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S.B. 68

             1     

NEW AUTOMOBILE FRANCHISE ACT AMENDMENTS

             2     
2012 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Scott K. Jenkins

             5     
House Sponsor: Brad L. Dee

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill modifies the New Automobile Franchise Act.
             10      Highlighted Provisions:
             11          This bill:
             12          .    prohibits a franchisor from:
             13              .    coercing or requiring a franchisee to establish prices at which the franchisee is
             14      required to sell certain products or services;
             15              .    coercing or requiring a franchisee to construct a new dealer facility or materially
             16      alter or remodel an existing dealer facility under certain circumstances;
             17              .    requiring a franchisee to purchase certain goods or services from a specified
             18      vendor under certain circumstances; and
             19              .    coercing or requiring a franchisee to lease a sign or other franchisor image
             20      element from the franchisor or affiliate without providing the franchisee the
             21      right to purchase from a vendor of the franchisee's choosing.
             22      Money Appropriated in this Bill:
             23          None
             24      Other Special Clauses:
             25          None
             26      Utah Code Sections Affected:
             27      AMENDS:


             28          13-14-201, as last amended by Laws of Utah 2011, Chapter 203
             29     
             30      Be it enacted by the Legislature of the state of Utah:
             31          Section 1. Section 13-14-201 is amended to read:
             32           13-14-201. Prohibited acts by franchisors -- Affiliates -- Disclosures.
             33          (1) A franchisor may not in this state:
             34          (a) except as provided in Subsection (3), require a franchisee to order or accept
             35      delivery of any new motor vehicle, part, accessory, equipment, or other item not otherwise
             36      required by law that is not voluntarily ordered by the franchisee;
             37          (b) require a franchisee to:
             38          (i) participate monetarily in any advertising campaign; or
             39          (ii) contest, or purchase any promotional materials, display devices, or display
             40      decorations or materials;
             41          (c) require a franchisee to change the capital structure of the franchisee's dealership or
             42      the means by or through which the franchisee finances the operation of the franchisee's
             43      dealership, if the dealership at all times meets reasonable capital standards determined by and
             44      applied in a nondiscriminatory manner by the franchisor;
             45          (d) require a franchisee to refrain from participating in the management of, investment
             46      in, or acquisition of any other line of new motor vehicles or related products, if the franchisee:
             47          (i) maintains a reasonable line of credit for each make or line of vehicles; and
             48          (ii) complies with reasonable capital and facilities requirements of the franchisor;
             49          (e) require a franchisee to prospectively agree to a release, assignment, novation,
             50      waiver, or estoppel that would:
             51          (i) relieve a franchisor from any liability, including notice and hearing rights imposed
             52      on the franchisor by this chapter; or
             53          (ii) require any controversy between the franchisee and a franchisor to be referred to a
             54      third party if the decision by the third party would be binding;
             55          (f) require a franchisee to change the location of the principal place of business of the
             56      franchisee's dealership or make any substantial alterations to the dealership premises, if the
             57      change or alterations would be unreasonable or cause the franchisee to lose control of the
             58      premises or impose any other unreasonable requirement related to the facilities or premises;


             59          (g) coerce or attempt to coerce a franchisee to join, contribute to, or affiliate with an
             60      advertising association;
             61          (h) require, coerce, or attempt to coerce a franchisee to enter into an agreement with the
             62      franchisor or do any other act that is unfair or prejudicial to the franchisee, by threatening to
             63      cancel a franchise agreement or other contractual agreement or understanding existing between
             64      the franchisor and franchisee;
             65          (i) adopt, change, establish, enforce, modify, or implement a plan or system for the
             66      allocation, scheduling, or delivery of new motor vehicles, parts, or accessories to its franchisees
             67      so that the plan or system is not fair, reasonable, and equitable, including a plan or system that
             68      imposes a vehicle sales objective, goal, or quota on a franchisee, or that evaluates a franchisee's
             69      sales effectiveness or overall sales performance, without providing a reasonable opportunity for
             70      the franchisee to acquire the necessary vehicles in a timely manner from the franchisor on
             71      commercially reasonable terms;
             72          (j) increase the price of any new motor vehicle that the franchisee has ordered from the
             73      franchisor and for which there exists at the time of the order a bona fide sale to a retail
             74      purchaser if the order was made prior to the franchisee's receipt of an official written price
             75      increase notification;
             76          (k) fail to indemnify and hold harmless its franchisee against any judgment for
             77      damages or settlement approved in writing by the franchisor:
             78          (i) including court costs and attorney fees arising out of actions, claims, or proceedings
             79      including those based on:
             80          (A) strict liability;
             81          (B) negligence;
             82          (C) misrepresentation;
             83          (D) express or implied warranty;
             84          (E) revocation as described in Section 70A-2-608 ; or
             85          (F) rejection as described in Section 70A-2-602 ; and
             86          (ii) to the extent the judgment or settlement relates to alleged defective or negligent
             87      actions by the franchisor;
             88          (l) threaten or coerce a franchisee to waive or forbear its right to protest the
             89      establishment or relocation of a same line-make franchisee in the relevant market area of the


