[§437-55] Establishment or relocation of franchise within relevant market area.

624 words·~3 min read·/hi/chapter-437/437-55

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(a)When a manufacturer or distributor establishes or relocates a franchise within the relevant market area of an existing dealer with a franchise for the same line make, the manufacturer or distributor shall provide a notice to such existing dealers, hereinafter "affected dealers". For the purposes of this section, "affected dealer" means a dealer that operates a same line make franchise in a relevant market area wherein the manufacturer or distributor is proposing to add or relocate a franchise. The manufacturer's or distributor's notice shall state the location of the proposed dealership and the date on or after which the franchise intends to be engaged in business.

(b)An affected dealer may file a petition in the manner prescribed in section 437-51 within thirty days of receipt of the manufacturer's or distributor's notice for determination of whether the manufacturer or distributor has good cause to establish or relocate an additional franchise within the dealer's relevant market area. When such a petition is filed, the manufacturer or distributor shall not establish or relocate the proposed franchise until a hearing has been held and a determination made whether good cause exists for the proposed addition or relocation. The determination of a petition filed under this subsection shall be made no later than one hundred eighty days from receipt of notice of the petition except for good cause. The manufacturer or distributor shall have the burden of proof to demonstrate good cause exists for the addition or relocation of an additional franchise within the affected dealer's relevant market area.

(c)In determining whether the manufacturer or distributor has good cause to add or relocate the franchise into an affected dealer's relevant market area the hearings officer under section 437-51 shall consider and make findings upon evidence including the permanency and size of investment made and the reasonable obligations incurred by the existing new motor vehicle dealers in the relevant market area; the growth or decline in population and new car registrations in the relevant market area; the effect on the consuming public in the relevant market area; whether it is injurious or beneficial to the public welfare for a new dealer to be established; whether the new motor vehicle dealers of the same line make in that area are providing adequate competition and convenient customer care for the motor vehicles of the same line make including the adequacy of motor vehicle sales and service facilities, equipment, supply of motor vehicle parts, and qualified service personnel; whether the establishment or relocation of the proposed dealership appears to be warranted and justified based on economic and marketing conditions pertinent to dealers competing in the community or territory, including anticipating future changes; the effect on the relocating dealer of a denial of its relocation into the relevant market area; and the reasonably expected market penetration of the line make motor vehicle for the community or territory involved, after consideration of all factors which may affect such penetration, including demographic factors such as age, income, education, size class preference, product popularity, retail lease transactions, or other factors affecting sales to consumers of the community or territory.

(d)This section shall not apply to the relocation of an existing dealer within two miles of the dealer's existing dealership location; the appointment of a successor dealer at the same location as its predecessor or within a two-mile radius from any boundary of the predecessor's former location within one year from the date on which the predecessor ceased operations or was terminated, whichever occurred later; or the relocation of a dealer to a site that is farther away from the protesting affected dealer than the existing location. [L 2010, c 164, pt of §2]