Text: S03372 Text: S03374 Text: S03300 - S03399 Text: S Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Amend House File 126, as amended, passed, and 1 2 reprinted by the House, as follows: 1 3 #1. By striking page 1, line 35, through page 2, 1 4 line 10, and inserting the following: 1 5 "523H.6 FRANCHISE MARKET AREA. 1 6 1. This section applies to a franchise which is 1 7 not a food service franchise or food service 1 8 establishment franchise subject to section 523H.6A. 1 9 2. An action by a franchisor or its licensee which 1 10 diverts trade away from an existing franchisee and 1 11 which materially injures the franchisee's business is 1 12 a violation of the duty of good faith and results in a 1 13 cause of action accruing to the franchisee for 1 14 damages, injunctive relief, or other appropriate 1 15 remedy as determined by the court. In any action 1 16 brought pursuant to this section, proof of a 1 17 correlation between the action of the franchisor or 1 18 its licensee and the diversion of trade establishes a 1 19 prima facie case of a violation of this section. 1 20 3. This section shall apply notwithstanding the 1 21 terms, provisions, or conditions of an agreement or 1 22 franchise. 1 23 Sec. . NEW SECTION. 523H.6A FOOD SERVICE 1 24 FRANCHISE OR FOOD SERVICE ESTABLISHMENT FRANCHISE 1 25 MARKET AREA. 1 26 1. a. For purposes of a food service franchise or 1 27 food service establishment franchise, a rebuttable 1 28 presumption arises that a breach of the duty of good 1 29 faith has occurred as a result of the diversion of 1 30 trade if a franchisor establishes a new company-owned 1 31 outlet or store or a new franchise outlet or store 1 32 within a two-mile radius, using a straight line 1 33 measurement, from the center of an already existing 1 34 franchise, or within an area with a radius, using a 1 35 straight line measurement, from the center of an 1 36 already existing franchise, which contains a 1 37 population of twenty thousand or greater. 1 38 b. With respect to locations within the relevant 1 39 consumer market area of an existing franchise 1 40 operation which are located outside of the geographic 1 41 area defined in paragraph "a", a rebuttable 1 42 presumption arises that a breach of the duty of good 1 43 faith has not occurred as a result of the diversion of 1 44 trade. 1 45 2. A franchisor shall establish and make available 1 46 a written policy outlining reasonable objective 1 47 criteria to be used by the franchisor to determine 1 48 whether an existing franchisee is eligible to 1 49 participate in the establishment of an additional 1 50 outlet or location which is proposed to be located 2 1 within the relevant consumer market area of the 2 2 existing franchise, but which is outside of the 2 3 geographic area as defined in subsection 1, paragraph 2 4 "a", or which is proposed to be located within the 2 5 same community in which an existing franchise is 2 6 located and within the geographic area as defined in 2 7 subsection 1, paragraph "a". The franchisor shall 2 8 provide a copy of this policy to all existing 2 9 franchisees or potential franchisees upon request. A 2 10 franchisor, upon the request of a franchisee, shall 2 11 notify the franchisee as to whether the franchisee may 2 12 acquire additional outlets or locations of the 2 13 franchisor as identified in this subsection. A 2 14 franchisor shall not adopt a policy that unreasonably 2 15 prohibits an existing franchisee from acquiring such 2 16 outlets or locations. 2 17 3. Upon the determination of a franchisor to 2 18 establish an additional outlet or location within a 2 19 geographic area as defined in subsection 1, paragraph 2 20 "a", the franchisor shall give a right of first 2 21 refusal to the nearest franchisee located within the 2 22 geographic area. If the franchisee declines to 2 23 exercise the right of first refusal, the right of 2 24 first refusal shall pass consecutively to the next 2 25 closest franchisee located within the geographic area. 2 26 If all such franchisees located within the geographic 2 27 area decline to exercise the right of first refusal, 2 28 the franchisor may proceed to establish a new 2 29 franchise or company-owned outlet or location. 2 30 4. If an existing franchisee located within a 2 31 geographic area as defined in subsection 1, paragraph 2 32 "a", determines that the franchisee has been aggrieved 2 33 as a result of the action of a franchisor which 2 34 establishes a new franchise or company-owned outlet or 2 35 location within the geographic area, the franchisee, 2 36 upon motion to the district court, shall be granted a 2 37 temporary injunction prohibiting the establishment of 2 38 a new franchise or company-owned outlet or location. 2 39 The proceeding shall be summary in nature and triable 2 40 as an equitable action." 2 41 #2. By renumbering as necessary. 2 42 2 43 2 44 2 45 COMMITTEE ON COMMERCE 2 46 PATRICK J. DELUHERY, Chairperson 2 47 HF 126.706 76 2 48 mj/sc
Text: S03372 Text: S03374 Text: S03300 - S03399 Text: S Index Bills and Amendments: General Index Bill History: General Index
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