             90      affected franchisee;
             91          (m) fail to ship monthly to a franchisee, if ordered by the franchisee, the number of
             92      new motor vehicles of each make, series, and model needed by the franchisee to achieve a
             93      percentage of total new vehicle sales of each make, series, and model equitably related to the
             94      total new vehicle production or importation being achieved nationally at the time of the order
             95      by each make, series, and model covered under the franchise agreement;
             96          (n) require or otherwise coerce a franchisee to under-utilize the franchisee's existing
             97      dealer facility or facilities, including by:
             98          (i) requiring or otherwise coercing a franchisee to exclude or remove from the
             99      franchisee's facility operations the selling or servicing of a line-make of vehicles for which the
             100      franchisee has a franchise agreement to utilize the facilities; or
             101          (ii) prohibiting the franchisee from locating, relocating, or occupying a franchise or
             102      line-make in an existing facility owned or occupied by the franchisee that includes the selling
             103      or servicing of another franchise or line-make at the facility provided that the franchisee gives
             104      the franchisor written notice of the franchise co-location;
             105          (o) fail to include in any franchise agreement or other agreement governing a
             106      franchisee's ownership of a dealership or a franchisee's conduct of business under a franchise
             107      the following language or language to the effect that: "If any provision in this agreement
             108      contravenes the laws or regulations of any state or other jurisdiction where this agreement is to
             109      be performed, or provided for by such laws or regulations, the provision is considered to be
             110      modified to conform to such laws or regulations, and all other terms and provisions shall
             111      remain in full force.";
             112          (p) engage in the distribution, sale, offer for sale, or lease of a new motor vehicle to
             113      purchasers who acquire the vehicle in this state except through a franchisee with whom the
             114      franchisor has established a written franchise agreement, if the franchisor's trade name,
             115      trademark, service mark, or related characteristic is an integral element in the distribution, sale,
             116      offer for sale, or lease;
             117          (q) engage in the distribution or sale of a recreational vehicle that is manufactured,
             118      rented, sold, or offered for sale in this state without being constructed in accordance with the
             119      standards set by the American National Standards Institute for recreational vehicles and
             120      evidenced by a seal or plate attached to the vehicle;


             121          (r) except as provided in Subsection (2), authorize or permit a person to perform
             122      warranty service repairs on motor vehicles, except warranty service repairs:
             123          (i) by a franchisee with whom the franchisor has entered into a franchise agreement for
             124      the sale and service of the franchisor's motor vehicles; or
             125          (ii) on owned motor vehicles by a person or government entity who has purchased new
             126      motor vehicles pursuant to a franchisor's fleet discount program;
             127          (s) fail to provide a franchisee with a written franchise agreement;
             128          (t) (i) except as provided in Subsection (1)(t)(ii) and notwithstanding any other
             129      provisions of this chapter:
             130          (A) unreasonably fail or refuse to offer to its same line-make franchised dealers all
             131      models manufactured for that line-make;
             132          (B) unreasonably require a dealer to:
             133          (I) pay any extra fee, remodel, renovate, recondition the dealer's existing facilities; or
             134          (II) purchase unreasonable advertising displays or other materials as a prerequisite to
             135      receiving a model or series of vehicles;
             136          (ii) notwithstanding Subsection (1)(t)(i), a recreational vehicle franchisor may split a
             137      line-make between motor home and travel trailer products;
             138          (u) except as provided in Subsection (6), directly or indirectly:
             139          (i) own an interest in a new motor vehicle dealer or dealership;
             140          (ii) operate or control a new motor vehicle dealer or dealership;
             141          (iii) act in the capacity of a new motor vehicle dealer, as defined in Section 13-14-102 ;
             142      or
             143          (iv) operate a motor vehicle service facility;
             144          (v) fail to timely pay for all reimbursements to a franchisee for incentives and other
             145      payments made by the franchisor;
             146          (w) directly or indirectly influence or direct potential customers to franchisees in an
             147      inequitable manner, including:
             148          (i) charging a franchisee a fee for a referral regarding a potential sale or lease of any of
             149      the franchisee's products or services in an amount exceeding the actual cost of the referral;
             150          (ii) giving a customer referral to a franchisee on the condition that the franchisee agree
             151      to sell the vehicle at a price fixed by the franchisor; or


