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House Journal: Page 2057: Friday, April 28, 1995

Page 5

 1   that more than fifty percent of the entire franchise
 2   is held by those who meet the franchisor's reasonable
 3   current qualifications for franchisees.  If less than
 4   fifty percent would be owned by persons who meet the
 5   franchisor's reasonable current qualifications, the
 6   franchisor may refuse to authorize the transfer,
 7   provided that enforcement of the reasonable current
 8   qualifications is not arbitrary or capricious when
 9   compared to actions of the franchisor in other similar
10   circumstances.
11     g. f.  A grant or retention of a security interest
12   in the franchised business or its assets, or an
13   ownership interest in the franchisee, provided the
14   security agreement establishes an obligation on the
15   part of the secured party enforceable by the
16   franchisor to give the franchisor notice of the
17   secured party's intent to foreclose on the collateral
18   simultaneously with notice to the franchisee, and a
19   reasonable opportunity to redeem the interests of the
20   secured party and recover the secured party's interest
21   in the franchise or franchised business by paying the
22   secured obligation.
23     14. 13.  A franchisor shall not interfere or
24   attempt to interfere with any disposition of an
25   interest in a franchise or franchised business as
26   described in subsection 13 12, paragraphs "a"
through
27   "g" "f".
28     Sec. 3.  Section 523H.6, Code 1995, is amended by
29   striking the section and inserting in lieu thereof the
30   following:
31     523H.6  ENCROACHMENT.
32     1.  If a franchisor develops, or grants to a
33   franchisee the right to develop, a new outlet or
34   location which sells essentially the same goods or
35   services under the same trademark, service mark, trade
36   name, logotype, or other commercial symbol as an
37   existing franchisee and the new outlet or location has
38   an adverse effect on the gross sales of the existing
39   franchisee's outlet or location, the existing
40   adversely affected franchisee has a cause of action
41   for monetary damages in an amount calculated pursuant
42   to subsection 3, unless any of the following apply:
43     a.  The franchisor has first offered the new outlet
44   or location to the existing franchisee on the same
45   basic terms and conditions available to the other
46   potential franchisee, or, if the new outlet or
47   location is to be owned by the franchisor, on the
48   terms and conditions that would ordinarily be offered
49   to a franchisee for a similarly situated outlet or
50   location.

Iowa General Assembly

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

© 1995 Cornell College and League of Women Voters of Iowa

Comments? hjourn@legis.iowa.gov.

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URL: /DOCS/GA/76GA/Session.1/HJournal/02000/02057.html
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