Iowa Code 322A.3A – Alteration of franchise
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1. A franchiser shall not unreasonably alter a franchisee‘s community.
Terms Used In Iowa Code 322A.3A
- Appeal: A request made after a trial, asking another court (usually the court of appeals) to decide whether the trial was conducted properly. To make such a request is "to appeal" or "to take an appeal." One who appeals is called the appellant.
- Community: means the franchisee's area of responsibility as stipulated in the franchise. See Iowa Code 322A.1
- Days: means calendar days. See Iowa Code 322G.2
- Department: means the state department of transportation. See Iowa Code 322A.1
- Franchisee: means a person who receives motor vehicles from the franchiser under a franchise and who offers and sells such motor vehicles to the general public. See Iowa Code 322A.1
- Franchiser: means a person who manufactures or distributes motor vehicles and who may enter into a franchise as hereinafter defined. See Iowa Code 322A.1
2. A franchiser shall notify a franchisee of a proposed alteration to the franchisee’s community at least sixty days prior to the effective date of the proposed alteration. Within thirty days of a request by the affected franchisee, unless otherwise provided in the notice, the franchiser shall provide the franchisee with an explanation of the basis for the proposed alteration.
3. Prior to the effective date of a proposed alteration of a franchisee’s community and after the receipt of the explanation of the basis for the proposed alteration, a franchisee may object to the proposed alteration of the franchisee’s community. Upon a franchisee’s objection, a franchiser shall provide an internal appeal process for the franchisee. However, the franchiser is not required to provide an internal appeal process if the franchiser has already provided the franchisee with an opportunity to object to the alteration of the franchisee’s community and to provide information in objection to the alteration for the franchiser’s consideration prior to the franchiser’s issuance of notice of the proposed alteration.
4. a. Within fifteen days of the completion of the franchiser’s internal appeal process, a franchisee may challenge the reasonableness of the proposed alteration of the franchisee’s community by filing an application with the department requesting a hearing to be held pursuant to section 322A.7.
b. After a hearing held as described in this subsection, the department of inspections and appeals may affirm, deny, or modify the proposed alteration of a franchisee’s community, may enter any other orders necessary to ensure that an alteration of the franchisee’s community is reasonable in light of all the relevant circumstances, and may assess the costs of the hearing among the parties to the hearing as appropriate.
5. No change to the franchisee’s community shall take effect during the pendency of the internal appeals process specified in subsection 3 or the hearing specified in subsection 4.
6. A franchiser shall not take any adverse action against a franchisee as a result of an alteration of the franchisee’s community for at least twelve months after the effective date of the alteration.