Committee hears bill to give powersports dealers ability to sever franchise agreements

The House Committee on Economic Development heard testimony on House Bill 969, sponsored by Representative Knight, which supporters said would allow powersports dealers to sever franchise agreements in limited circumstances and obtain protections similar to other vehicle dealers.

Doug Smith, president and CEO of the Missouri Automobile Dealers Association, told the committee the bill would "allow a franchisee to sever ties with a franchise that they feel is not living up to their potential," pointing to examples such as manufacturer insolvency or failures of support. "We're very supportive of this bill," Smith said. Smith described the current situation as one in which manufacturers — not dealers — hold most leverage in franchise relationships.

Sam Mclater, who said he represents the powersports section of the Missouri Auto Dealers Association, described historical changes to franchise protections and told the committee the issue ‘‘needs to be fixed’’ for smaller powersports dealers whose investments can represent their life savings. Committee members asked questions about standard contract terms, repurchase obligations for inventory when a contract is terminated for cause, and whether powersports dealers operate under exclusivity rules; witnesses said contract lengths and territorial protections vary by manufacturer and that many powersports dealers may also sell multiple brands from one location.

No opponents registered in the transcript excerpt. The committee concluded the hearing after questions from members and testimony from industry representatives. The transcript shows no committee vote on HB 969 in the provided span.