Missouri Revised Statutes
Chapter 407
Merchandising Practices
For more information, contact Jeff Flora.
Jeff Flora
December 30, 2003 letter to members(.pdf)
Motorcycle and ATV Franchise Practices Act
Section 407.1025
August 28, 2003
Definitions.
407.1025. As used in sections 407.1025 to 407.1049, unless the
context otherwise requires, the following terms mean:
(1) "Administrative hearing commission", the body established in chapter 621,
RSMo, to conduct administrative hearings;
(2) "All-terrain vehicle", any motorized vehicle manufactured and used
exclusively for off-highway use which is fifty inches or less in width, with an
unladen dry weight of six hundred pounds or less, traveling on three, four or
more low pressure tires, with a seat designed to be straddled by the operator,
and handlebars for steering control;
(3) "Coerce", to force a person to act in a given manner or to compel by
pressure or threat but shall not be construed to include the following:
(a) Good faith recommendations, exposition, argument, persuasion or attempts
at persuasion;
(b) Notice given in good faith to any franchisee of such franchisee's
violation of terms or provisions of such franchise or contractual agreement;
(c) Any other conduct set forth in section 407.1043 as a defense to an action
brought pursuant to sections 407.1025 to 407.1049; or
(d) Any other conduct set forth in sections 407.1025 to 407.1049 that is
permitted of the franchisor or is expressly excluded from coercion or a
violation of sections 407.1025 to 407.1049;
(4) "Franchise", a written arrangement or contract for a definite or
indefinite period, in which a person grants to another person a license to use,
or the right to grant to others a license to use, a trade name, trademark,
service mark, or related characteristics, in which there is a community of
interest in the marketing of goods or services, or both, at wholesale or retail,
by agreement, lease or otherwise, and in which the operation of the franchisee's
business with respect to such franchise is substantially reliant on the
franchisor for the continued supply of franchised new motorcycles or all-terrain
vehicles, parts and accessories for sale at wholesale or retail;
(5) "Franchisee", a person to whom a franchise is granted;
(6) "Franchisor", a person who grants a franchise to another person;
(7) "Motorcycle", a motor vehicle operated on two wheels;
(8) "New", when referring to motorcycles or all-terrain vehicles or parts,
means those motorcycles or all-terrain vehicles or parts which have not been
held except as inventory, as that term is defined in subdivision (4) of section
400.9-109, RSMo;
(9) "Person", a sole proprietor, partnership, corporation, or any other form
of business organization.
Long-arm jurisdiction, motorcycle and
all-terrain vehicle (ATV) businesses.
407.1028. Any person who is engaged or engages directly or indirectly
in purposeful contacts within the state of Missouri in connection with the
offering, advertising, purchasing, selling, or contracting to purchase or to
sell new motorcycles or all-terrain vehicles, or who, being a motorcycle or
all-terrain vehicle franchisor, is transacting or transacts any business with a
motorcycle or all-terrain vehicle franchisee who maintains a place of business
within the state and with whom the person has a franchise, shall be subject to
the jurisdiction of the courts of the state of Missouri, upon service of process
in accordance with the provisions of section 506.510, RSMo, irrespective of
whether such person is a manufacturer, importer, distributor or dealer in new
motorcycles or all- terrain vehicles.
Procedure, before
administrative hearing commission, application, notice, hearing, order, review.
407.1031. 1. Any party seeking relief pursuant to the provisions of
sections 407.1025 to 407.1049 may file an application for a hearing with the
administrative hearing commission within the time periods specified in this
section. The application for a hearing shall comply with the requirements for a
request for agency action set forth in chapter 536, RSMo. Simultaneously, with
the filing of the application for a hearing with the administrative hearing
commission, the applicant shall send by certified mail, return receipt
requested, a copy of the application to the party or parties against whom relief
is sought. Within ten days of receiving a timely application for a hearing, the
administrative hearing commission shall enter an order fixing a date, time and
place for a hearing on the record. Such hearing shall be within forty-five days
of the date of the order but the administrative hearing commission may continue
the hearing date up to twenty-five additional days by agreement of the parties
or upon a finding of good cause. The administrative hearing commission shall
send by certified mail, return receipt requested, a copy of the order to the
party seeking relief and to the party or parties against whom relief is sought.
The order shall also state that the party against whom relief is sought shall
not proceed with the initiation of its activity or activities until the
administrative hearing commission issues its final decision or order.
