and conditions.
(2) Nothing in this section shall be deemed to prohibit a franchisorfrom owning a minority interest in an entity that owns motor vehicledealerships of the same line-make manufactured and franchised by the factory,provided that all of the following conditions are met at the time ofacquisition and continue to be met during the time the entity maintainsownership:
(a) The interest owned by the factory in said entity shall not exceedforty-five percent of the total ownership;
(b) Any dealership in which the entity owns an interest shall be no lessthan nine miles of any unaffiliated new motor vehicle dealership trading inthe same line-make of vehicle;
(c) All of the licensed dealerships for the sale of such factory's newmotor vehicle in the state trade exclusively in the factory's line-make;
(d) During any period in which the entity has such ownership interest,the factory shall have no more than four franchise agreements governing suchline-make with dealers licensed to do business in this state;
(e) All the factory's franchise agreements confer rights on thefranchisee of the line-make to develop and operate, within a definedgeographic territory or area, as many dealership facilities as the franchiseeand factory shall agree are appropriate;
(f) At the time the entity first acquires an ownership interest, notfewer than seventy-five percent of the franchisees of the line-make withinthis state own and operate two or more dealership facilities in the geographicterritory or area covered by the franchise agreement with the factory;
(g) As of January 1, 2001, there were no more than ten dealerships ofsuch line-make licensed as a new motor vehicle dealer in this state; and
(h) Prior to August 28, 2001, the factory has been continuously engaged,at least since July 1, 1998, in the retail sale of motor vehicles of its ownline-make through direct or indirect ownership of dealerships in at least fivestates.
2. A franchisor shall not sell new motor vehicles directly to any retailconsumer except through a franchisee for the line-make that includes the newmotor vehicle unless such consumer is an employee of the franchisor, or is anot-for-profit organization or an agency of the federal, state or localgovernments. This subsection shall not preclude a franchisor from providinginformation to consumers for the purpose of marketing or facilitating the saleof a new motor vehicle or from establishing programs to sell or offer to sellnew motor vehicles through participating franchisees.
3. The remedies and relief available pursuant to section 407.835 shallapply to this section.
New motor vehicle dealership, restrictions on operation of orownership by a franchisor.
407.826. 1. (1) A franchisor shall be prohibited from owning oroperating a new motor vehicle dealership in this state. It is not a violationof this section for a franchisor to own or operate a new motor vehicledealership:
(a) For a temporary period of not more than twenty-four months if thedealership is for sale at a reasonable price and on reasonable terms andconditions to an independent qualified buyer. On showing by a franchisor ofgood cause, the time limit set forth above may be extended for an additionalperiod of up to twelve months; or
(b) In a bona fide relationship with an independent person (i) who isrequired to make a significant investment in the new motor vehicle dealershipsubject to loss and (ii) operates the dealership and can reasonably expect toacquire full ownership of the dealership within a reasonable time and underreasonable terms and conditions.
(2) Nothing in this section shall be deemed to prohibit a franchisorfrom owning a minority interest in an entity that owns motor vehicledealerships of the same line-make manufactured and franchised by the factory,provided that all of the following conditions are met at the time ofacquisition and continue to be met during the time the entity maintainsownership:
(a) The interest owned by the factory in said entity shall not exceedforty-five percent of the total ownership;
(b) Any dealership in which the entity owns an interest shall be no lessthan nine miles of any unaffiliated new motor vehicle dealership trading inthe same line-make of vehicle;
(c) All of the licensed dealerships for the sale of such factory's newmotor vehicle in the state trade exclusively in the factory's line-make;
(d) During any period in which the entity has such ownership interest,the factory shall have no more than four franchise agreements governing suchline-make with dealers licensed to do business in this state;
(e) All the factory's franchise agreements confer rights on thefranchisee of the line-make to develop and operate, within a definedgeographic territory or area, as many dealership facilities as the franchiseeand factory shall agree are appropriate;
(f) At the time the entity first acquires an ownership interest, notfewer than seventy-five percent of the franchisees of the line-make withinthis state own and operate two or more dealership facilities in the geographicterritory or area covered by the franchise agreement with the factory;
(g) As of January 1, 2001, there were no more than ten dealerships ofsuch line-make licensed as a new motor vehicle dealer in this state; and
(h) Prior to August 28, 2001, the factory has been continuously engaged,at least since July 1, 1998, in the retail sale of motor vehicles of its ownline-make through direct or indirect ownership of dealerships in at least fivestates.
2. A franchisor shall not sell new motor vehicles directly to any retailconsumer except through a franchisee for the line-make that includes the newmotor vehicle unless such consumer is an employee of the franchisor, or is anot-for-profit organization or an agency of the federal, state or localgovernments. This subsection shall not preclude a franchisor from providinginformation to consumers for the purpose of marketing or facilitating the saleof a new motor vehicle or from establishing programs to sell or offer to sellnew motor vehicles through participating franchisees.
3. The remedies and relief available pursuant to section 407.835 shallapply to this section.