             152          (iii) advising a potential customer as to the amount that the potential customer should
             153      pay for a particular product;
             154          (x) fail to provide comparable delivery terms to each franchisee for a product of the
             155      franchisor, including the time of delivery after the placement of an order by the franchisee;
             156          (y) if personnel training is provided by the franchisor to its franchisees, unreasonably
             157      fail to make that training available to each franchisee on proportionally equal terms;
             158          (z) condition a franchisee's eligibility to participate in a sales incentive program on the
             159      requirement that a franchisee use the financing services of the franchisor or a subsidiary or
             160      affiliate of the franchisor for inventory financing;
             161          (aa) make available for public disclosure, except with the franchisee's permission or
             162      under subpoena or in any administrative or judicial proceeding in which the franchisee or the
             163      franchisor is a party, any confidential financial information regarding a franchisee, including:
             164          (i) monthly financial statements provided by the franchisee;
             165          (ii) the profitability of a franchisee; or
             166          (iii) the status of a franchisee's inventory of products;
             167          (bb) use any performance standard, incentive program, or similar method to measure
             168      the performance of franchisees unless the standard or program:
             169          (i) is designed and administered in a fair, reasonable, and equitable manner;
             170          (ii) if based upon a survey, utilizes an actuarially generally acceptable, valid sample;
             171      and
             172          (iii) is, upon request by a franchisee, disclosed and explained in writing to the
             173      franchisee, including:
             174          (A) how the standard or program is designed;
             175          (B) how the standard or program will be administered; and
             176          (C) the types of data that will be collected and used in the application of the standard or
             177      program;
             178          (cc) other than sales to the federal government, directly or indirectly, sell, lease, offer
             179      to sell, or offer to lease, a new motor vehicle or any motor vehicle owned by the franchisor,
             180      except through a franchised new motor vehicle dealer;
             181          (dd) compel a franchisee, through a finance subsidiary, to agree to unreasonable
             182      operating requirements, except that this Subsection (1)(dd) may not be construed to limit the


             183      right of a financing subsidiary to engage in business practices in accordance with the usage of
             184      trade in retail and wholesale motor vehicle financing;
             185          (ee) condition the franchisor's participation in co-op advertising for a product category
             186      on the franchisee's participation in any program related to another product category or on the
             187      franchisee's achievement of any level of sales in a product category other than that which is the
             188      subject of the co-op advertising;
             189          (ff) except as provided in Subsections (7) through (9), discriminate against a franchisee
             190      in the state in favor of another franchisee of the same line-make in the state:
             191          (i) by selling or offering to sell a new motor vehicle to one franchisee at a higher actual
             192      price, including the price for vehicle transportation, than the actual price at which the same
             193      model similarly equipped is offered to or is made available by the franchisor to another
             194      franchisee in the state during a similar time period;
             195          (ii) except as provided in Subsection (8), by using a promotional program or device or
             196      an incentive, payment, or other benefit, whether paid at the time of the sale of the new motor
             197      vehicle to the franchisee or later, that results in the sale of or offer to sell a new motor vehicle
             198      to one franchisee in the state at a higher price, including the price for vehicle transportation,
             199      than the price at which the same model similarly equipped is offered or is made available by
             200      the franchisor to another franchisee in the state during a similar time period;
             201          (iii) except as provided in Subsection (9), by failing to provide or direct a lead in a fair,
             202      equitable, and timely manner; or
             203          (iv) if the franchisee complies with any reasonable requirement concerning the sale of
             204      new motor vehicles, by using or considering the performance of any of its franchisees located
             205      in this state relating to the sale of the franchisor's new motor vehicles in determining the:
             206          (A) dealer's eligibility to purchase program, certified, or other used motor vehicles
             207      from the franchisor;
             208          (B) volume, type, or model of program, certified, or other used motor vehicles the
             209      dealer is eligible to purchase from the franchisor;
             210          (C) price of any program, certified, or other used motor vehicles that the dealer is
             211      eligible to purchase from the franchisor; or
             212          (D) availability or amount of any discount, credit, rebate, or sales incentive the dealer
             213      is eligible to receive from the manufacturer for the purchase of any program, certified, or other