2. Unless otherwise expressly provided in sections 407.1025 to 407.1049, the
provisions of chapter 536, RSMo, shall govern hearings and prehearing procedures
conducted pursuant to the authority of this section. The administrative hearing
commission shall issue a final decision or order, in proceedings arising
pursuant to the provisions of sections 407.1025 to 407.1049, within forty-five
days from the conclusion of the hearing. Any final decisions shall be subject to
review pursuant to a petition for review to be filed in the court of appeals in
the district in which the hearing, or any part of the hearing, is held and by
delivery of copies of the petition to each party of record, within thirty days
after the mailing or delivery of the final decision and notice of the final
decision in such a case. Review pursuant to this section shall be exclusive and
decisions of the administrative hearing commission reviewable pursuant to this
section shall not be reviewable in any other proceeding, and no other official
or court shall have power to review any such decision by an action in the nature
of mandamus or otherwise, except pursuant to the provisions of this section. The
party seeking review shall be responsible for the filing of the transcript and
record of all proceedings before the administrative hearing commission with the
appropriate court of appeals.
3. Any franchisee receiving a notice from a franchisor pursuant to the
provisions of sections 407.1025 to 407.1049, or any franchisee adversely
affected by a franchisor's acts or proposed acts described in the provisions of
sections 407.1025 to 407.1049, shall be entitled to file an application for a
hearing before the administrative hearing commission for a determination as to
whether the franchisor has good cause for its acts or proposed acts.
4. Not less than sixty days before the effective date of the initiation of
any enumerated act pursuant to subdivisions (5), (6), (7) and (14) of section
407.1034, a franchisor shall give written notice to the affected franchisee or
franchisees, by certified mail, return receipt requested, except as follows:
(1) Upon the initiation of an act pursuant to subdivision (5) of section
407.1034, such notice shall be given not less than fifteen days before the
effective date of such act only if the grounds for the notice include the
following:
(a) Transfer of any ownership or interest in the franchised dealership
without the consent of the motorcycle or all-terrain vehicle franchisor;
(b) Material misrepresentation by the motorcycle or all-terrain vehicle
franchisee in applying for the franchise;
(c) Insolvency of the motorcycle or all-terrain vehicle franchisee or the
filing of any petition by or against the motorcycle or all-terrain vehicle
franchisee under any bankruptcy or receivership law;
(d) Any unfair business practice by the motorcycle or all-terrain vehicle
franchisee after the motorcycle or all-terrain vehicle franchisor has issued a
written warning to the motorcycle or all-terrain vehicle franchisee to desist
from such practice;
(e) Conviction of the motorcycle or all-terrain vehicle franchisee of a crime
which is a felony;
(f) Failure of the motorcycle or all-terrain vehicle franchisee to conduct
customary sales and service operations during customary business hours for at
least seven consecutive business days unless such closing is due to an act of
God, strike or labor difficulty or other cause over which the motorcycle or
all-terrain vehicle franchisee has no control; or
(g) Revocation of the motorcycle or all-terrain vehicle franchisee's license;
(2) Upon initiation of an act pursuant to subdivision (7) of section
407.1034, such notice shall be given within sixty days of the franchisor's
receipt of a written proposal to consummate such sale or transfer and the
receipt of all necessary information and documents generally used by the
franchisor to conduct its review. The franchisor's notice of disapproval shall
also specify the reasonable standard which the franchisor contends is not
satisfied and the reason the franchisor contends such standard is not satisfied.
Failure on the part of the franchisor to provide such notice shall be
conclusively deemed an approval by the franchisor of the proposed sale or
transfer to the proposed transferee. A franchisee's application for a hearing
shall be filed with the administrative hearing commission within fifteen days
from receipt of such franchisor's notice;
(3) Pursuant to paragraphs (a) and (b) of subdivision (14) of section
407.1034, such notice shall be given within sixty days of the franchisor's
receipt of a deceased or incapacitated franchisee's designated family member's
intention to succeed to the franchise or franchises or of the franchisor's
receipt of the personal and financial data of the designated family member,
whichever is later.
