Utah Code 13-35-202 v2. Sale or transfer of ownership
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Terms Used In Utah Code 13-35-202 v2
- Contract: A legal written agreement that becomes binding when signed.
- Dealership: means a site or location in this state:(2)(a) at which a franchisee conducts the business of a new powersport vehicle dealer; and(2)(b) that is identified as a new powersport vehicle dealer's principal place of business for registration purposes under Section 13-35-105. See Utah Code 13-35-102
- Executive director: means the executive director of the Department of Commerce. See Utah Code 13-35-102
- franchise agreement: means a written agreement, for a definite or indefinite period, in which:
(5)(a) a person grants to another person a license to use a trade name, trademark, service mark, or related characteristic; and(5)(b) a community of interest exists in the marketing of new powersport vehicles, new powersport vehicle parts, and services related to the sale or lease of new powersport vehicles at wholesale or retail. See Utah Code 13-35-102- Franchisee: means a person with whom a franchisor has agreed or permitted, in writing or in practice, to purchase, sell, or offer for sale new powersport vehicles manufactured, produced, represented, or distributed by the franchisor. See Utah Code 13-35-102
- Franchisor: means a person who has, in writing or in practice, agreed with or permits a franchisee to purchase, sell, or offer for sale new powersport vehicles manufactured, produced, represented, or distributed by the franchisor, and includes:
(7)(a)(i) the manufacturer or distributor of the new powersport vehicles;(7)(a)(ii) an intermediate distributor;(7)(a)(iii) an agent, officer, or field or area representative of the franchisor; and(7)(a)(iv) a person who is affiliated with a manufacturer or a representative or who directly or indirectly through an intermediary is controlled by, or is under common control with the manufacturer. See Utah Code 13-35-102- Person: means :
(24)(a) an individual;(24)(b) an association;(24)(c) an institution;(24)(d) a corporation;(24)(e) a company;(24)(f) a trust;(24)(g) a limited liability company;(24)(h) a partnership;(24)(i) a political subdivision;(24)(j) a government office, department, division, bureau, or other body of government; and(24)(k) any other organization or entity. See Utah Code 68-3-12.5- Powersport vehicle: means :
(12)(a)(i) an all-terrain type I, type II, or type III vehicle "ATV" defined in Section 41-22-2;(12)(a)(ii) a snowmobile as defined in Section 41-22-2;(12)(a)(iii) a motorcycle as defined in Section 41-1a-102;(12)(a)(iv) a personal watercraft as defined in Section 73-18-2;(12)(a)(v) except as provided in Subsection (12)(b), a motor-driven cycle as defined in Section 41-6a-102; or(12)(a)(vi) a moped as defined in Section 41-6a-102. See Utah Code 13-35-102- Relevant market area: means :
(13)(a) for a powersport dealership in a county that has a population of less than 225,000:(13)(a)(i) the county in which the powersport dealership exists or is to be established or relocated; and(13)(a)(ii) in addition to the county described in Subsection (13)(a)(i), the area within a 15-mile radius from the site of the existing, new, or relocated dealership; or(13)(b) for a powersport dealership in a county that has a population of 225,000 or more, the area within a 10-mile radius from the site of the existing, new, or relocated dealership. See Utah Code 13-35-102- substantially detrimental: includes the failure of any proposed transferee to meet the objective criteria applied by the franchisor in qualifying franchisees at the time of application. See Utah Code 13-35-305
(1)(a) The franchisor shall give effect to the change in a franchise agreement as a result of an event listed in Subsection (1)(b):(1)(a)(i) subject to Subsection13-35-305 (2)(b); and(1)(a)(ii) unless exempted under Subsection (2).(1)(b) The franchisor shall give effect to the change in a franchise agreement pursuant to Subsection (1)(a) for the:(1)(b)(i) sale of a dealership;(1)(b)(ii) contract for sale of a dealership;(1)(b)(iii) transfer of ownership of a franchisee‘s dealership by sale, transfer of the business, or by stock transfer; or(1)(b)(iv) change in the executive management of the franchisee’s dealership.(2) A franchisor is exempted from the requirements of Subsection (1) if:(2)(a) the transferee is denied, or would be denied, a new powersport vehicle franchisee’s registration pursuant to Section13-35-105 ; or(2)(b) the proposed sale or transfer of the business or change of executive management will be substantially detrimental to the distribution of the franchisor’s new powersport vehicles or to competition in the relevant market area, provided that the franchisor has given written notice to the franchisee within 60 days following receipt by the franchisor of the following:(2)(b)(i) a copy of the proposed contract of sale or transfer executed by the franchisee and the proposed transferee;(2)(b)(ii) a completed copy of the franchisor’s written application for approval of the change in ownership or executive management, if any, including the information customarily required by the franchisor; and(2)(b)(iii)(2)(b)(iii)(A) a written description of the business experience of the executive management of the transferee in the case of a proposed sale or transfer of the franchisee’s business; or(2)(b)(iii)(B) a written description of the business experience of the person involved in the proposed change of the franchisee’s executive management in the case of a proposed change of executive management.(3) For purposes of this section, the refusal by the franchisor to accept a proposed transferee is presumed to be unreasonable and undertaken without good cause if the proposed franchisee:(3)(a) is of good moral character; and(3)(b) otherwise meets the written, reasonable, and uniformly applied standards or qualifications, if any, of the franchisor relating to the business experience of executive management and financial capacity to operate and maintain the dealership required by the franchisor of its franchisees.(4)(4)(a) If after receipt of the written notice from the franchisor described in Subsection (1) the franchisee objects to the franchisor’s refusal to accept the proposed sale or transfer of the business or change of executive management, the franchisee may file an application for a hearing before the executive director up to 60 days from the date of receipt of the notice.(4)(b) After a hearing, the executive director shall determine, and enter an order providing that:(4)(b)(i) the proposed transferee or change in executive management:(4)(b)(i)(A) shall be approved; or(4)(b)(i)(B) may not be approved for specified reasons; or(4)(b)(ii) a proposed transferee or change in executive management is approved if specific conditions are timely satisfied.(4)(c)(4)(c)(i) The franchisee shall have the burden of proof with respect to all issues raised by the franchisee’s application for a hearing as provided in this section.(4)(c)(ii) During the pendency of the hearing, the franchise agreement shall continue in effect in accordance with its terms.(4)(d) The executive director shall expedite, upon written request, any determination sought under this section.