1. Except as provided in subsection 2, a franchisor shall allow a franchisee to obtain equipment, fixtures, supplies, and services used in the establishment and operation of the franchised business from sources of the franchisee’s choosing, provided that such goods and services meet standards as to their nature and quality promulgated by the franchisor.

Terms Used In Iowa Code 523H.12

  • Affiliate: means a person controlling, controlled by, or under common control with another person, every officer or director of such a person, and every person occupying a similar status or performing similar functions. See Iowa Code 523H.1
  • Franchisee: means a person to whom a franchise is granted. See Iowa Code 523H.1
  • Franchisor: means a person who grants a franchise or master franchise, or an affiliate of such a person. See Iowa Code 523H.1
 2. Subsection 1 of this section does not apply to reasonable quantities of inventory goods or services, including display and sample items, that the franchisor requires the franchisee to obtain from the franchisor or its affiliate, but only if the goods or services are central to the franchised business and either are actually manufactured or produced by the franchisor or its affiliate, or incorporate a trade secret owned by the franchisor or its affiliate.
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