5. A franchisor's notice to a franchisee or franchisees pursuant to
subdivisions (5), (6), (7) and (14) of section 407.1034 shall contain a
statement of the particular grounds supporting the intended action or activity
which shall include any reasonable standards which were not satisfied. The
notice shall also contain at a minimum, on the first page thereof, a conspicuous
statement which reads as follows: "NOTICE TO FRANCHISEE: YOU MAY BE ENTITLED TO
FILE A PROTEST WITH THE MISSOURI ADMINISTRATIVE HEARING COMMISSION IN JEFFERSON
CITY, MISSOURI, AND HAVE A HEARING IN WHICH YOU MAY PROTEST THE CONTENTS OF THIS
NOTICE. ANY ACTION MUST BE FILED WITHIN FIFTEEN DAYS FROM RECEIPT OF THIS
NOTICE."
6. When more than one application for a hearing is filed with the
administrative hearing commission, the administrative hearing commission may
consolidate the applications into one proceeding to expedite the disposition of
all relevant issues.
7. In all proceedings before the administrative hearing commission pursuant
to this section and section 407.1034, where the franchisor is required to give
notice pursuant to subsection 5 of this section, the franchisor shall have the
burden of proving by a preponderance of the evidence that good cause exists for
its actions. In all other actions, the franchisee shall have the burden of
proof.
Unlawful merchandising practices by motorcycle or all-terrain vehicle (ATV)
franchisor.
407.1034. Notwithstanding the terms of any franchise agreement, the
performance, whether by act or omission, by a motorcycle or all-terrain vehicle
franchisor of any or all of the following acts enumerated in this section are
hereby defined as unlawful practices, the remedies for which are set forth in
section 407.1043:
(1) To engage in any conduct which is capricious, in bad faith, or
unconscionable and which causes damage to a motorcycle or all-terrain vehicle
franchisee or to the public; provided, that good faith conduct engaged in by
motorcycle or all-terrain vehicle franchisors as sellers of new motorcycles,
all-terrain vehicles or parts or as holders of security interests therein, in
pursuit of rights or remedies accorded to sellers of goods or to holders of
security interests pursuant to the provisions of chapter 400, RSMo, uniform
commercial code, shall not constitute unfair practices pursuant to sections
407.1025 to 407.1049;
(2) To coerce any motorcycle or all-terrain vehicle franchisee to accept
delivery of any new motorcycle, motorcycles, all-terrain vehicles, equipment,
parts or accessories therefor, or any other commodity or commodities which such
motorcycle or all-terrain vehicle franchisee has not ordered after such
motorcycle or all-terrain vehicle franchisee has rejected such commodity or
commodities. It shall not be deemed a violation of sections 407.1025 to 407.1049
for a motorcycle or all-terrain vehicle franchisor to require a motorcycle or
all-terrain vehicle franchisee to have an inventory of parts, tools and
equipment reasonably necessary to service the motorcycles or all-terrain
vehicles sold by a motorcycle or all-terrain vehicle franchisor; or new
motorcycles or all-terrain vehicles reasonably necessary to meet the demands of
dealers or the public;
(3) To unreasonably refuse to deliver in reasonable quantities and within a
reasonable time after receipt of orders for new motorcycles or all-terrain
vehicles, such motorcycles or all-terrain vehicles as are so ordered and as are
covered by such franchise and as are specifically publicly advertised by such
motorcycle or all-terrain vehicle franchisor to be available for immediate
delivery; provided, however, the failure to deliver any motorcycle or
all-terrain vehicle shall not be considered a violation of sections 407.1025 to
407.1049 if such failure is due to an act of God, work stoppage, or delay due to
a strike or labor difficulty, shortage of products or materials, freight delays,
embargo or other cause of which such motorcycle or all-terrain vehicle
franchisor has no control;
(4) To coerce any motorcycle or all-terrain vehicle franchisee to enter into
any agreement with such motorcycle or all-terrain vehicle franchisor or to do
any other act prejudicial to such motorcycle or all- terrain vehicle franchisee,
by threatening to cancel any franchise or any contractual agreement existing
between such motorcycle or all-terrain vehicle franchisor and motorcycle or
all-terrain vehicle franchisee; provided, however, that notice in good faith to
any motorcycle or all- terrain vehicle franchisee of such motorcycle or
all-terrain vehicle franchisee's violation of any provisions of such franchise
or contractual agreement shall not constitute a violation of sections 407.1025
to 407.1049;
(5) To terminate, cancel or refuse to continue any franchise, directly or
indirectly through the actions of the franchisor, unless such new motorcycle or
all-terrain vehicle franchisee substantially defaults in the performance of such
franchisee's reasonable and lawful obligations under such franchisee's
franchise, or such new motorcycle or all-terrain vehicle franchisor discontinues
the sale in the state of Missouri of such franchisor's products which are the
subject of the franchise:
(a) Notwithstanding the terms of any franchise agreement to the contrary,
good cause to terminate, cancel or refuse to continue any franchise agreement
shall not be established based upon the fact that the motorcycle or all-terrain
vehicle franchisee owns, has an investment in, participates in the management of
or holds a franchise agreement for the sale or service of another make or line
of new motorcycles or all-terrain vehicles or the motorcycle or all-terrain
vehicle dealer has established another make or line of new motorcycles or
all-terrain vehicles or service in the same dealership facilities as those of
the motorcycle or all-terrain vehicle franchisor prior to February 1, 1998, or
such establishment is approved in writing by the franchisee and the franchisor.
