(a) Except as provided by this section, and notwithstanding any other provisions of the vehicle dealers and manufacturers licensing act, with respect to motor vehicles, a first stage manufacturer of vehicles or second stage manufacturer of vehicles, factory branch, distributor branch, or distributor, distributor or factory representative, may not directly or indirectly:

(1) Own an interest in a new vehicle dealer or dealership;

Terms Used In Kansas Statutes 8-2438

  • Dealer: means a vehicle dealer as defined by this act, unless the context otherwise requires. See Kansas Statutes 8-2401
  • Director: means the director of vehicles, or a designee of the director. See Kansas Statutes 8-2401
  • Distributor: means any person who sells or distributes for resale new vehicles to new vehicle dealers in this state or who maintains distributor representatives in this state. See Kansas Statutes 8-2401
  • Distributor branch: means any branch office similar to subsection (q) maintained by a distributor for the same purposes as a factory branch. See Kansas Statutes 8-2401
  • Factory branch: means any branch office maintained in this state by a first or second stage manufacturer for the sale of new vehicles to distributors, or for the sale of new vehicles to new vehicle dealers, or for directing or supervising, in whole or in part, its representatives in this state. See Kansas Statutes 8-2401
  • Factory representative: means a representative employed by a first or second stage manufacturer or factory branch for the purpose of making or promoting the sale of its new vehicles to new vehicle dealers, or for supervising or contacting its new vehicle dealers or prospective new vehicle dealers with respect to the promotion and sale of such vehicles and parts or accessories for such vehicles. See Kansas Statutes 8-2401
  • First stage manufacturer: means any person who manufactures, assembles and sells new vehicles to new vehicle dealers for resale in this state. See Kansas Statutes 8-2401
  • Franchise agreement: means any contract or franchise or any other terminology used to describe the contractual relationship between first or second stage manufacturers, distributors and vehicle dealers, by which:

    (1) A right is granted one party to engage in the business of offering, selling or otherwise distributing goods or services under a marketing plan or system prescribed in substantial part by the other party, and in which there is a community of interest in the marketing of goods or services at wholesale or retail, by lease, agreement or otherwise; and

    (2) the operation of the grantee's business pursuant to such agreement is substantially associated with the grantor's trademark, service mark, trade name, logotype, advertising or other commercial symbol designating the grantor or an affiliate of the grantor. See Kansas Statutes 8-2401

  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • motor vehicle: includes micro utility trucks, as defined in Kan. See Kansas Statutes 8-2401
  • New vehicle dealer: means any vehicle dealer who is a party to an agreement, with a first or second stage manufacturer or distributor, which agreement authorizes the vehicle dealer to sell, exchange or transfer new motor vehicles, trucks, motorcycles, or trailers or parts and accessories made or sold by such first or second stage manufacturer or distributor and obligates the vehicle dealer to fulfill the warranty commitments of such first or second stage manufacturer or distributor. See Kansas Statutes 8-2401
  • Person: means any natural person, partnership, firm, corporation or association. See Kansas Statutes 8-2401
  • Second stage manufacturer: means any person who assembles, installs or permanently affixes body, cab or special unit equipment to a chassis supplied by a first stage manufacturer, distributor or other supplier and sells the resulting new vehicles to new vehicle dealers for resale in this state. See Kansas Statutes 8-2401
  • State: when applied to the different parts of the United States, includes the District of Columbia and the territories. See Kansas Statutes 77-201
  • vehicle: includes micro utility trucks, as defined in Kan. See Kansas Statutes 8-2401
  • Vehicle dealer: means any person who: (1) For commission, money or other thing of value is engaged in the business of buying, selling or offering or attempting to negotiate a sale of an interest in vehicles; or (2) for commission, money or other thing of value is engaged in the business of buying, selling or offering or attempting to negotiate a sale of an interest in motor vehicles as an auction motor vehicle dealer as defined in subsection (bb); but does not include:

    (A) Receivers, trustees, administrators, executors, guardians, or other persons appointed by or acting under the judgment or order of any court, or any bank, trustee or lending company or institution which is subject to state or federal regulations as such, with regard to its disposition of repossessed vehicles;

    (B) public officers while performing their official duties;

    (C) employees of persons enumerated in subparagraphs (A) and (B), when engaged in the specific performance of their duties as such employees;

