{"data":{"id":"us-ky/krs-190.070","jurisdiction":"us-ky","citation":"KRS 190.070","heading":"Prohibited practices on the part of a manufacturer, distributor, factory","body":"branch, or factory representative.\n(1) It shall be a violation of this section for any manufacturer, distributor, factory\nbranch, or factory representative licensed unde r this chapter, either directly or\nindirectly, to require any new motor vehicle dealer in the Commonwealth:\n(a) To order or accept delivery of any motor vehicle, part or accessory thereof,\nappliances, equipment, or any other product not required by law, wh ich shall\nnot have been voluntarily ordered by the new motor vehicle dealer; except\nthat this section is not intended to modify or supersede any terms or\nprovisions of the franchise requiring new motor vehicle dealers to market a\nrepresentative line of tho se motor vehicles which the manufacturer or\ndistributor is publicly advertising;\n(b) To order or accept delivery of any new motor vehicle with special features,\nappliances, accessories, or equipment not included in the list price of the\nmotor vehicle, as publicly advertised by the manufacturer or distributor;\n(c) To order for any person any parts, accessories, equipment, machinery tools,\nappliance, or any commodity whatsoever not required in connection with a\nrecall campaign;\n(d) To participate monetarily i n an advertising campaign or contest, any\npromotional materials, training materials, showroom or other display\ndecorations, or materials, at the expense of the dealer, without the consent of\nthe dealer;\n(e) To enter into any agreement with the manufacturer , distributor, factory\nbranch, or factory representative, or to do any other act prejudicial to the new\nmotor vehicle dealer by threatening to cancel a franchise or any contractual\nagreement existing between the dealer and the manufacturer, distributor,\nfactory branch, or factory representative. Notice in good faith to any dealer of\nthe dealer's violation of any terms or provisions of the dealer's franchise, or\ncontractual agreement shall not constitute a violation of this law;\n(f) To change the capital str ucture of the dealership, or the means by or through\nwhich the dealer finances the operation of the dealership, provided that the\ndealership at all times meets any reasonable capital standards agreed to by the\ndealer, excluding any entity engaged primarily  in providing financing or\ninsurance on motor vehicles;\n(g) To refrain from participation in the management or investment in, or the\nacquisition of any other line of new motor vehicle or related products;\nprovided, however, that this section does not apply  unless the new motor\nvehicle dealer maintains a reasonable line of credit for each make or line of\nnew motor vehicles, and that the new motor vehicle dealer remains in\nsubstantial compliance with the terms and conditions of the franchise and with\nany reas onable facility requirements of the manufacturer, and no change is\nmade in the principal management of the new motor vehicle dealership;\n(h) To change the location of the dealership or, during the course of the\nagreement, make any substantial alterations t o the same components of the\ndealership premises:\n1. Within ten (10) years of a previously required improvement, alteration,\nor construction to those same components; or\n2. When to do so, would be unreasonable in light of the current economic,\npolitical, and social considerations;\n(i) To prospectively assent to a release, assignment, novation, waiver, or estoppel\nwhich would relieve any person from liability to be imposed by this law, or to\nrequire any controversy between a dealer and a manufacturer, distributor, or\nrepresentative, to be referred to any person other than the duly constituted\ncourts of the Commonwealth or the United States of America, or to the\ncommissioner, if the referral would be binding upon the dealer;\n(j) To establish or maintain exclusive facilities, personnel, display space, or\nsignage for a new motor vehicle make or line; or\n(k) To expand facilities without making available a sufficient supply of new\nmotor vehicles to support the expansion in light of the market and economic\nconditions.