60-1429. Franchise; termination; noncontinuation; change community; additional dealership; acts not constituting good cause.

Notwithstanding the terms, provisions, or conditions of any agreement or franchise, the following shall not constitute good cause, as used in sections 60-1420 and 60-1422, for the termination or noncontinuation of a franchise, for changing the franchisee's community, or for entering into a franchise for the establishment of an additional dealership in a community for the same line-make:

(1) The sole fact that the franchisor desires further penetration of the market;

(2) The change of ownership of the franchisee's dealership or the change of executive management of the franchisee's dealership unless the franchisor, having the burden of proof, proves that such change of ownership or executive management will be substantially detrimental to the distribution of the franchisor's motor vehicles, combination motor vehicles and trailers, motorcycles, or trailer products or to competition in the community. Substantially detrimental may include, but is not limited to, the failure of any proposed transferee or individual to meet the current criteria generally applied by the franchisor in qualifying new motor vehicle dealers; or

(3) The fact that the franchisee refused to purchase or accept delivery of any motor vehicle, combination motor vehicle and trailer, motorcycle, trailer, vehicle parts or accessories, or other commodity or service not ordered by the franchisee.

Source

Annotations

Change of ownership of a franchisee's dealership is not good cause for termination of the franchise unless the franchisor proves that the change of ownership will be substantially detrimental to the distribution of franchisor's motor vehicles in the community. S & T Motors v. General Motors Corp., 203 Neb. 188, 277 N.W.2d 701 (1979).

The term "motor vehicle" as used in this section refers to the motor vehicle covered by the franchise and does not refer to all of the motor vehicles which a franchisor may distribute through various divisions and separate franchises. S & T Motors v. General Motors Corp., 203 Neb. 188, 277 N.W.2d 701 (1979).

When the franchisee transfers its ownership, the franchisor need not recognize the transfer until after the board has had a chance to act on the issue of whether the transfer is detrimental to the distribution of franchisor's vehicles in the community. Kizzier Chevrolet Co. v. General Motors Corp., 705 F.2d 322 (8th Cir. 1983).