             214      motor vehicle offered for sale by the franchisor;
             215          (gg) (i) take control over funds owned or under the control of a franchisee based on the
             216      findings of a warranty audit or sales incentive audit unless the following conditions are
             217      satisfied:
             218          (A) the franchisor fully identifies in writing the basis for the franchisor's claim or
             219      charge back arising from the audit, including notifying the franchisee that the franchisee has 20
             220      days from the day on which the franchisee receives the franchisor's claim or charge back to
             221      assert a protest in writing to the franchisor identifying the basis for the protest;
             222          (B) the franchisee's protest shall inform the franchisor that the protest shall be
             223      submitted to a mediator in the state who is identified by name and address in the franchisee's
             224      notice to the franchisor;
             225          (C) if mediation is requested under Subsection (1)(gg)(i)(B), mediation shall occur no
             226      later than 30 days after the day on which the franchisor receives the franchisee's protest of a
             227      claim or charge back;
             228          (D) if mediation does not lead to a resolution of the protest, the protest shall be set for
             229      binding arbitration in the same venue in which the mediation occurred;
             230          (E) binding arbitration under Subsection (1)(gg)(i)(D) shall be conducted:
             231          (I) by an arbitrator mutually agreed upon by the franchisor and the franchisee; and
             232          (II) on a date mutually agreed upon by the franchisor and the franchisee, but shall be
             233      held no later than 90 days after the franchisor's receipt of the franchisee's notice of protest;
             234          (F) this Subsection (1)(gg)(i) applies exclusively to warranty audits and sales incentive
             235      audits;
             236          (G) Subsections (1)(gg)(i)(A) through (E) do not apply if the franchisor reasonably
             237      believes that the amount of the claim or charge back is related to a fraudulent act by the
             238      franchisee; and
             239          (H) the costs of the mediator or arbitrator instituted under this Subsection (1)(gg) shall
             240      be shared equally by the franchisor and the franchisee; or
             241          (ii) require a franchisee to execute a written waiver of the requirements of Subsection
             242      (1)(gg)(i);
             243          (hh) coerce, or attempt to coerce a franchisee to purchase or sell an aftermarket product
             244      manufactured by the franchisor, or obtained by the franchisor for resale from a third-party


             245      supplier and the franchisor or its affiliate derives a financial benefit from the franchisee's sale
             246      or purchase of the aftermarket product as a condition to obtaining preferential status from the
             247      franchisor;
             248          (ii) through an affiliate, take any action that would otherwise be prohibited under this
             249      chapter;
             250          (jj) impose any fee, surcharge, or other charge on a franchisee designed to recover the
             251      cost of a warranty repair for which the franchisee is paid by the franchisor;
             252          (kk) directly or indirectly condition any of the following actions on the willingness of a
             253      franchisee, prospective new franchisee, or owner of an interest in a dealership facility to enter
             254      into a site-control agreement:
             255          (i) the awarding of a franchise to a prospective new franchisee;
             256          (ii) the addition of a line-make or franchise to an existing franchisee;
             257          (iii) the renewal of an existing franchisee's franchise;
             258          (iv) the approval of the relocation of an existing franchisee's dealership facility, unless
             259      the franchisor pays, and the franchisee voluntarily accepts, additional specified cash
             260      consideration to facilitate the relocation; or
             261          (v) the approval of the sale or transfer of a franchise's ownership, unless the franchisor
             262      pays, and the buyer voluntarily accepts, additional specified cash consideration to facilitate the
             263      sale or transfer;
             264          (ll) subject to Subsection (11), deny a franchisee the right to return any or all parts or
             265      accessories that:
             266          (i) were specified for and sold to the franchisee under an automated ordering system
             267      required by the franchisor; and
             268          (ii) (A) are in good, resalable condition; and
             269          (B) (I) the franchisee received within the previous 12 months; or
             270          (II) are listed in the current parts catalog; [or]
             271          (mm) subject to Subsection (12), obtain from a franchisee a waiver of a franchisee's
             272      right, by threatening:
             273          (i) to impose a detriment upon the franchisee's business; or
             274          (ii) to withhold any entitlement, benefit, or service:
             275          (A) to which the franchisee is entitled under a franchise agreement, contract, statute,