\n(2) It shall be a violation of this section for any manufacturer, distributor, factory\nbranch, or factory representative, either directly or indirectly:\n(a) To delay, ref use, or fail to deliver motor vehicles, or vehicle parts or\naccessories in reasonable quantities relative to the new motor vehicle dealer's\nfacilities and sales potential in the new motor vehicle dealer's relevant market\narea, and within a reasonable time,  but in any case no more than sixty (60)\ndays, after receipt of an order from a dealer having a franchise for the retail\nsale of any new vehicle sold or distributed by the manufacturer or distributor,\nany new vehicle, parts, or accessories to new vehicles as are covered by the\nfranchise, if the vehicle, parts, or accessories are publicly advertised as being\navailable for delivery or actually being delivered. The delivery to another\ndealer of a motor vehicle of the same model and identically equipped as the\nvehicle ordered by a motor vehicle dealer who has not received delivery\nthereof, but who had placed his or her written order for the vehicle prior to the\norder of the dealer receiving the vehicle, shall be prima facie evidence of a\ndelayed delivery of, or refusal to deliver, a new motor vehicle to a motor\nvehicle dealer within sixty (60) days, without cause. This section is not\nviolated, however, if the failure is caused by acts or causes beyond the control\nof the manufacturer, distributor, factory branch, or factory representative;\n(b) To refuse to disclose to any new motor vehicle dealer, handling the same line\nmake, the manner and mode of distribution of that line make within the\nrelevant market areas;\n(c) To prevent or attempt to prevent a dealer from re ceiving fair and reasonable\ncompensation for the value of the franchised business. There shall not be a\ntransfer or assignment of the dealer's franchise without the consent of the\nmanufacturer or distributor, which consent shall not be unreasonably\nwithheld;\n(d) To receive money, goods, services, or any other benefit from any vendor on\naccount of a transaction between the dealer and the vendor with whom the\ndealer does business on the recommendation or requirement of the\nmanufacturer or distributor, other t han for compensation for services\nrendered, unless the benefit is promptly accounted for, and transmitted to the\ndealer, excluding any entity engaged primarily in providing financing or\ninsurance on motor vehicles;\n(e) To increase prices of motor vehicles which the dealer had ordered for private\nretail customers prior to the dealer's receipt of the written official price\nincrease notification, a sales contract signed by a private retail consumer shall\nconstitute evidence of each order, provided that the vehicle is in fact delivered\nto the customer. In the event of manufacturer price reductions, the amount of\na reduction received by a dealer shall be passed on to the private retail\nconsumer by the dealer, if the retail price was negotiated on the basis of the\nprevious higher price to the dealer. Price reductions shall apply to all vehicles\nin the dealer's inventory which were subject to the price reduction. Price\ndifferences applicable to new model or series motor vehicles at the time of the\nintroduction of ne w models or series shall not be considered a price increase\nor price decrease. Price changes caused by the following shall not be subject\nto the provisions of this section:\n1. The addition to a motor vehicle of required or optional equipment\npursuant to state or federal law;\n2. Revaluation of the United States dollar, in the case of foreign -make\nvehicles or components; or\n3. Increased transportation charges due to an increase in the rate charged\nby common carrier or transporter;\n(f) To offer any refunds or other types of inducements to any person for the\npurchase of new motor vehicles of a certain line make to be sold to the state or\nany political subdivision thereof, without making the same offer, upon written\nrequest, to all other dealers in the same line make within the relevant market\narea;\n(g) To release to any outside party, except under subpoena, any administrative,\njudicial or arbitration proceedings, or any business, financial, or personal\ninformation which may be, from time to time, provided by the dealer to the\nmanufacturer, without the express written consent of the dealer;\n(h) To deny any dealer the right of free association with any other dealer for any\nlawful purpose;\n(i) To establish or maintain a relationship, on the part of a manufacturer,\ndistributor, factory branch, or factory representative, where the voting rights\nexceed a simple majority;\n(j) To own, operate, or control any motor vehicle dealership in the\nCommonwealth; however, this subsection shall not prohibit:\n1. The operation by any m anufacturer of a dealership for a temporary\nperiod, not to exceed one (1) year, during the transition from one (1)\nowner to another;\n2. The ownership or control of a dealership by a manufacturer while the\ndealership is being sold under a bona fide contract  or purchase option to\nthe operator of the dealership; or\n3. The ownership, operation, or control of a dealership by a