However, a franchisor may require a franchisee to maintain a reasonable line of
credit for each franchise and to comply with each franchisor's reasonable
requirements concerning capital, management and facilities. If the franchise
agreement requires the approval of the franchisor, such approval shall be
requested in writing by the franchisee and the franchisor shall approve or
disapprove such a request in writing within sixty days of receipt of such
request. A request from a franchisee shall be deemed to have been approved if
the franchisor fails to notify the franchisee, in writing, of its disapproval
within sixty days after its receipt of the written request;
(b) In determining whether good cause exists, the administrative hearing
commission 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, parts and
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 be
considered;
h. The harm to the franchisor;
(6) To prevent by contract or otherwise, any motorcycle or all- terrain
vehicle franchisee from changing the capital structure of the franchisee's
franchise of such motorcycle or all-terrain vehicle franchisee or the means by
or through which the franchisee finances the operation of the franchisee's
franchise, provided the motorcycle or all-terrain vehicle franchisee at all
times meets any reasonable capital standards agreed to between the motorcycle or
all-terrain vehicle franchisee and the motorcycle or all-terrain vehicle
franchisor and grants to the motorcycle or all- terrain vehicle franchisor a
purchase money security interest in the new motorcycles or all-terrain vehicles,
new parts and accessories purchased from the motorcycle or all-terrain vehicle
franchisor;
(7) (a) Prevent, by contract or otherwise, any sale or transfer of a
franchisee's franchise or franchises or interest or management thereof;
provided, if the franchise specifically permits the franchisor to approve or
disapprove any such proposed sale or transfer, a franchisor shall only be
allowed to disapprove a proposed sale or transfer if the interest being sold or
transferred when added to any other interest owned by the transferee constitutes
fifty percent or more of the ownership interest in the franchise and if the
proposed transferee fails to satisfy any standards of the franchisor which are
in fact normally relied upon by the franchisor prior to its entering into a
franchise, and which relate to the proposed management or ownership of the
franchise operations or to the qualification, capitalization, integrity or
character of the proposed transferee and which are reasonable. A franchisee may
request, at any time, that the franchisor provide a copy of the standards which
are normally relied upon by the franchisor to evaluate a proposed sale or
transfer and a proposed transferee;
(b) The franchisee and the prospective franchisee shall cooperate fully with
the franchisor in providing information relating to the prospective transferee's
qualifications, capitalization, integrity and character;
(c) In the event of a proposed sale or transfer of a franchise, the
franchisor shall be permitted to exercise a right of first refusal to acquire
the franchisee's assets or ownership if:
a. The franchise agreement permits the franchisor to exercise a right of
first refusal to acquire the franchisee's assets or ownership in the event of a
proposed sale or transfer;
b. Such sale or transfer is conditioned upon the franchisor or franchisee
entering a franchise agreement with the proposed transferee;
c. The exercise of the right of first refusal shall result in the franchisee
and the franchisee's owners receiving the same or greater consideration and the
same terms and conditions as contracted to receive in connection with the
proposed sale or transfer;
d. The sale or transfer does not involve the sale or transfer to an immediate
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 qualified manager, defined as an
individual who has been employed by the franchisee for at least two years and
who otherwise qualifies as a franchisee operator, or a partnership or
corporation controlled by such persons; and
e. The franchisor agrees to pay the reasonable expenses, including attorney's
fees which do not exceed the usual, customary and reasonable fees charged for
similar work done for other clients, incurred by the proposed transferee prior
to the franchisor's exercise of its right of first refusal in negotiating and
implementing the contract for the proposed sale or transfer of the franchise or
the franchisee's assets. Notwithstanding the foregoing, no payment of such
expenses and attorney's fees shall be required if the franchisee has not
submitted or caused to be submitted an accounting of those expenses within
fourteen days of the franchisee's receipt of the franchisor's written request
for such an accounting. Such accounting may be requested by a franchisor before
exercising its right of first refusal;
(d) For determining whether good cause exists for the purposes of this
subdivision, the administrative hearing commission shall take into consideration
