Kentucky Statutes 190.043 – Refusal of manufacturer or distributor to honor succession
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(1) If a manufacturer or distributor believes that good cause exists for refusing to honor the succession to the ownership of a new motor vehicle dealership by a family member of a deceased or incapacitated owner of a new motor vehicle dealership under the existing franchise agreement, the manufacturer or distributor may, not more than sixty (60) days following the receipt of:
(a) Notice of the designated family member‘s intent to succeed to the ownership of the new motor vehicle dealership; or
(b) Any personal or financial data which it has requested;
serve upon the designated family member and the commission, notice of its refusal to honor the succession and its intent to discontinue the existing franchise with the dealer no sooner than ninety (90) days from the date such notice is served.
(2) The notice provided in subsection (1) of this section must state the specific grounds for the refusal to honor the succession and of its intent to discontinue the existing franchise with the new motor vehicle dealer no sooner than ninety (90) days from the date such notice is served.
(3) If notice of refusal and discontinuance as provided in subsection (1) of this section is not timely served upon the family member, the franchise shall continue in effect subject to termination only as otherwise permitted by KRS § 190.045.
(4) In determining whether good cause for the refusal to honor the succession exists, the manufacturer, distributor, factory branch, or importer has the burden of proving before the commission that the successor is a person who is not of good moral character or does not meet the franchisor’s existing and reasonable standards, and considering the volume of sales and service of the new motor vehicle dealership, the uniformly applied business experience standards in the market area.
Effective: July 15, 1996
History: Amended 1996 Ky. Acts ch. 111, sec. 4, effective July 15, 1996. — Created
1982 Ky. Acts ch. 373, sec. 11, effective July 15, 1982.
(a) Notice of the designated family member‘s intent to succeed to the ownership of the new motor vehicle dealership; or
Terms Used In Kentucky Statutes 190.043
- Commission: means the Motor Vehicle Commission. See Kentucky Statutes 190.010
- Designated family member: means the spouse, child, grandchild, parent, brother, or sister of a dealer who, in the case of a deceased dealer, is entitled to inherit the dealer's ownership interest in the dealership under the terms of the dealer's will. See Kentucky Statutes 190.010
- Distributor: which means any person, firm, association, corporation, or trust, resident or nonresident, who in whole or in part offers for sale, sells, or distributes any new motor vehicle to new motor vehicle dealers, or who maintains factory representatives, or who controls any person, firm, association, corporation, or trust, resident or nonresident, who in whole or in part offers for sale, sells, or distributes any new motor vehicle to new motor vehicle dealers. See Kentucky Statutes 190.010
- Factory branch: which means a branch office maintained by a manufacturer for the purpose of selling, or offering for sale, new motor vehicles to a distributor, wholesaler, or new motor vehicle dealer, or for directing or supervising, in whole or in part, factory or distributor representatives, and shall further include any sales promotion organization, whether the same be a person, firm, or corporation, which is engaged in promoting the sale of new motor vehicles in this state of a particular brand or make to new motor vehicle dealers. See Kentucky Statutes 190.010
- Franchise: means the agreement or contract between any new motor vehicle manufacturer, written or otherwise, and any new motor vehicle dealer that purports to fix the legal rights and liabilities of the parties to an agreement or contract, and pursuant to which the dealer purchases and resells the franchise product, along with any addendums to the franchise agreement. See Kentucky Statutes 190.010
- Manufacturer: means any person, partnership, firm, association, corporation, or trust, resident or nonresident, who manufactures or assembles new motor vehicles, or imports for distribution through distributors of new motor vehicles, or any partnership, firm, association, joint venture, corporation, or trust, resident or nonresident, which is controlled by the manufacturer. See Kentucky Statutes 190.010
- Motor vehicle: means every vehicle intended primarily for use and operation on the public highways that is self-propelled, including low-speed motor vehicles as defined in KRS §. See Kentucky Statutes 190.010
- Motor vehicle dealer: means any person not excluded by subsection (3) of this section, engaged in the business of selling, offering to sell, soliciting, or advertising the same, of new or used motor vehicles, or possessing motor vehicles for the purpose of resale, either on his or her own account, or on behalf of another, either as his or her primary business or incidental thereto. See Kentucky Statutes 190.010
- New motor vehicle: means a vehicle that is in the possession of the manufacturer, distributor, or wholesaler, or has been sold to the holders of a valid sales and service agreement, franchise, or contract, granted by the manufacturer, distributor, or wholesaler for the sale of the make of new vehicle, which is new, and on which the original title has not been issued from the franchised dealer. See Kentucky Statutes 190.010
- Owner: when applied to any animal, means any person having a property interest in such animal. See Kentucky Statutes 446.010
- Person: means a person, partnership, firm, corporation, association, trust, estate, or other legal entity. See Kentucky Statutes 190.010
- State: when applied to a part of the United States, includes territories, outlying possessions, and the District of Columbia. See Kentucky Statutes 446.010
(b) Any personal or financial data which it has requested;
serve upon the designated family member and the commission, notice of its refusal to honor the succession and its intent to discontinue the existing franchise with the dealer no sooner than ninety (90) days from the date such notice is served.
(2) The notice provided in subsection (1) of this section must state the specific grounds for the refusal to honor the succession and of its intent to discontinue the existing franchise with the new motor vehicle dealer no sooner than ninety (90) days from the date such notice is served.
(3) If notice of refusal and discontinuance as provided in subsection (1) of this section is not timely served upon the family member, the franchise shall continue in effect subject to termination only as otherwise permitted by KRS § 190.045.
(4) In determining whether good cause for the refusal to honor the succession exists, the manufacturer, distributor, factory branch, or importer has the burden of proving before the commission that the successor is a person who is not of good moral character or does not meet the franchisor’s existing and reasonable standards, and considering the volume of sales and service of the new motor vehicle dealership, the uniformly applied business experience standards in the market area.
Effective: July 15, 1996
History: Amended 1996 Ky. Acts ch. 111, sec. 4, effective July 15, 1996. — Created
1982 Ky. Acts ch. 373, sec. 11, effective July 15, 1982.