manufacturer\nif the licensor determines after a hearing at the request of any party, that\nthere is not a dealer who is independent of the  manufacturer available in\nthe community or trade area to own and operate the franchise in a\nmanner consistent with the public interest;\n(k) To compete without good faith with a new motor vehicle dealer in the same\nline make, operating under an agreement o r franchise from the\naforementioned manufacturer, distributor, factory branch, or factory\nrepresentative in the relevant market area. A manufacturer, distributor, factory\nbranch, or factory representative shall not, however, be deemed to be\ncompeting when operating a dealership, either temporarily for a reasonable\nperiod, not to exceed one (1) year, or in a bona fide retail operation which is\nfor sale to any qualified independent person at a fair and reasonable price, or\nin a bona fide relationship in which  an independent person has made a\nsignificant investment, subject to loss in the dealership, and can reasonably\nexpect to acquire full ownership of such dealership on reasonable terms and\nconditions;\n(l) To offer to sell or to sell, directly or indirectly,  at retail, any new motor\nvehicle to a consumer in the Commonwealth, except through a new motor\nvehicle dealer holding a franchise for the line make covering the new motor\nvehicle. The prohibition in this paragraph shall not apply to manufacturer or\nfranchisor sales of new motor vehicles to the federal government, charitable\norganizations, or fleet customers, but shall apply to any sale of a new motor\nvehicle to employees of the manufacturer or franchisor;\n(m) To fail to assign any retail vehicle reservatio n, request to purchase, or lease\nreceived by the manufacturer from a resident of the Commonwealth to the\nfranchised dealer designated by the customer or, if no designation is made, to\nthe franchised dealer in the closest proximity to the consumer, and for which\nthe franchised dealer is otherwise in compliance with the franchise agreement\nand authorized to sell the make and model based on applicable standards and\nrequirements that include but are not limited to any facility, technology, or\ntraining requirements necessary to sell or service the vehicle, so long as the\nstandards and requirements are compliant with the applicable laws and\nregulations. Nothing in this paragraph shall require a manufacturer or\ndistributer to allocate or supply additional or supple mental inventory to a\nfranchised dealer located in the Commonwealth in order to satisfy a retail\nconsumer's reservation or request;\n(n) To unfairly discriminate among its new motor vehicle dealers with respect to\nwarranty reimbursement or authority granted  its new motor vehicle dealers to\nmake warranty adjustment with retail customers;\n(o) To fail to give consent to the sale, transfer, or exchange of the franchise to a\nqualified buyer capable of being licensed as a new motor vehicle dealer in this\nstate; pr ovided that consent may be withheld when in light of other\ncircumstances, granting the consent would be unreasonable; or\n(p) To fail to be licensed as provided in this chapter, and to maintain a bond in an\namount as determined by this chapter.\n(3) It shall be unlawful for a manufacturer, either directly or indirectly, or in\ncombination with or through any subsidiary or affiliated entity, to discriminate in\nfavor of one (1) dealer against another dealer holding a franchise for the same line\nmake of motor vehicle by furnishing to only one (1) dealer any of the following:\n(a) Any vehicle, part, or other product that is not available to each dealer at the\nsame price, including discounts, rebates, incentives, or other payments or\nallowances affecting the net price of the product;\n(b) Any vehicle, part, or other product that is not made available to each dealer in\nquantities proportionate to the demand for the vehicle, part, or other product;\n(c) Any vehicle, part, or other product that is not made available to each dealer on\ncomparable delivery terms, including time of delivery after placement of an\norder;\n(d) Any promotional or advertising payment or allowance that is not made\navailable to each dealer on proportionally equal terms;\n(e) Any opportunity to p urchase or lease from the manufacturer the dealer's\nfacility that is not made available to each dealer on terms proportionate to the\nrespective values of its facilities;\n(f) Any personnel training that is not made available to each dealer on\nproportionally equal terms;\n(g) Any inventory or other financing that is not made available to each dealer on\nproportionally equal terms, except that a manufacturer, subsidiary, or\naffiliated entity shall