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Registration of Dealers - Factory Store Provisions
Article16-Vehicle and Traffic Law
Application for Dealership Certificate of
Registration – Section 415(5) (b-2)
•
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)
•
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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NEW YORK STATE
FRANCHISE LAW
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