SB 433 - This act contains new provisions governing motorcycle franchises, including a definitional section. The act provides that any person engaged in motorcycle sales or a motorcycle franchise in the state is subject to jurisdiction within the state upon service of process as provided for in Section 506.510, RSMo.

An aggrieved party may file an application for hearing before the Administrative Hearing Commission, in compliance with the requirements of Chapter 536, RSMo. Procedure for such hearings is specified, including time of notice and method of service upon parties. The order providing the hearing date shall stay the complained of activity until the final decision is issued. Franchisors are entitled to request the Administrative Hearing Commission to determine whether the franchisor is acting in good faith. Franchisors shall give notice of proposed acts to terminate the franchise, prevent the franchisee from changing its capital structure, prevent transfer of a franchisee's interest, or to prevent succession of legal heirs to a franchise, according to a specified schedule, with certain exceptions.

The Administrative Hearing Commission may consolidate applications into one hearing in order to expedite disposition of relevant issues. In proceedings where the franchisor must give notice of proposed actions, the franchisor shall have the burden of proof. In all other proceedings, the burden of proof shall be on the franchisee.

It shall be unlawful for a franchisor to commit the following practices, with certain exceptions: capricious, bad faith conduct which causes damage to a franchisee or the public; to coerce a motorcycle franchisee to accept deliveries which were not ordered; to unreasonably refuse to enter into an agreement by threatening to cancel the franchise; to terminate any franchise unless a new motorcycle franchisee defaults in the performance of obligations; to prevent a franchisee from changing its capital structure, providing capital standards are met; to prevent transfer of interest of a franchise, or the changing of executive management; to impose unreasonable standards of performance or to prohibit free association; to require a waiver of liability imposed by this act or to impose a condition in violation of this act; to fail to pay reasonable compensation, as defined by this act, to a franchisee upon termination; or prevent succession by any legal heir under certain conditions; to coerce a franchisee to waive a right that a franchisee may have under this act; or to initiate any of the above acts on the grounds that the franchisor has advised a franchisee of its intention to discontinue representation at the time of a franchisee change.

A dealer shall make reasonable efforts to establish a new dealership in an area that improves the equitable distribution of dealerships within a city and is conveniently located to serve minorities who reside there. The Motor Vehicle Commission shall approve licenses for an adequate percentage of minority-owned businesses in any metropolitan area with a population of over one million.

It will be a defense for a franchisor if it is shown that the franchisee substantially failed to comply with the franchise requirements; if a franchisee or it officers have been convicted of a felony involving business honesty or practices; if a franchisee abandoned its business, is insolvent, or there has been a levy under an attachment process; or if the franchisor acted in good faith.

The remedies provided by this act are not exclusive, and a motorcycle franchisee may also bring a civil action for damages or injunctive relief.
JAMES KLAHR