not be obligated to make available financing to a dealer\nwho does  not meet reasonable credit standards uniformly applied by the\nmanufacturer, subsidiary, or affiliated entity;\n(h) Any opportunity to perform work for which the dealer is entitled to be\ncompensated under this chapter that is not made available to each dealer under\nuniformly applied standards;\n(i) Any opportunity to sell products or services distributed by the manufacturer\nfor resale in connection with the line make of the motor vehicle covered by\nthe franchise that is not made available to each dealer on pr oportionally equal\nterms;\n(j) Any opportunity to establish an additional sales, service, or parts outlet that is\nnot made available to each dealer in whose relevant market area the sales,\nservice, or parts outlet will be located;\n(k) Any information concer ning the manufacturer's products, prices or other\nterms of sale, or promotional programs that is not contemporaneously\nfurnished to the dealer;\n(l) Any improvement to, or payment to the dealer for an improvement to, the\ndealer's facilities that is not made  available to each dealer on proportionally\nequal terms;\n(m) Any opportunity to sell or assign retail installment contracts or consumer\nleases to the manufacturer or the manufacturer's sales finance company\nsubsidiary that is not made available to each dea ler on proportionally equal\nterms, except that a manufacturer or sales finance company shall not be\nobligated to purchase any retail installment contract or consumer lease that\ndoes not meet reasonable credit terms uniformly applied by the manufacturer\nor sales finance company subsidiary;\n(n) Any product assistance, service, or facility in connection with the franchise\nthat is not made available to each dealer on proportionally equal terms; or\n(o) Any payment for any service or facility in connection with t he franchise that\nis not made available to each dealer on proportionally equal terms.\n(4) It shall not be a defense to an alleged violation of subsection (3) of this section, that\nan item or opportunity was offered to a dealer if the offer was conditioned upon the\ndealer meeting one (1) or more requirements that are not reasonable and necessary\nto fulfill the dealer's obligations under the franchise. The manufacturer shall have\nthe burden of proving that any requirement upon which an offer was conditioned\nwas reasonable and necessary to fulfill the dealer's obligations under the franchise\nwhen the offer was made. A requirement shall not be found to be reasonable and\nnecessary to fulfill the dealer's obligations under the franchise if the manufacturer\ncannot prove that it was within the control of each dealer to meet the requirement\nimposed on the dealer as a condition of the offer.\n(5) A dealer who alleges a good -faith belief that the dealer has been, or is being,\ndiscriminated against in violation of subsect ion (3) of this section, may demand in\nwriting that the manufacturer furnish the dealer with pertinent information\nreasonably necessary for the dealer to determine if discrimination exists. If the\nmanufacturer fails to furnish the dealer with the information demanded within thirty\n(30) days of the manufacturer's receipt of the dealer's written demand, the\nmanufacturer shall have, in any subsequent legal proceeding, the burden of proving\nthat the alleged violation has not occurred.\n(6) Any dealer who is disc riminated against by a manufacturer in violation of\nsubsection (3) of this section shall recover three (3) times an amount equal to the\nvalue of what the dealer would have received if the manufacturer had complied\nwith subsection (3) of this section upon f urnishing any item or opportunity to\nanother dealer.\n(7) A change in ownership of a manufacturer or distributor that contemplates a\ncontinuation of that line make in the state shall not directly or indirectly, through\nactions of any parent of the manufactu rer or distributor, subsidiary of the\nmanufacturer or distributor, or common entity cause a termination, cancellation, or\nnonrenewal of a dealer agreement by a present or previous manufacturer or\ndistributor of an existing agreement unless the manufacturer or distributor offers the\nnew vehicle dealer an agreement substantially similar to that offered to other\ndealers of the same line make.","path":["KRS Chapter 190"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=54014","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:51:45Z","sha256":"ae6576217e4441d67462f3b9ee55e68861900f26c7598a16114f624e65c573aa","source_id":"us-ky","stale":false,"prev":"us-ky/krs-190.067","next":"us-ky/krs-190.071"},"notice":"GroundRules: Original legal text. Not legal advice."}