the existing circumstances, including, but not limited to, the following
factors:
a. Whether the franchise agreement specifically permits the franchisor to
approve or disapprove any proposed sale or transfer;
b. Whether the interest to be sold or transferred when added to any other
interest owned by the proposed transferee constitutes fifty percent or more of
the ownership interest in the franchise;
c. Whether the proposed transferee fails to satisfy any standards of the
franchisor which are in fact normally relied upon by the franchisor prior to its
entering into a franchise, and which are related to the proposed management or
ownership of the franchise operations or to the qualification, capitalization,
integrity or character of the proposed transferee which are reasonable;
d. Injury to the public welfare;
e. The harm to the franchisor;
(8) To prevent by contract or otherwise any motorcycle or all-terrain vehicle
franchisee from changing the executive management of motorcycle or all-terrain
vehicle franchisee's business, except that any attempt by a motorcycle or
all-terrain vehicle franchisor to demonstrate by giving reasons that such change
in executive management will be detrimental to the distribution of the
motorcycle or all-terrain vehicle franchisor's motorcycles shall not constitute
a violation of this subdivision;
(9) To impose unreasonable standards of performance upon a motorcycle or
all-terrain vehicle franchisee;
(10) To require a motorcycle or all-terrain vehicle franchisee at the time of
entering into a franchise arrangement to assent to a release, assignment,
novation, waiver or estoppel which would relieve any person from liability
imposed by sections 407.1025 to 407.1049;
(11) To prohibit directly or indirectly the right of free association among
motorcycle or all-terrain vehicle franchisees for any lawful purpose;
(12) To provide any term or condition in any lease or other agreement
ancillary or collateral to a franchise, which term or condition directly or
indirectly violates the provisions of sections 407.1025 to 407.1049;
(13) Upon any termination, cancellation or refusal to continue any franchise
or any discontinuation of any line-make or parts or products related to such
line-make by a franchisor, fail to pay reasonable compensation to a franchisee
as follows:
(a) Any new, undamaged and unsold motorcycles or all-terrain vehicles in the
franchisee's inventory of either the current model year or purchased from the
franchisor within one hundred twenty days prior to receipt of a notice of
termination or nonrenewal, provided the motorcycle or all-terrain vehicle has
less than twenty miles registered on the odometer, including mileage incurred in
delivery from the franchisor or in transporting the motorcycle or all-terrain
vehicle between dealers for sale, at the dealer's net acquisition cost;
(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 the
current parts catalog, less applicable allowances. If the part or accessory was
purchased by the franchisee from an outgoing authorized franchisee, the
franchisor shall purchase the part for either the price in the current parts
catalog or the franchisee's actual purchase price of the part, whichever is
less;
(c) The depreciated value determined pursuant to generally accepted
accounting principles of each undamaged sign owned by the franchisee which bears
a trademark or trade name used or claimed by the franchisor if the sign was
purchased from, or purchased at the request of, the franchisor;
(d) The fair market value of all special tools, data processing equipment and
motorcycle or all-terrain vehicle service equipment owned by the franchisee
which were recommended in writing and designated as special tools and equipment
and purchased from, or purchased at the request of, the franchisor within three
years of the termination of the franchise, if the tools and equipment are in
usable and good condition, except for reasonable wear and tear; and
(e) The franchisor shall pay the franchisee the amounts specified in this
subdivision within ninety days after the tender of the property subject to the
franchisee providing evidence of good and clear title upon return of the
property to the franchisor. Unless previous arrangements have been made and
agreed upon, the franchisee is under no obligation to provide insurance for the
property left after one hundred eighty days;
(14) To prevent or refuse to honor the succession to a franchise or
franchises by any legal heir or devisee under the will of a franchisee, under
any written instrument filed with the franchisor designating any person as the
person's successor franchisee, or pursuant to the laws of descent and
distribution of this state; provided:
(a) Any designated family member of a deceased or incapacitated franchisee
shall become the succeeding franchisee of such deceased or incapacitated
franchisee if such designated family member gives the franchisor written notice
of such family member's intention to succeed to the franchise or franchises
within forty-five days after the death or incapacity of the franchisee, and
