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House Journal: Page 661: Tuesday, March 18, 1997

 5   conditional assignment, or other similar device.
 6     f.  A franchisor shall not transfer its interest in
 7   a franchise unless the franchisor makes reasonable
 8   provision for the performance of the franchisor's
 9   obligations under the franchise agreement by the
10   transferee.  For purposes of this paragraph,
11   "reasonable provision" means that upon the transfer,
12   the entity assuming the franchisor's obligations has
13   the financial means to perform the franchisor's
14   obligations in the ordinary course of business, but
15   does not mean that the franchisor transferring the
16   franchise is required to guarantee obligations of the
17   underlying franchise agreement.
18     g.  A transfer by a franchisee is deemed to be
19   approved sixty days after the franchisee submits the
20   request for consent to the transfer unless the
21   franchisor withholds consent to the transfer as
22   evidenced in writing, specifying the reason or reasons
23   for withholding the consent.  The written notice must
24   be delivered to the franchisee prior to the expiration
25   of the sixty-day period.  Any such notice is
26   privileged and is not actionable based upon a claim of
27   defamation.
28     h.  A franchisor shall not discriminate against a
29   proposed transferee of a franchise on the basis of
30   race, color, national origin, religion, sex, or
31   disability.
32     i.  A franchisor, as a condition to a transfer of a
33   franchise, shall not obligate a franchisee to
34   undertake obligations or relinquish any rights
35   unrelated to the franchise proposed to be transferred,
36   or to enter into a release of claims broader than a
37   similar release of claims by the franchisor against
38   the franchisee which is entered into by the
39   franchisor.
40     j.  A franchisor, after a transfer of a franchise,
41   shall not seek to enforce any covenant of the
42   transferred franchise against the transferor which
43   prohibits the transferor from engaging in any lawful
44   occupation or enterprise.  However, this paragraph
45   does not prohibit the franchisor from enforcing a
46   contractual covenant against the transferor not to
47   exploit the franchisor's trade secrets or intellectual
48   property rights, unless otherwise agreed to by the
49   parties.
50     k.  For purposes of this subsection, "transfer"

Page 3

 1   means any change in ownership or control of a
 2   franchise, franchised business, or a franchisee.
 3     l.  The following occurrences shall not be
 4   considered transfers requiring the consent of the

Iowa General Assembly

Index: House Journal (77th General Assembly: Session 1)

© 1997 Cornell College and League of Women Voters of Iowa

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