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House Journal: Page 2055: Friday, April 28, 1995

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 1   franchisor's obligations has the financial means to
 2   perform the franchisor's obligations in the ordinary
 3   course of business, but does not mean that the
 4   franchisor transferring the franchise is required to
 5   guarantee obligations of the underlying franchise
 6   agreement.
 7     8. 7.  A transfer by a franchisee is deemed to be
 8   approved sixty days after the franchisee submits the
 9   request for consent to the transfer unless the
10   franchisor withholds consent to the transfer as
11   evidenced in writing, specifying the reason or reasons
12   for withholding the consent.  The written notice must
13   be delivered to the franchisee prior to the expiration
14   of the sixty-day period.  Any such notice is
15   privileged and is not actionable based upon a claim of
16   defamation.
17     9. 8.  A franchisor shall not discriminate against
18   a proposed transferee of a franchise on the basis of
19   race, color, national origin, religion, sex, or
20   physical handicap disability.
21     10. 9.  A franchisor, as a condition to a transfer
22   of a franchise, shall not obligate a franchisee to
23   undertake obligations or relinquish any rights
24   unrelated to the franchise proposed to be transferred,
25   or to enter into a release of claims broader than a
26   similar release of claims by the franchisor against
27   the franchisee which is entered into by the
28   franchisor.
29     11. 10.  A franchisor, after a transfer of a
30   franchise, shall not seek to enforce any covenant of
31   the transferred franchise against the transferor which
32   prohibits the transferor from engaging in any lawful
33   occupation or enterprise.  However, this subsection
34   does not prohibit the franchisor from enforcing a
35   contractual covenant against the transferor not to
36   exploit the franchisor's trade secrets or intellectual
37   property rights, unless otherwise agreed to by the
38   parties.
39     12. 11.  For purposes of this section, "transfer"
40   means any change in ownership or control of a
41   franchise, franchised business, or a franchisee.
42     13. 12.  The following occurrences shall not be
43   considered transfers requiring the consent of the
44   franchisor under a franchise agreement, and shall not
45   result in the imposition of any penalties or make
46   applicable any right of first refusal by the
47   franchisor:
48     a.  The succession of ownership of a franchise upon
49   the death or disability of a franchisee, or of an
50   owner of a franchise, to the franchisee's surviving

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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