New York State Franchise Law For New Car Dealers

NEW YORK STATE FRANCHISE LAW HIGHLIGHTS

Registration of Dealers - Factory Store Provisions Article16-Vehicle and Traffic Law

Application for Dealership Certificate of Registration – Section 415(5) (b-2)

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• Requires an application for a dealership registration to disclose the ownership interest a manufacturer or distributor, or any affiliate or subsidiary of such a company, has in the dealership.

Issuance of Dealership Certificate of Registration – Section 415(7) (f)

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• Prohibits, with limited exceptions, any manufacturer, distributor, distributor branch and factory branch, and any subsidiary, affiliate or controlled entity, from having an interest in dealership. • Directs DMV to deny a license to factory stores that do not qualify for licenses (only those licensed before July 1, 2006 qualify). • Permits a franchisor to have an interest in a dealership but only if the interest is either (a) for a one (1) year period during which ownership of the dealership is in the process of being transferred to another dealer, or (b) shared with an independent dealer for a maximum of eight (8) years with the purpose of assisting the independent dealer develop its business. These provisions, which are also found in Vehicle and Traffic Law §463(2)(bb) were placed in section 415 to ensure enforcement by the Commissioner of Motor Vehicles. • Also permits the Commissioner to renew a registration of a manufacturer, or its subsidiary, affiliate or controlled entity, provided the certificate of registration was first issued prior to March 26, 2014, and the manufacturer or other entity produces only zero emission vehicles and has not transferred ownership to an unrelated entity. This type of franchisor may not take advantage of the 8-year dealer development option described above.

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