    (D) auctioneers conducting auctions for persons enumerated in subparagraphs (A), (B) or (C); or

    (E) auctioneers who, while engaged in conducting an auction of tangible personal property for others, offer for sale: (i) Vehicles which have been used primarily in a farm or business operation by the owner offering the vehicle for sale, including all vehicles which qualified for a farm vehicle tag at the time of sale except vehicles owned by a business engaged primarily in the business of leasing or renting passenger cars; (ii) vehicles which meet the statutory definition of antique vehicles; or (iii) vehicles for no more than four principals or households per auction. See Kansas Statutes 8-2401

(2) operate a new vehicle dealer or dealership; or

(3) act in the capacity of a new vehicle dealer or dealership, or otherwise sell new vehicles at retail.

(b) A first stage manufacturer or second stage manufacturer of vehicles, factory branch, distributor branch, or distributor, distributor or factory representative may own an interest in a franchised dealer or dealership, or otherwise control a dealership, for a period not to exceed 12 months from the date the first or second stage manufacturer of vehicles, factory branch, distributor branch, or distributor, distributor or factory representative, acquires the dealership if:

(1) The person from whom the dealer or dealership was acquired was * new vehicle dealer; and

(2) the dealership is for sale by the first stage manufacturer or second stage manufacturer of vehicles, factory branch, distributor branch, or distributor, distributor or factory representative, at a reasonable price and on reasonable terms and conditions.

(c) On a showing of good cause by a first stage manufacturer or second stage manufacturer of vehicles, factory branch, distributor branch, or distributor, distributor or factory representative, as the case may be, the director may extend the time limit set forth in subsection (b) one time for a period of not to exceed 12 months.

(d) For the purpose of broadening the diversity of its dealer body and enhancing opportunities for qualified persons who are part of a group who have historically been under-represented in its dealer body, or other qualified persons who lack the resources to purchase a dealership outright, but for no other purpose, a first stage manufacturer or second stage manufacturer of vehicles, factory branch, distributor branch, or distributor, distributor or factory representative, may temporarily own an interest in a new vehicle dealer or dealership if the first or second stage manufacturer of vehicles, factory branch, distributor branch, or distributor, distributor or factory representative’s participation in the new vehicle dealer or dealership is in a bona fide relationship with a new vehicle dealer who:

(1) Has made a significant investment in the new vehicle dealer or dealership, which is subject to loss;

(2) has an ownership interest in the new vehicle dealer or dealership; and

(3) operates the new vehicle dealer or dealership under a plan to acquire full ownership of the new vehicle dealer or dealership within a reasonable time and under reasonable terms and conditions.

(e) A first stage manufacturer of vehicles or a second stage manufacturer of vehicles may own a minority interest in an entity that owns and operates a new vehicle dealer, licensed under the dealers and manufacturer’s licensing act, of the line-make manufactured by the first or second stage manufacturer if all of the new vehicle dealers owned and operated by the entity in this state are new vehicle dealers of only the line-make manufactured by the manufacturer and if, on January 1, 2000: (1) There were not more than two new vehicle dealers of that line-make licensed as new vehicle dealers in this state; and (2) at the time the manufacturer first acquires an ownership interest or assumes operation or control, the distance between any new vehicle dealer owned and operated by an entity in which the manufacturer has an ownership interest and the nearest unaffiliated new vehicle dealer of the same line-make is not less than 100 miles.

(f) The words or phrases used in this section shall have the meanings otherwise provided by law, except the following specific words or phrases:

(1) “Dealership” means any physical premises, equipment, and business facilities on or with which a new vehicle dealer operates its business, including the sale or repair of motor vehicles. Dealership includes premises or facilities at which a person engages in the repair of motor vehicles if repairs are performed pursuant to the terms of a franchise agreement or a motor vehicle manufacturer’s warranty; and

(2) “line-make vehicle” means those new motor vehicles which are offered for sale, lease or distribution under a common name, trademark, service mark or brand name of the manufacturer or distributor of the same.

(g) The provisions of this section shall not apply to a first stage manufacturer or second stage manufacturer of vehicles, factory branch, distributor branch, or distributor, distributor or factory representative as to only those dealers or dealerships which are already owned by such first stage manufacturer or second stage manufacturer of vehicles, factory branch, distributor branch, or distributor, distributor or factory representative, as the case may be, on the effective date of this act.

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