New motor vehicle dealership, restrictions on operation of or ownership by a franchisor
A car company (called a franchisor, meaning the one who makes and brands the cars) is not allowed to own or run its own car dealership in Missouri. There are a couple of exceptions: it can run a dealership for up to 24 months (sometimes up to 36 months with good cause) while trying to sell it to an independent buyer, or it can be part of a real partnership where an independent person puts their own money at risk and is working toward owning the dealership fully. A car company also cannot sell new cars directly to regular customers — sales must go through a franchisee (an independent dealer). There are some narrow exceptions for certain engine manufacturers that meet specific conditions. A company can also own a small piece (up to 45%) of an entity that owns dealerships of its same brand, but only if several strict conditions are all met at the same time.
407.826. New motor vehicle , on operation of or ownership by a . — 1. (1) A franchisor shall be prohibited from owning or operating a new motor vehicle dealership in this state. It is not a violation of this section for a franchisor to own or operate a new motor vehicle dealership:
(a) For a temporary period of not more than twenty-four months if the dealership is for sale at a reasonable price and on reasonable terms and conditions to an qualified buyer. On showing by a franchisor of , the time limit set forth above may be extended for an additional period of up to twelve months; or
(b) In a relationship with an independent person (i) who is required to make a significant investment in the new motor vehicle dealership subject to loss and (ii) operates the dealership and can reasonably expect to acquire full ownership of the dealership within a reasonable time and under reasonable terms and conditions.
(2) Nothing in this section shall be to prohibit a franchisor from owning a in an that owns motor vehicle dealerships of the same d and by the factory, provided that all of the following conditions are met at the time of acquisition and continue to be met during the time the entity maintains ownership:
(a) The interest owned by the factory in said entity shall not exceed forty-five percent of the total ownership;
(b) Any dealership in which the entity owns an interest shall be no less than nine miles of any unaffiliated new motor vehicle dealership trading in the same line-make of vehicle;
(c) All of the licensed dealerships for the sale of such factory's new motor 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 s governing such line-make with s licensed to do business in this state;
(e) All the factory's franchise agreements confer rights on the of the line-make to develop and operate, within a defined geographic territory or area, as many dealership facilities as the franchisee and factory shall agree are ;
(f) At the time the entity first acquires an ownership interest, not fewer than seventy-five percent of the franchisees of the line-make within this state own and operate two or more dealership facilities in the geographic territory or area covered by the franchise agreement with the factory;
(g) As of January 1, 2001, there were no more than ten dealerships of such 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 of motor vehicles of its own line-make through direct or indirect ownership of dealerships in at least five states.
2. A franchisor shall not sell new motor vehicles directly to any except through a franchisee for the line-make that includes the new motor vehicle unless such is an employee of the franchisor, or is a or an agency of the federal, state or local governments. This shall not a franchisor from providing to consumers for the purpose of marketing or the sale of a new motor vehicle or from establishing programs to sell or offer to sell new motor vehicles through participating franchisees. This subsection shall not apply to a franchisor who does not manufacture, , or sell motor vehicles as defined in section 301.010, but who does manufacture engines for any such motor vehicle with a of more than sixteen thousand that is for operation on the public highways of this state under chapter 301, provided the franchisor:
(1) Is not otherwise a of motor vehicles, as defined in section 407.815, and is not owned or controlled by such a manufacturer;
(2) Owned, operated, or controlled a facility in this state as of January 1, 2016, to sell or provide to engines that it manufactured;
(3) Does not own, operate, or control more than seven facilities in this state which sell or provide warranty service for engines it ; and
(4) Provides its franchisees or dealers with access to support for completing repairs substantially equal to the support the manufacturer provides to facilities owned, operated, or controlled by it, including but not limited to parts and assemblies, training and technical bulletins, and other information concerning installation and repairs for its engines.
3. The and available section 407.835 shall apply to this section.
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Source & history notes
(L. 2001 H.B. 575, A.L. 2017 S.B. 329)
Legal information, not legal advice. Always confirm with the official source at revisor.mo.gov.