Unfair practices: Change in capital structure, executive management, ownership or control; compensation for value of dealership; consent not to be unreasonably withheld; time period for complying with request for consent; effect of failure to grant or deny request.
1. It is an unfair act or practice for any manufacturer, distributor or factory branch, directly or through any representative, to:
(a) Prevent or require or attempt to prevent or require by contract or otherwise any change in the capital structure of a dealer or the means by which he finances his operation if at all times the dealer meets any reasonable standards for capital previously agreed to by the dealer and the manufacturer or distributor. A dealer may not change the capital structure if it causes a change in the ownership or control of the franchised dealership, or has the effect of a sale of the franchised dealership, without the consent of the manufacturer or distributor. The consent must not be unreasonably withheld.
(b) Prevent or require or attempt to prevent or require a dealer to change his executive management.
(c) Prevent or require or attempt to prevent or require by contract or otherwise the sale or transfer of any part of the interest of the principal owner or any officer, partner or stockholder of any dealership to any other person. Except as otherwise provided in NRS 482.36396 to 482.36414, inclusive, a principal owner, officer, partner or stockholder may not cause a change in the control of the dealership or sell, transfer or assign the franchise or any right thereunder without the consent of the manufacturer or distributor. The consent must not be unreasonably withheld.
(d) Prevent or attempt to prevent a dealer from receiving fair and reasonable compensation for the value of the franchised dealership as a going concern.
2. If the consent of a manufacturer or distributor to a change of ownership or control is requested pursuant to paragraph (a) or (c) of subsection 1, the manufacturer or distributor shall grant or deny the request, in writing, within 60 days after receipt of the request. If the request is denied, the material reasons for the denial must be stated. Failure to grant or deny the request, in writing, within 60 days has the effect of granting the request.
Last modified: February 25, 2006