{"data":{"id":"us-ky/krs-190.045","jurisdiction":"us-ky","citation":"KRS 190.045","heading":"Cancellation, termination, refusal to renew franchise -- Notice -- Duty of","body":"manufacturer.\n(1) Notwithstanding the terms, provisions, or conditions of any franchise or\nnotwithstanding the terms or provisions of any waiver, a manufacturer shall not\ncancel, terminate, or fail to renew any franchise with a licensed new motor vehicle\ndealer unless the manufacturer has:\n(a) Satisfied the notice requirement of subsection (4) of this section;\n(b) Has good cause for cancellation, termination, or nonrenewal;\n(c) Has acted in good faith; and\n(d) Has established the requirements of this subsection in proceedings before the\nlicensor if the action is protested by the new motor vehicle dealer within:\n1. Thirty (30) days after receiving notice of the cancellati on, termination,\nor nonrenewal; or\n2. Fifteen (15) days for a termination for a cause listed in subsection (4)(c)\nof this section.\nWhen a protest is filed, the licensor shall inform the manufacturer, distributor,\nfactory branch, or factory representative that a timely protest has been filed and that\nthe manufacturer, distributor, factory branch, or factory representative shall not\ncancel, terminate, or fail to renew any franchise with the licensed new motor\nvehicle dealer until the licensor has held a hear ing and the licensor has determined\nthat the manufacturer has met its burden under this section.\n(2) Notwithstanding the terms, provisions, or conditions of any franchise or the terms\nor provisions of any waiver, good cause shall exist for the purposes of a\ntermination, cancellation, or nonrenewal when:\n(a) There is a failure by the new motor vehicle deal er to comply with a provision\nof the franchise which provision is both reasonable and of material\nsignificance to the franchise relationship, provided that the dealer has been\nnotified in writing of the failure within one hundred eighty (180) days after\nthe manufacturer first acquired knowledge of the failure; and\n(b) If the failure by the new motor vehicle dealer, defined in paragraph (a) of this\nsubsection, relates to the performance of the new motor vehicle dealer in sales\nor service, then good cause sha ll be defined as the failure of the new motor\nvehicle dealer to comply with reasonable performance criteria established by\nthe manufacturer, if the new motor vehicle dealer was apprised by the\nmanufacturer in writing of a failure, and\n1. The notification s tated that notice was provided of failure of\nperformance pursuant to this section;\n2. The new motor vehicle dealer was afforded a reasonable opportunity,\nfor a period of not less than six (6) months, to comply with the criteria;\nand\n3. The new motor vehicl e dealer did not demonstrate substantial progress\ntoward compliance with the manufacturer's performance criteria during\nthe designated period.\n(3) The manufacturer shall have the burden of proof under this section.\n(4) Notwithstanding the terms, provisions , or conditions of any franchise prior to the\ntermination, cancellation, or nonrenewal of any franchise, the manufacturer shall\nfurnish notification of a termination, cancellation, or nonrenewal to the new motor\nvehicle dealer as follows:\n(a) In the manner described in subsection (2)(b) of this section; and\n(b) In not less than ninety (90) days prior to the effective date of the termination,\ncancellation or nonrenewal; or\n(c) In not less than fifteen (15) days prior to the effective date of a termination,\ncancellation, or nonrenewal with respect to any of the following:\n1. Insolvency of the new motor vehicle dealer, or filing of any petition by\nor against the new motor vehicle dealer under any bankruptcy or\nreceivership law;\n2. Failure of the new motor vehic le dealer to conduct its customary sales\nand service operations during its customary business hours for seven (7)\nconsecutive business days, except for acts of God or circumstances\nbeyond the direct control of the new motor vehicle dealer;\n3. Fraudulent mi srepresentation by the new motor vehicle dealer to the\nmanufacturer or distributor which is material to the franchise;\n4. Conviction of the new motor vehicle dealer, or any owner or operator\nthereof, of any felony which is punishable by imprisonment; or\n5. Revocation of any license which the new motor vehicle dealer is\nrequired to have to operate a dealership;\n(d) In not less than one hundred eighty (180) days prior to the effective date of a\ntermination or cancellation where the manufacturer or distributor  is\ndiscontinuing the sale of the product line.