| 1 | 1 | | FIRSTREGULARSESSION |
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| 2 | 2 | | HOUSEBILLNO.412 |
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| 3 | 3 | | 103RDGENERALASSEMBLY |
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| 4 | 4 | | INTRODUCEDBYREPRESENTATIVECASTEEL. |
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| 5 | 5 | | 1492H.01I DANARADEMANMILLER,ChiefClerk |
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| 6 | 6 | | ANACT |
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| 7 | 7 | | Torepealsection407.828,RSMo,andtoenactinlieuthereofonenewsectionrelatingto |
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| 8 | 8 | | franchisorwarrantyduties. |
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| 9 | 9 | | BeitenactedbytheGeneralAssemblyofthestateofMissouri,asfollows: |
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| 10 | 10 | | SectionA.Section407.828,RSMo,isrepealedandonenewsectionenactedinlieu |
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| 11 | 11 | | 2thereof,tobeknownassection407.828,toreadasfollows: |
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| 12 | 12 | | 407.828.1.Notwithstandinganyprovisioninafranchisetothecontrary,each |
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| 13 | 13 | | 2franchisorshallspecifyinwritingtoeachofitsfranchiseesinthisstatethefranchisee's |
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| 14 | 14 | | 3obligationsfor[preparation,delivery,and]warrantyserviceonitsproducts.Thefranchisor |
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| 15 | 15 | | 4shallfairlyandreasonablycompensatethefranchiseeforpreparation,delivery,andwarranty |
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| 16 | 16 | | 5servicerequiredofthefranchiseebythefranchisor.[Thefranchisorshallprovidethe |
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| 17 | 17 | | 6franchiseewiththescheduleofcompensationtobepaidtothefranchiseeforparts,labor,and |
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| 18 | 18 | | 7service,andthetimeallowancefortheperformanceofthelaborandserviceforthe |
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| 19 | 19 | | 8franchisee'sobligationsforpreparation,delivery,andwarrantyservice. |
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| 20 | 20 | | 9 2.Thescheduleofcompensationshallincludereasonablecompensationfor |
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| 21 | 21 | | 10diagnosticwork,aswellasrepairserviceandlaborforthefranchiseetomeetitsobligations |
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| 22 | 22 | | 11forpreparation,delivery,andwarrantyservice.Thescheduleshallalsoincludereasonable |
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| 23 | 23 | | 12andadequatetimeallowancesforthediagnosisandperformanceofpreparation,delivery,and |
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| 24 | 24 | | 13warrantyservicetobeperformedinacarefulandprofessionalmanner.Inthedetermination |
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| 25 | 25 | | 14ofwhatconstitutesreasonablecompensationforlaborandservicepursuanttothissection,the |
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| 26 | 26 | | 15principalfactortobegivenconsiderationshallbetheprevailingwageratesbeingchargedfor |
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| 27 | 27 | | 16similarlaborandservicebythefranchiseeforsimilarlaborandservicetoretailcustomersfor |
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| 28 | 28 | | 17nonwarrantylaborandservice.] Thefranchisorshallcompensatethefranchiseefor |
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| 29 | 29 | | EXPLANATION—Matterenclosedinbold-facedbrackets[thus] intheabovebillisnotenactedandis |
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| 30 | 30 | | intendedtobeomittedfromthelaw.Matterinbold-facetypeintheabovebillisproposedlanguage. 18warrantyservicepartsandlaborrequiredofthefranchiseebythefranchisorpursuant |
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| 31 | 31 | | 19totheprovisionsofthissection. |
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| 32 | 32 | | 20 2.Compensationforpartsusedinwarrantyserviceshallbereasonable.For |
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| 33 | 33 | | 21purposesofthissection,theprimaryfactorindeterminingreasonablecompensationforparts |
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| 34 | 34 | | 22[underthissection] shallbetheamountchargedbythefranchiseeforsimilarpartstoretail |
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| 35 | 35 | | 23customersfornonwarrantyrepairparts.Afranchisormayrequestsuchdocumentationas |
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| 36 | 36 | | 24isreasonablefromthefranchiseetosubstantiatetheamountchargedbythefranchisee |
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| 37 | 37 | | 25forpartsusedinnonwarrantyrepairs,butafranchisorshallnotrequestdocumentation |
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| 38 | 38 | | 26ofatypeoramountthatisundulyorunnecessarilyburdensometothefranchisee. |
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| 39 | 39 | | 27Compensationforlaborusedinwarrantyserviceshallbereasonableandmaybe |
