HB412--FRANCHISORWARRANTYDUTIES
SPONSOR: Casteel
Thisbillrepealsthecurrentlawrequirementforthescheduleof
compensationafranchisorprovidestoafranchiseerelatingto
parts,laborandservice,andthetimeforperformanceofthelabor
andservicebyafranchiseeforpreparation,deliveryandwarranty
service. Further,thebillrepealsthedeterminationofwhatis
consideredareasonablecompensationforlaborandservice,where
theprincipalfactoristheprevailingwageratesbeingchargedfor
similarlaborandservicebythefranchiseetoretailcustomersfor
non-warrantylaborandservice.
Thebillprovidesthatthecompensationforpartsusedinwarranty
servicemustbereasonable. Theprimaryfactorusedindetermining
reasonablecompensationforpartschargedistheamountchargedby
thefranchiseeforsimilarpartstoretailcustomersfornon-
warrantyrepairparts.Compensationforlaborusedinthewarranty
servicemustbereasonableanddeterminedatthedealer'selection
asfullyspecifiedinthebill.
Further,ifafranchisorfurnishesapartorcomponenttoa
franchiseeatnocost,forrepairsperformedunderarecall,
campaignserviceaction,orwarrantyrepair,thecompensationwill
beareasonableamountandtheprimaryfactorindeterminingthe
reasonablecompensationforpartsistheamountchargedbythe
franchiseeforsimilarpartstoretailcustomersfornon-warranty
repairparts.Thecurrentcompensationmechanismusingtheaverage
markuponthecostofthepartinthepricescheduleofthe
franchisorlessthecostofthepartorcomponentisrepealed.