\n(5) Notification under this section shall be in writing by certified mail or personally\ndelivered to the new motor vehicle dealer; and shall contain:\n(a) A statement of intent to terminate, cancel, or not to renew the franchise; and\n(b) A statement of the reasons for the termination, cancellation, or nonrenewal;\nand\n(c) The date on which the termination, cancellation, or nonrenewal takes effect.\n(6) Upon the termination, nonrenewal, or cancellation of any fran chise, pursuant to this\nsection, the new motor vehicle dealer shall be allowed fair and reasonable\ncompensation by the manufacturer for the:\n(a) New current model year motor vehicle inventory which has been acquired\nfrom the manufacturer, and which has not  been damaged or altered while in\nthe dealer's possession;\n(b) Supplies and parts which have been acquired from the manufacturer;\n(c) Equipment and furnishings provided the new motor vehicle dealer purchased\nfrom the manufacturer or its approved sources; and\n(d) Special tools.\nFair and reasonable compensation shall be paid by the manufacturer within ninety\n(90) days of the effective date of termination, cancellation, or nonrenewal, provided\nthe new motor vehicle dealer has clear title to the inventory and other items and is\nin a position to convey that title to the manufacturer.\n(7) In the event of a termination, cancellation, or nonrenewal under this section, and the\nnew motor vehicle dealer is leasing the dealership facilities from a lessor other than\nthe manufacturer, or owns the dealership facilities, the manufacturer shall pay a\nreasonable rent to the dealer in accordance with and subject to subsection (8) of this\nsection.\n(8) (a) Reasonable rental value shall be paid only to the extent the dealership\npremises are recognized in the franchise and only if they are:\n1. Used solely for performance in accordance with the franchise; and\n2. Not substantially in excess of those facilities recommended by the\nmanufacturer.\n(b) If the facilities are owned by the dealer, the manufacturer will either:\n1. Locate a purchaser who will offer to pur chase the dealership facilities at\na reasonable price; or\n2. Locate a lessee who will offer to lease the premises for a reasonable\nterm at a reasonable rent; or\n3. Failing the foregoing, lease the dealership facilities at a reasonable\nrental value for one (1) year.\n(c) If the facilities are leased by the dealer, the manufacturer will either:\n1. Locate a tenant or tenants satisfactory to the lessor, who will sublet or\nassume the balance of the lease; or\n2. Arrange with the lessor for the cancellation of the lease without penalty\nto the dealer; or\n3. Failing the foregoing, lease the dealership facilities at a reasonable rent\nfor one (1) year.\n(d) The manufacturer shall not be obligated to provide assistance under this\nsection if the dealer:\n1. Fails to accept a bona fide offer from a prospective purchaser, sublessee,\nor assignee; or\n2. Refuses to execute a settlement agreement with the lessor if the\nagreement would be without cost to the dealer; or\n3. Fails to make a written request for assistance under this se ction within\none (1) month of the termination, cancellation, or nonrenewal.\n(e) If, in an action for damages under this section, the manufacturer or distributor\nfails to prove either that the manufacturer or distributor has acted in good faith\nor that ther e was good cause for the franchise termination, cancellation, or\nnonrenewal, then the manufacturer or distributor may terminate, cancel, or fail\nto renew the franchise upon payment to the new motor vehicle dealer of an\namount equal to the value of the dealership as an ongoing business location.\n(9) Notice of termination to a dealer shall entitle the dealer to continue the franchise\nand the dealer may attempt to sell the franchise until all of the dealer's appeal rights\nhave been exhausted.","path":["KRS Chapter 190"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=57083","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:51:45Z","sha256":"ccbf85089d94d711efb0ee1b1069d67c6508596ab1c683740e4cfb4ec4dbdfa5","source_id":"us-ky","stale":false,"prev":"us-ky/krs-190.043","next":"us-ky/krs-190.0451"},"notice":"GroundRules: Original legal text. Not legal advice."}