             276      rule, regulation, or law; or
             277          (B) that has been granted to more than one other franchisee of the franchisor in the
             278      state[.];
             279          (nn) coerce or require a franchisee, including by agreement, program, or incentive
             280      provision, to establish a price at which the franchisee is required to sell a product or service
             281      that is:
             282          (i) sold in connection with the franchisee's sale of a motor vehicle; and
             283          (ii) (A) in the case of a product, not manufactured, provided, or distributed by the
             284      franchisor or an affiliate; or
             285          (B) in the case of a service, not provided by the franchisor or an affiliate;
             286          (oo) except as necessary to comply with a health or safety law, or to comply with a
             287      technology requirement compliance with which is necessary to sell or service a motor vehicle
             288      that the franchisee is authorized or licensed by the franchisor to sell or service, coerce or
             289      require a franchisee, including through a penalty or other detriment to the franchisee's business,
             290      to:
             291          (i) construct a new dealer facility or materially alter or remodel an existing dealer
             292      facility before the date that is 10 years after the date the construction of the new dealer facility
             293      at that location was completed, if the construction substantially complied with standards or
             294      plans that the franchisor or its predecessor provided or approved; or
             295          (ii) materially alter or remodel an existing dealer facility before the date that is 10 years
             296      after the date the previous alteration or remodeling at that location was completed, if the
             297      previous alteration or remodeling substantially complied with standards or plans that the
             298      franchisor or its predecessor provided or approved; or
             299          (pp) notwithstanding the terms of a franchise agreement providing otherwise and
             300      subject to Subsection (14):
             301          (i) coerce or require a franchisee, including by agreement, program, or incentive
             302      provision, to purchase a good or service, relating to a facility construction, alteration, or
             303      remodel, from a vendor that a franchisor or its affiliate selects, identifies, or designates, without
             304      allowing the franchisee to obtain a like good or service of substantially similar quality from a
             305      vendor that the franchisee chooses; or
             306          (ii) coerce or require a franchisee, including by agreement, program, or incentive


             307      provision, to lease a sign or other franchisor image element from the franchisor or an affiliate
             308      without providing the franchisee the right to purchase a sign or other franchisor image element
             309      of like kind and quality from a vendor that the franchisee chooses.
             310          (2) Notwithstanding Subsection (1)(r), a franchisor may authorize or permit a person to
             311      perform warranty service repairs on motor vehicles if the warranty services is for a franchisor
             312      of recreational vehicles.
             313          (3) Subsection (1)(a) does not prevent the franchisor from requiring that a franchisee
             314      carry a reasonable inventory of:
             315          (a) new motor vehicle models offered for sale by the franchisor; and
             316          (b) parts to service the repair of the new motor vehicles.
             317          (4) Subsection (1)(d) does not prevent a franchisor from requiring that a franchisee
             318      maintain separate sales personnel or display space.
             319          (5) Upon the written request of any franchisee, a franchisor shall disclose in writing to
             320      the franchisee the basis on which new motor vehicles, parts, and accessories are allocated,
             321      scheduled, and delivered among the franchisor's dealers of the same line-make.
             322          (6) (a) A franchisor may engage in any of the activities listed in Subsection (1)(u), for a
             323      period not to exceed 12 months if:
             324          (i) (A) the person from whom the franchisor acquired the interest in or control of the
             325      new motor vehicle dealership was a franchised new motor vehicle dealer; and
             326          (B) the franchisor's interest in the new motor vehicle dealership is for sale at a
             327      reasonable price and on reasonable terms and conditions; or
             328          (ii) the franchisor is engaging in the activity listed in Subsection (1)(u) for the purpose
             329      of broadening the diversity of its dealer body and facilitating the ownership of a new motor
             330      vehicle dealership by a person who:
             331          (A) is part of a group that has been historically underrepresented in the franchisor's
             332      dealer body;
             333          (B) would not otherwise be able to purchase a new motor vehicle dealership;
             334          (C) has made a significant investment in the new motor vehicle dealership which is
             335      subject to loss;
             336          (D) has an ownership interest in the new motor vehicle dealership; and
             337          (E) operates the new motor vehicle dealership under a plan to acquire full ownership of


