KRS 190.047: Transfer of motor vehicle sales franchise -- Proposal to establish additional

dealership or to relocate existing dealership.

(1) Unless a franchise specifically states to the contrary, no franchise or any interest in a

franchise may be sold, transferr ed, or assigned without the approval of the

manufacturer or distributor.

(2) A dealer desiring to sell, transfer, or assign all or any portion of his franchise shall

submit a written proposal of the sale, transfer, or assignment to the manufacturer or

distributor, and approval of the proposal shall not be arbitrarily or unreasonably

withheld.

(3) The refusal of the manufacturer or the distributor to approve a proposed sale,

transfer, or assignment shall be subject to review by the licensor, if a written

application for review is filed with the licensor, with notice to the manufacturer or

distributor, within thirty (30) days of the date of the refusal. The refusal shall not be

final until the licensor, after a hearing has been held in accordance with the

provisions of KRS Chapter 13B, has determined that the approval was not

arbitrarily or unreasonably withheld.

(4) The burden of proof shall be on the dealer to show that the approval of the sale,

transfer, or assignment of any interest in the franchise was arb itrarily or

unreasonably withheld. Factors to be considered in determining whether the

manufacturer or distributor acted arbitrarily or unreasonably shall include whether

the basic financial and facility requirements of the franchise will be met by the

proposed transfer, sale, or assignment and that the proposed purchaser, transferee,

or assignee is capable of operating, managing, and supervising the operation of the

business in question.

(5) Failure of the manufacturer or distributor to abide by the final order of the licensor

or to continue the franchise in effect pending the final determination of the issue by

the licensor shall be cause for the licensor to refuse to issue a subsequent license in

the same county or franchise area to an applicant who will be selling the same

motor vehicles as the former dealer for the same manufacturer or distributor.

(6) If a manufacturer, distributor, factory branch, or factory representative seeks to:

(a) Enter into a franchise establishing an additional new motor vehicl e dealership

facility;

(b) Establish an additional new motor vehicle dealership facility under an existing

franchise; or

(c) Relocate an existing new motor vehicle dealership facility, within or into a

relevant market area where the same line make is then represented,

the manufacturer, distributor, factory branch, or factory representative shall, in

writing, first notify the licensor, and each new motor vehicle dealer in the line make

in the relevant market area, of the intention to establish an additional new motor

vehicle dealership facility, or to establish an additional new motor vehicle

dealership facility under an existing franchise, or to relocate an existing new motor

vehicle dealership facility within or into that market area. The relevant market a rea

shall be a radius of ten (10) miles around an existing new motor vehicle dealership

facility. Within fifteen (15) days of receiving the notice, or within fifteen (15) days

after the end of any appeal procedure provided by the manufacturer, distributor,

factory branch, or factory representative, any new motor vehicle dealership may file

with the licensor a protest to the establishment or relocation of the new motor

vehicle dealership facility. When a protest is filed, the licensor shall inform the

manufacturer, distributor, factory branch, or factory representative that a timely

protest has been filed and that the manufacturer, distributor, factory branch, or

factory representative shall not establish or relocate the proposed new motor vehicle

dealership facility until the licensor has held a hearing in accordance with KRS

Chapter 13B, if the licensor has determined that there is good cause for permitting

the new motor vehicle dealership facility. For the purposes of this section, the

reopening in a releva nt market area of a new motor vehicle dealership that has not

been in operation for two (2) years or more shall be deemed the establishment of an

additional new motor vehicle dealership facility.

(7) In determining whether good cause has been established f or entering into an

additional franchise for the same line make, or establishing an additional new motor

vehicle dealership facility under an existing franchise, or relocating an existing new

motor vehicle dealership facility within or into a relevant mark et area where the

same line make is then represented, the licensor shall take into consideration the

existing circumstances, including, but not limited to:

(a) Permanency of the investment;

(b) Whether the new motor vehicle dealer of the same line make in that relevant

market area is providing adequate competition and convenient consumer care

for the motor vehicles of the line make in the market area, which shall include

the adequacy of motor vehicle sales and service facilities, equipment, supply

of vehicle parts, and qualified service personnel; and

(c) Growth, or decline in population and new car registrations in the relevant

market areas.

In the case of the establishment of an additional new motor vehicle dealership

facility under an existing franchise, good cause shall not be found if the additional

facility fails to offer a range of service, including, but not limited to sales, service,

parts, and financing.

(8) Any parties to a hearing by the licensor concerning the establishing or relocating of

a new motor vehicle dealership shall have a right of judicial review of the final

order in accordance with KRS Chapter 13B.

(9) The provisions of this section shall apply to the personal representative, executor, or

administrator of the estate of an individual who had an interest in a franchise, or to

the guardian or conservator of an individual who has been declared mentally

disabled and who has that interest for one (1) year following appointment.

(10) The provisions of this section do not apply to:

(a) The relocation of an existing dealership within that dealer's area of

responsibility contained in its franchise agreement, provided the relocation is

not within five (5) miles of a new motor vehicle dealer of the same line make;

or

(b) The relocation of an existing new motor vehicle dealership facility to a site

that is further away from an existing dealership of the same line make.