agrees to be bound by all of the terms and conditions of the current franchise
agreement, and the designated family member meets the current reasonable
criteria generally applied by the franchisor in qualifying franchisees. A
franchisee may request, at any time, that the franchisor provide a copy of such
criteria generally applied by the franchisor in qualifying franchisees;
(b) The franchisor may request from a designated family member such personal
and financial data as is reasonably necessary to determine whether the existing
franchise agreement should be honored. The designated family member shall supply
the personal and financial data promptly upon the request;
(c) If the designated family member does not meet the reasonable criteria
generally applied by the franchisor in qualifying franchisees, the
discontinuance of the current franchise agreement shall take effect not less
than ninety days after the date the franchisor serves the required notice on the
designated family member pursuant to subsection 5 of section 407.1031;
(d) The provisions of this subdivision shall not preclude a franchisee from
designating any person as the person's successor by written instrument filed
with the franchisor, and if such an instrument is filed, it alone shall
determine the succession rights to the management and operation of the
franchise; and
(e) For determining whether good cause exists, the administrative hearing
commission shall take into consideration the existing circumstances, including,
but not limited to, the following factors:
a. Whether the franchise agreement specifically permits the franchisor to
approve or disapprove any successor;
b. Whether the proposed successor fails to satisfy any standards of the
franchisor which are in fact normally relied upon by the franchisor prior to the
successor entering into a franchise, and which relate to the proposed management
or ownership of the franchise operation or to the qualification, capitalization,
integrity or character of the proposed successor and which are reasonable;
c. Injury to the public welfare;
d. The harm to the franchisor;
(15) To coerce, threaten, intimidate or require a franchisee under any
condition affecting or related to a franchise agreement, or to waive, limit or
disclaim a right that the franchisee may have pursuant to the provisions of
sections 407.1025 to 407.1049. Any contracts or agreements which contain such
provisions shall be deemed against the public policy of the state of Missouri
and are void and unenforceable. Nothing in this section shall be construed to
prohibit voluntary settlement agreements;
(16) To
initiate any act enumerated in this subsection on grounds that it has advised a
franchisee of its intention to discontinue representation at the time of a
franchisee change.
Relevant market area for motorcycle and all-terrain
vehicle franchises, definitions.
407.1035. 1. For purposes of this section, "relevant market area" means:
(1) For a proposed franchisee or franchisee who plans to relocate his or
her place of business in a county having a population which is greater than
one hundred thousand, the area within a radius of ten miles of the intended
site of the proposed or relocated franchisee. The ten-mile distance shall be
determined by measuring the distance between the nearest surveyed boundary of
the existing franchisee's principal place of business and the nearest surveyed
boundary line of the proposed or relocated franchisee's principal place of
business; or
(2) For a proposed franchisee or a franchisee who plans to relocate his or
her place of business in a county having a population which is not greater
than one hundred thousand, the area within a radius of twenty miles of the
intended site of the proposed or relocated franchisee, or the county line,
whichever is closer to the intended site. The twenty-mile distance shall be
determined by measuring the distance between the nearest surveyed boundary
line of the existing franchisee's principal place of business and the nearest
surveyed boundary line of the proposed or relocated franchisee's principal
place of business.
2. As used in this section, "relocate" and "relocation" shall not include
the relocation of a franchisee within two miles of its established place of
business.
3. As used in this section, "motor vehicle" shall include motorcycles and
all-terrain vehicles as defined in section 407.1025.
4. Before a franchisor enters into a franchise establishing or relocating a
franchisee within a relevant market area where the same line- make is
represented, the franchisor shall give written notice to each franchisee of
the same line-make in the relevant market area of its intention to establish
an additional franchisee or to relocate an existing franchisee within that
relevant market area.
5. Within thirty days after receiving the notice provided for in subsection
4 of this section, or within thirty days after the end of any appeal procedure
provided by the franchisor, a franchisee may bring an action pursuant to
section 407.1031 to determine whether good cause exists for the establishing
or relocating of a proposed franchisee.
