California Vehicle Code 331 – (a) A “franchise” is a written agreement between two or more …
(a) A “franchise” is a written agreement between two or more persons having all of the following conditions:
(1) A commercial relationship of definite duration or continuing indefinite duration.
Terms Used In California Vehicle Code 331
- business: includes a proprietorship, partnership, corporation, and any other form of commercial enterprise. See California Vehicle Code 234
- Dealer: is a person not otherwise expressly excluded by Section 286 who:
California Vehicle Code 285
- distributor: is a ny person other than a manufacturer who sells or distributes new vehicles subject to registration under this code, new trailers subject to identification pursuant to Section 5014. See California Vehicle Code 296
- franchisee: is a ny person who, pursuant to a franchise, receives new motor vehicles subject to registration under this code, new off-highway motorcycles, as defined in Section 436, new all-terrain vehicles, as defined in Section 111, or new trailers subject to identification pursuant to Section 5014. See California Vehicle Code 331.1
- franchisor: is a ny person who manufactures, assembles, or distributes new motor vehicles subject to registration under this code, new off-highway motorcycles, as defined in Section 436, new all-terrain vehicles, as defined in Section 111, or new trailers subject to identification pursuant to Section 5014. See California Vehicle Code 331.2
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- motor vehicle: includes a recreational vehicle as that term is defined in subdivision (a) of §. See California Vehicle Code 415
- New motor vehicle dealer: is a dealer, as defined in Section 285, who, in addition to the requirements of that section, either acquires for resale new and unregistered motor vehicles from manufacturers or distributors of those motor vehicles or acquires for resale new off-highway motorcycles, or all-terrain vehicles from manufacturers or distributors of the vehicles. See California Vehicle Code 426
- Person: includes a natural person, firm, copartnership, association, limited liability company, or corporation. See California Vehicle Code 470
- relevant market area: is a ny area within a radius of 10 miles from the site of a potential new dealership. See California Vehicle Code 507
- vehicle: is a device by which any person or property may be propelled, moved, or drawn upon a highway, excepting a device moved exclusively by human power or used exclusively upon stationary rails or tracks. See California Vehicle Code 670
(2) The franchisee is granted the right to offer for sale or lease, or to sell or lease at retail new motor vehicles or new trailers subject to identification pursuant to Section 5014.1 manufactured or distributed by the franchisor or the right to perform authorized warranty repairs and service, or the right to perform any combination of these activities.
(3) The franchisee constitutes a component of the franchisor’s distribution system.
(4) The operation of the franchisee’s business is substantially associated with the franchisor’s trademark, trade name, advertising, or other commercial symbol designating the franchisor.
(5) The operation of a portion of the franchisee’s business is substantially reliant on the franchisor for a continued supply of new vehicles, parts, or accessories.
(b) The term “franchise” does not include an agreement entered into by a manufacturer or distributor and a person where all the following apply:
(1) The person is authorized to perform warranty repairs and service on vehicles manufactured or distributed by the manufacturer or distributor.
(2) The person is not a new motor vehicle dealer franchisee of the manufacturer or distributor.
(3) The person’s repair and service facility is not located within the relevant market area of a new motor vehicle dealer franchisee of the manufacturer or distributor.
(Amended by Stats. 2001, Ch. 539, Sec. 5. Effective January 1, 2002.)