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House Journal: Page 2053: Friday, April 28, 1995

 provisions relating to transfer, termination, and nonrenewal of
franchise agreements, and to a civil cause of action for
appropriate relief, and repealing certain franchise provisions,
amended by the Senate, and moved that the House concur in the
following Senate amendment H-4140:
H-4140
 1     Amend House File 126, as amended, passed, and
 2   reprinted by the House, as follows:
 3     1.  By striking everything after the enacting
 4   clause and inserting the following:
 5     "Section 1.  Section 523H.2, Code 1995, is amended
 6   to read as follows:
 7     523H.2  APPLICABILITY.
 8     This chapter applies to a new or existing franchise
 9   that is operated in the state of Iowa.  For purposes
10   of this chapter, the franchise is operated in this
11   state only if the premises from which the franchise is
12   operated is physically located in this state.  For
13   purposes of this chapter, a franchise including
14   marketing rights in or to this state, is deemed to be
15   operated in this state only if the franchisee's
16   principal business office is physically located in
17   this state.  This chapter does not apply to a
18   franchise solely because an agreement relating to the
19   franchise provides that the agreement is subject to or
20   governed by the laws of this state.  The provisions of
21   this chapter do not apply to any existing or future
22   contracts between Iowa franchisors and out-of-state
23   franchisees who operate franchises located out-of-
24   state.
25     Sec. 2.  Section 523H.5, Code 1995, is amended to
26   read as follows:
27     523H.5  TRANSFER OF FRANCHISE.
28     1.  A franchisee may transfer the franchised
29   business and franchise to a transferee, provided that
30   the transferee satisfies the reasonable current
31   qualifications of the franchisor for new franchisees.
32   For the purposes of this section, a reasonable current
33   qualification for a new franchisee is a qualification
34   based upon a legitimate business reason.  If the
35   proposed transferee does not meet the reasonable
36   current qualifications of the franchisor, the
37   franchisor may refuse to permit the transfer, provided
38   that the refusal of the franchisor to consent to the
39   transfer is not arbitrary or capricious when compared
40   to the actions of the franchisor in other similar
41   circumstances.
42     2.  Except as otherwise provided in this section, a
43   franchisor may exercise a right of first refusal
44   contained in a franchise agreement after receipt of a
45   proposal from the franchisee to transfer the
46   franchise.
47     3.  A franchisor may require as a condition of a

Iowa General Assembly

Index: House Journal (76th General Assembly: Session 1)

© 1995 Cornell College and League of Women Voters of Iowa

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Last update: Sun Jan 14 21:05:02 CST 1996
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