             338      the dealership within a reasonable period of time and under reasonable terms and conditions.
             339          (b) After receipt of the advisory board's recommendation, the executive director may,
             340      for good cause shown, extend the time limit set forth in Subsection (6)(a) for an additional
             341      period not to exceed 12 months.
             342          (c) A franchisor who was engaged in any of the activities listed in Subsection (1)(u) in
             343      this state prior to May 1, 2000, may continue to engage in that activity, but may not expand that
             344      activity to acquire an interest in any other new motor vehicle dealerships or motor vehicle
             345      service facilities after May 1, 2000.
             346          (d) Notwithstanding Subsection (1)(u), a franchisor may own, operate, or control a new
             347      motor vehicle dealership trading in a line-make of motor vehicle if:
             348          (i) as to that line-make of motor vehicle, there are no more than four franchised new
             349      motor vehicle dealerships licensed and in operation within the state as of January 1, 2000;
             350          (ii) the franchisor does not own directly or indirectly, more than a 45% interest in the
             351      dealership;
             352          (iii) at the time the franchisor first acquires ownership or assumes operation or control
             353      of the dealership, the distance between the dealership thus owned, operated, or controlled and
             354      the nearest unaffiliated new motor vehicle dealership trading in the same line-make is not less
             355      than 150 miles;
             356          (iv) all the franchisor's franchise agreements confer rights on the franchisee to develop
             357      and operate as many dealership facilities as the franchisee and franchisor shall agree are
             358      appropriate within a defined geographic territory or area; and
             359          (v) as of January 1, 2000, no fewer than half of the franchisees of the line-make within
             360      the state own and operate two or more dealership facilities in the geographic area covered by
             361      the franchise agreement.
             362          (7) Subsection (1)(ff) does not apply to recreational vehicles.
             363          (8) Subsection (1)(ff)(ii) does not prohibit a promotional or incentive program that is
             364      functionally available to all competing franchisees of the same line-make in the state on
             365      substantially comparable terms.
             366          (9) Subsection (1)(ff)(iii) may not be construed to:
             367          (a) permit provision of or access to customer information that is otherwise protected
             368      from disclosure by law or by contract between a franchisor and a franchisee; or


             369          (b) require a franchisor to disregard the preference volunteered by a potential customer
             370      in providing or directing a lead.
             371          (10) Subsection (1)(ii) does not limit the right of an affiliate to engage in business
             372      practices in accordance with the usage of trade in which the affiliate is engaged.
             373          (11) (a) Subsection (1)(ll) does not apply to parts or accessories that the franchisee
             374      ordered and purchased outside of an automated parts ordering system required by the
             375      franchisor.
             376          (b) In determining whether parts or accessories in a franchisee's inventory were
             377      specified and sold under an automated ordering system required by the franchisor, the parts and
             378      accessories in the franchisee's inventory are presumed to be the most recent parts and
             379      accessories that the franchisor sold to the franchisee.
             380          (12) (a) Subsection (1)(mm) does not apply to a good faith settlement of a dispute,
             381      including a dispute relating to contract negotiations, in which the franchisee gives a waiver in
             382      exchange for fair consideration in the form of a benefit conferred on the franchisee.
             383          (b) Subsection (12)(a) may not be construed to defeat a franchisee's claim that a waiver
             384      has been obtained in violation of Subsection (1)(mm).
             385          (13) As used in Subsection (1)(oo), "materially alter":
             386          (a) means to make a material architectural, structural, or aesthetic alteration; and
             387          (b) does not include routine maintenance, such as interior painting, reasonably
             388      necessary to keep a dealership facility in attractive condition.
             389          (14) (a) Subsection (1)(pp)(i) does not apply to a good used in a facility construction,
             390      alteration, or remodel that is:
             391          (i) a moveable interior display that contains material subject to a franchisor's
             392      intellectual property right; or
             393          (ii) specifically eligible for reimbursement of over one-half its cost pursuant to a
             394      franchisor or distributor program or incentive granted to the franchisee on reasonable, written
             395      terms, if the reimbursement is paid within one year after the franchisee incurs the cost.
             396          (b) Subsection (1)(pp)(ii) may not be construed to allow a franchisee to:
             397          (i) impair or eliminate a franchisor's intellectual property right; or
             398          (ii) erect or maintain a sign that does not conform to the franchisor's reasonable
             399      fabrication specifications and intellectual property usage guidelines.






Legislative Review Note
    as of 2-10-12 4:05 PM


Office of Legislative Research and General Counsel


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