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| 40 | 40 | | 28determinedattheelectionofthedealerasdescribedinsubsection3ofthissection,in |
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| 41 | 41 | | 29lieuofanylaborcompensationscheduleprescribedbythefranchisor. |
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| 42 | 42 | | 30 3.Compensationforwarrantylaborshallequalthedealer'slaborratefor |
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| 43 | 43 | | 31nonwarrantyrepairsmultipliedbythetimeprovidedinwhichevergenerallyaccepted |
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| 44 | 44 | | 32industrylabortimeguideisusedbythedealerfornonwarrantycustomer-paidservice |
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| 45 | 45 | | 33repairorders.Ifnotimeguideexistsforawarrantyrepair,compensationforwarranty |
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| 46 | 46 | | 34laborshallequalthedealer'snonwarrantylaborratebeingchargedatthetimethe |
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| 47 | 47 | | 35repairiscompleted,multipliedbythetimeactuallyspenttocompletetherepairorder |
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| 48 | 48 | | 36andshallnotbelessthanthetimechargedtoretailcustomersforthesameorsimilar |
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| 49 | 49 | | 37workperformed.Compensationforwarrantylaborshallincludealldiagnostictimefor |
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| 50 | 50 | | 38repairsperformedunderthissectionincluding,butnotlimitedto,alltimespent |
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| 51 | 51 | | 39communicatingwiththemanufacturer'stechnicalassistantsorexternalmanufacturer |
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| 52 | 52 | | 40sourceinordertoprovideawarrantyrepair,andshallnotbelessthanthetimecharged |
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| 53 | 53 | | 41toretailcustomersforthesameorsimilarworkperformed. |
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| 54 | 54 | | 42 4.Afranchisorshallperformallwarrantyobligations,includingrecallnotices; |
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| 55 | 55 | | 43includeinwrittennoticesoffranchisorrecallstonewmotorvehicleownersandfranchisees |
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| 56 | 56 | | 44theexpecteddatebywhichnecessarypartsandequipmentwillbeavailabletofranchiseesfor |
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| 57 | 57 | | 45thecorrectionofthedefects;andcompensateanyofthefranchiseesinthisstateforrepairs |
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| 58 | 58 | | 46requiredbytherecall.Compensationforpartsandlaborforrecallrepairsshallbedetermined |
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| 59 | 59 | | 47under[subsection2]theprovisionsofthissection. |
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| 60 | 60 | | 48 [4.]5.Nofranchisorshallrequireafranchiseetosubmitaclaimauthorizedunderthis |
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| 61 | 61 | | 49sectionsoonerthanthirtydaysafterthefranchiseecompletesthe[preparation,delivery,or] |
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| 62 | 62 | | 50warrantyservice[authorizingtheclaimforpreparation,delivery,orwarrantyservice]. All |
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| 63 | 63 | | 51claimsmadebyafranchiseeunderthissectionshallbepaidwithinthirtydaysaftertheir |
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| 64 | 64 | | 52approval.Allclaimsshallbeeitherapprovedordisapprovedbythefranchisorwithinthirty |
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| 65 | 65 | | 53daysaftertheirreceiptonaproperformgenerallyusedbythefranchisorandcontainingthe |
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| 66 | 66 | | 54usuallyrequiredinformationtherein.Anyclaimsnotspecificallydisapprovedinwriting |
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| 67 | 67 | | HB412 2 55withinthirtydaysafterthereceiptoftheformshallbeconsidered[tobe]approvedand |
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| 68 | 68 | | 56paymentshallbemadebythefranchisorwithinfifteendaysthereafter.Afranchiseeshall |
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| 69 | 69 | | 57notberequiredtomaintaindefectivepartsformorethanthirtydaysaftersubmissionofa |
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| 70 | 70 | | 58claim. |
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| 71 | 71 | | 59 [5.]6.Afranchisorshallcompensatethefranchiseeforfranchisor-sponsoredsalesor |
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| 72 | 72 | | 60servicepromotionevents,includingbutnotlimitedto,rebates,programs,oractivitiesin |
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| 73 | 73 | | 61accordancewithestablishedwrittenguidelinesforsuchevents,programs,oractivities,which |
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| 74 | 74 | | 62guidelinesshallbeprovidedtoeachfranchisee. |
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| 75 | 75 | | 63 [6.]7.Nofranchisorshallrequireafranchiseetosubmitaclaimauthorizedunder |
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| 76 | 76 | | 64[subsection5of]thissectionsoonerthanthirtydaysafterthefranchiseebecomeseligibleto |