6. This section shall not apply to the reopening or replacement in a
relevant market area of a closed dealership that has been closed within the
preceding year, if the established place of business of the reopened or
replacement franchisee is within two miles of the established place of
business of the closed dealership.
7. In determining whether good cause exists for establishing or relocating
an additional franchisee for the same line-make, the court shall take into
consideration the existing circumstances, including but not limited to the
following:
(1) Permanency of the investment;
(2) Effect on the retail motor vehicle business and the consuming public in
the relevant market area;
(3) Whether it is injurious or beneficial to the public welfare;
(4) Whether the franchisees of the same line-make in that relevant market
area are providing adequate competition and convenient consumer care for the
motor vehicles of that line-make in the market area, including the adequacy of
the motor vehicle sales and qualified service personnel;
(5) Whether the establishment or relocation of the franchisee would promote
competition;
(6) Growth or decline of the population and the number of new motor vehicle
registrations in the relevant market area; and
(7) Effect on the relocating franchisee of a denial of its relocations into
the relevant market area.
8. The remedies and relief available pursuant to section 407.1049 shall
apply to this section.
Location of dealerships
in City of St. Louis.
407.1037. When a franchised dealer or manufacturer proposes to
establish or relocate a motorcycle or all-terrain vehicle dealership within any
city not within a county, the dealer or manufacturer shall make reasonable
efforts to establish or relocate such dealership in an area within such city
that improves the equitable distribution of dealerships within such city and is
conveniently located to serve minorities who reside in such city.
Section 407.1040
August 28, 2003
License approval in metropolitan areas,
minorities.
407.1040. The Missouri department of revenue, in approving licenses
for dealer franchises in any metropolitan statistical area with a population of
more than one million inhabitants as defined by the federal Office of Management
and Budget or its successor agency shall ensure that the community of dealer
franchises shall reflect an adequate percentage of minority-owned businesses.
Defenses.
407.1043. It shall be a defense for a motorcycle or all-terrain
vehicle franchisor, to any action brought pursuant to sections 407.1025 to
407.1049 by a motorcycle or all-terrain vehicle franchisee, if it is shown that
such motorcycle or all-terrain vehicle franchisee has failed to substantially
comply with reasonable and lawful requirements imposed by the franchise and
other agreements ancillary or collateral thereto, or if the motorcycle or
all-terrain vehicle franchisee, or any of its officers, have been convicted of a
felony relevant to business honesty or business practices, or if the motorcycle
or all-terrain vehicle franchisee has ceased conducting its business or has
abandoned the franchise, or is insolvent as that term is defined in subdivision
(23) of section 400.1-201, RSMo, or has filed a voluntary petition in
bankruptcy, or has made an assignment for benefit of creditors, or has been the
subject of an involuntary proceeding under the Federal Bankruptcy Act or under
any state insolvency law which is not vacated within twenty days from the
institution thereof, or there has been an appointment of a receiver or other
officer having similar powers for the motorcycle or all-terrain vehicle
franchisee or the motorcycle or all-terrain vehicle franchisee's business who is
not removed within twenty days from the person's appointment, or there has been
a levy under attachment, execution or similar process which is not within ten
days vacated or removed by payment or bonding, and it shall be a defense to any
action brought pursuant to sections 407.1025 to 407.1049 that the complained of
conduct by a motorcycle or all-terrain vehicle franchisor was undertaken in good
faith in pursuit of rights or remedies accorded to a motorcycle or all-terrain
vehicle franchisor as a seller of goods or a holder of a security interest
pursuant to the provisions of chapter 400, RSMo.
False advertising
prohibited.
407.1046. No franchisee or franchisor shall use any false, deceptive
or misleading advertising.
Civil action, remedies.
407.1049. In addition to the administrative relief provided in
sections 407.1025 to 407.1049, any motorcycle or all-terrain vehicle franchisee
may bring an action in any court of competent jurisdiction against a motorcycle
or all-terrain vehicle franchisor with whom the franchisee has a franchise, for
an act or omission which constitutes an unlawful practice as defined in section
407.1034 to recover damages sustained by reason thereof, and, where appropriate,
such motorcycle or all-terrain vehicle franchisee shall be entitled to
injunctive relief, but the remedies set forth in this section shall not be
deemed exclusive and shall be in addition to any other remedies permitted by
law.
