(a) A “franchise” is a written agreement between two or more persons having all of the following conditions:
(1) A commercial relationship of definite duration or continuing indefinite duration.
(2) The franchisee is granted the right to offer for sale or lease, or to sell or lease at retail new motor vehicles or new trailers subject to identification pursuant to Section 5014.1 manufactured or distributed by the franchisor or the right to perform authorized warranty repairs and service, or the right to perform any combination of these activities.
(3) The franchisee constitutes a component of the franchisor’s distribution system.
(4) The operation of the franchisee’s business is substantially associated with the franchisor’s trademark, trade name, advertising, or other commercial symbol designating the franchisor.
(5) The operation of a portion of the franchisee’s business is substantially reliant on the franchisor for a continued supply of new vehicles, parts, or accessories.
(b) The term “franchise” does not include an agreement entered into by a manufacturer or distributor and a person where all the following apply:
(1) The person is authorized to perform warranty repairs and service on vehicles manufactured or distributed by the manufacturer or distributor.
(2) The person is not a new motor vehicle dealer franchisee of the manufacturer or distributor.
(3) The person’s repair and service facility is not located within the relevant market area of a new motor vehicle dealer franchisee of the manufacturer or distributor.
(Amended by Stats. 2001, Ch. 539, Sec. 5. Effective January 1, 2002.)
Last modified: October 25, 2018