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| 77 | 77 | | 65submittheclaim.Allclaimsmadebyafranchisee[pursuanttosubsection5ofthissection] |
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| 78 | 78 | | 66underthissubsectionforpromotionevents,includingbutnotlimitedtorebates,programs, |
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| 79 | 79 | | 67oractivitiesshallbepaidwithintendaysaftertheirapproval.Allclaimsshallbeeither |
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| 80 | 80 | | 68approvedordisapprovedbythefranchisorwithinthirtydaysaftertheirreceiptonaproper |
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| 81 | 81 | | 69formgenerallyusedbythefranchisorandcontainingtheusuallyrequiredinformationtherein. |
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| 82 | 82 | | 70Anyclaimnotspecificallydisapprovedinwritingwithinthirtydaysafterthereceiptofthis |
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| 83 | 83 | | 71formshallbe[consideredtobe]deemedapprovedandpaymentshallbemadewithinfifteen |
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| 84 | 84 | | 72days. |
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| 85 | 85 | | 73 [7.]8.Incalculatingtheretailratecustomarilychargedbythefranchiseeforparts, |
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| 86 | 86 | | 74service,andlabor,thefollowingworkshallnotbeincludedinthecalculation: |
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| 87 | 87 | | 75 (1)Repairsforfranchisor,manufacturer,ordistributorspecialevents,specials,or |
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| 88 | 88 | | 76promotionaldiscountsforretailcustomerrepairs; |
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| 89 | 89 | | 77 (2)Partssoldatwholesale; |
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| 90 | 90 | | 78 (3)Engineassembliesandtransmissionassemblies; |
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| 91 | 91 | | 79 (4)Routinemaintenancenotcoveredunderanyretailcustomerwarranty,suchas |
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| 92 | 92 | | 80fluids,filters,andbeltsnotprovidedinthecourseofrepairs; |
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| 93 | 93 | | 81 (5)Nuts,bolts,fasteners,andsimilaritemsthatdonothaveanindividualpart |
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| 94 | 94 | | 82number; |
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| 95 | 95 | | 83 (6)Tires;and |
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| 96 | 96 | | 84 (7)Vehiclereconditioning. |
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| 97 | 97 | | 85 [8.]9.Ifafranchisor,manufacturer,importer,ordistributorfurnishesapartor |
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| 98 | 98 | | 86componenttoafranchisee,atnocost,touseinperformingrepairsunderarecall,campaign |
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| 99 | 99 | | 87serviceaction,orwarrantyrepair,thefranchisorshallcompensatethefranchiseeforthepart |
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| 100 | 100 | | 88orcomponentin[thesamemanneraswarrantypartscompensationunderthissectionby |
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| 101 | 101 | | 89compensatingthefranchiseeattheaveragemarkuponthecostforthepartorcomponentas |
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| 102 | 102 | | 90listedinthepricescheduleofthefranchisor,manufacturer,importer,ordistributor,lessthe |
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| 103 | 103 | | 91costforthepartorcomponent] anamountthatisreasonable,andtheprimaryfactorin |
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| 104 | 104 | | HB412 3 92determiningreasonablecompensationforpartsunderthissubsectionshallbethe |
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| 105 | 105 | | 93amountchargedbythefranchiseeforsimilarpartstoretailcustomersfornonwarranty |
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| 106 | 106 | | 94repairparts. Thissubsectionshallnotapplytoentireengineassemblies,propulsionengine |
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| 107 | 107 | | 95assemblies,includingelectricvehiclebatteries,orentiretransmissionassemblies. |
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| 108 | 108 | | 96 [9.]10.Afranchisorshallnotrequireafranchiseetoestablishtheretailrate |
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| 109 | 109 | | 97customarilychargedbythefranchiseeforparts,service,orlaborbyanundulyburdensomeor |
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| 110 | 110 | | 98time-consumingmethodorbyrequiringinformationthatisundulyburdensomeortime |
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| 111 | 111 | | 99consumingtoprovide,including,butnotlimitedto,part-by-partortransaction-by-transaction |
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| 112 | 112 | | 100calculations.Afranchiseeshallnotrequestafranchisortoapproveadifferentlaborrateor |
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| 113 | 113 | | 101partsratemorethantwiceinonecalendaryear. |
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| 114 | 114 | | 102 [10.]11.Ifafranchiseesubmitsanyclaimunderthissectiontoafranchisorthatis |
