SS SCS HB 575 -- MOTOR AND RECREATIONAL VEHICLE FRANCHISE
PRACTICES

This bill revises the motor and recreational vehicle franchise
statutes.

MOTOR VEHICLE FRANCHISE PRACTICES

Restrictions are placed on establishing or relocating a new
motor vehicle dealer within the relevant market area where the
same line make is already present.  "Relevant market area" is
defined as an area within a 6-mile radius of the intended site
in counties with a population greater than 100,000 and within a
10-mile radius in counties with a population less than 100,000.
Procedures in matters before the Administrative Hearing
Commission are revised.  If franchisor actions require "good
cause," those actions must be put on hold if the commission
determines good cause does not exist.  The franchisee may seek
enforcement of this decision in Circuit Court of Cole County.

The ability of the franchisor to request additional information
and documents from a potential buyer or transferee of a
dealership is clarified.  The bill also prohibits franchisors
from requiring franchisees to cancel or refrain from acquiring a
franchise in another line make of vehicle.  Franchisors are also
prohibited from refusing to sell franchisees every motor vehicle
in a particular line make.

The bill prohibits franchisors from owning or operating new
motor vehicle dealerships in this state except under certain
circumstances.  Franchisors are also prohibited from selling new
motor vehicles directly to consumers in most circumstances.

The bill will require franchisors to provide their franchisees
with specific information regarding warranty service, including
a schedule of compensation for warranty service.  Franchisors
are required to compensate franchisees for warranty service and
claims for labor and parts must be paid within 30 days after
approval.  Claims will be deemed approved if not specifically
disapproved within 30 days after receipt by the franchisor.
Approved claims may not be charged back unless the franchisor
can prove the claim fraudulent or unsubstantiated.  In any
event, charge backs may not occur more than 2 years after
payment of the claim.  Franchisees must also be compensated for
franchisor-sponsored sales or service promotion events.  Claims
must be approved within 30 days and paid within 10 days after
approval.

RECREATIONAL VEHICLE FRANCHISE PRACTICES

Recreational motor vehicle manufacturers and dealers will
continue to be bound by the terms of the Motor Vehicle Franchise
Practices Act until August 1, 2002.  Thereafter, they will be
bound by separate provisions relating to recreational vehicles.

All recreational vehicle manufacturers and dealers must have a
written agreement.  Manufacturers must designate, in writing,
the area of sales responsibility for dealers.  Sales of
recreational vehicles by manufacturers or distributors must be
in accordance with published prices, charges, and terms of
sale.  Manufacturers may not terminate a dealer agreement
without good cause, which is defined in the bill.  Grounds for
and procedures for termination of a dealer are established.  If
an agreement is terminated, the manufacturer is obligated to
repurchase certain items within 30 days of termination.
Procedures for a change in ownership by the dealer are
established.  Dealers will have the right to designate, in
writing, a member of their family as a successor for the
dealership in the event the dealer is not able to continue.
Conditions for warranty work are specified.  Notwithstanding any
agreement, certain actions are prohibited.  The bill includes
provisions for the operation of company-owned stores in very
limited circumstances.

The bill has an effective date of August 1, 2002, for the
Recreational Vehicle Franchise portions of the bill.

Missouri House of Representatives
Last Updated November 26, 2001 at 11:44 am