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| 115 | 115 | | 103incomplete,inaccurate,orlackinganyinformationusuallyrequiredbythefranchisor,thenthe |
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| 116 | 116 | | 104franchisorshallpromptlynotifythefranchisee,andthetimelimittosubmittheclaimshallbe |
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| 117 | 117 | | 105extendedforareasonablelengthoftime,notlessthanfivebusinessdaysfollowingnoticeby |
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| 118 | 118 | | 106thefranchisortothefranchisee,forthefranchiseetoprovidethecomplete,accurate,or |
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| 119 | 119 | | 107lackinginformationtothefranchisor. |
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| 120 | 120 | | 108 [11.]12.(1)Afranchisormayonlyauditwarranty,sales,orincentiveclaimsand |
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| 121 | 121 | | 109charge-backtothefranchiseeunsubstantiatedclaimsforaperiodoftwelvemonthsfollowing |
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| 122 | 122 | | 110payment,subjecttoalloftheprovisionsofthissection.Furthermore,ifthefranchisorhas |
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| 123 | 123 | | 111goodcausetobelievethatafranchiseehassubmittedfraudulentclaims,thenthefranchisor |
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| 124 | 124 | | 112mayonlyauditsuspectedfraudulentwarranty,sales,orincentiveclaimsandcharge-backto |
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| 125 | 125 | | 113thefranchiseefraudulentclaimsforaperiodoftwoyearsfollowingpayment,subjecttoall |
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| 126 | 126 | | 114provisionsofthissection. |
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| 127 | 127 | | 115 (2)Afranchisorshallnotrequiredocumentationforwarranty,sales,orincentive |
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| 128 | 128 | | 116claimsmorethantwelvemonthsaftertheclaimwaspaid. |
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| 129 | 129 | | 117 (3)Priortorequiringanycharge-back,reimbursement,orcreditagainstafuture |
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| 130 | 130 | | 118transactionarisingoutofanaudit,thefranchisorshallsubmitwrittennoticetothefranchisee |
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| 131 | 131 | | 119alongwithacopyofitsauditandthedetailedreasonforeachintendedcharge-back, |
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| 132 | 132 | | 120reimbursement,orcredit. |
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| 133 | 133 | | 121 [12.] 13.Afranchiseemayfileacomplaintwiththeadministrativehearing |
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| 134 | 134 | | 122commissionpursuanttosection407.822withinsixtydaysafterreceiptofanywrittennotice |
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| 135 | 135 | | 123byafranchisorofanyadversedecisiononanyclaimforreimbursementsubmittedpursuantto |
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| 136 | 136 | | 124thissection,including,butnotlimitedto,specificclaimsforreimbursementinindividual |
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| 137 | 137 | | 125warrantyrepairtransactions,andrequestsforanincreaseinlabororpartsrate.Ifacomplaint |
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| 138 | 138 | | 126isfiledwithinthesixtydays,thenthedenialorreductionofreimbursement,denialofa |
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| 139 | 139 | | 127requestforanincreaseinlabororpartsrate,charge-back,orotherdeterminationbya |
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| 140 | 140 | | 128franchisorwhichisadversetoafranchiseeshallbestayedpendingahearingand |
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| 141 | 141 | | HB412 4 129determinationofthematterundersection407.822.Thefranchisorshallfileananswertothe |
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| 142 | 142 | | 130complaintwithinthirtydaysafterserviceofthecomplaint.If,followingahearingwhich |
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| 143 | 143 | | 131shallbeheldwithinsixtydaysfollowingserviceofthefranchisor'sanswer,theadministrative |
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| 144 | 144 | | 132hearingcommissiondeterminesthatafranchisorhasviolatedanyrequirementsofthis |
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| 145 | 145 | | 133section,thenthedenialorreductionofreimbursement,denialofarequestforanincreasein |
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| 146 | 146 | | 134labororpartsrate,orcharge-backshallbevoidandthefranchisorshall,withinfifteendaysof |
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| 147 | 147 | | 135thecommission'sorder,fairlycompensatethefranchiseeasrequiredbytheprovisionsofthis |
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| 148 | 148 | | 136section.Section407.835shallapplytoproceedingspursuanttothissection. |
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| 149 | 149 | | âś” |
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| 150 | 150 | | HB412 5 |
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