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House Journal: Page 662: Tuesday, March 18, 1997

 5   franchisor under a franchise agreement, and shall not
 6   result in the imposition of any penalties or make
 7   applicable any right of first refusal by the
 8   franchisor:
 9     (1)  The succession of ownership of a franchise
10   upon the death or disability of a franchisee, or of an
11   owner of a franchise, to the surviving spouse, heir,
12   or a partner active in the management of the
13   franchisee unless the successor fails to meet within
14   one year the then current reasonable qualifications of
15   the franchisor for franchisees and the enforcement of
16   the reasonable current qualifications is not arbitrary
17   or capricious.
18     (2)  Incorporation of a proprietorship franchisee,
19   provided that such incorporation does not prohibit a
20   franchisor from requiring a personal guaranty by the
21   franchisee of obligations related to the franchise.
22     (3)  A transfer within an existing ownership group
23   of a franchise provided that more than fifty percent
24   of the franchise is held by persons who meet the
25   franchisor's reasonable current qualifications for
26   franchisees.  If less than fifty percent of the
27   franchise would be owned by persons who meet the
28   franchisor's reasonable current qualifications, the
29   franchisor may refuse to authorize the transfer,
30   provided that enforcement of the reasonable current
31   qualifications is not arbitrary or capricious.
32     (4)  A transfer of less than a controlling interest
33   in the franchise to the franchisee's spouse or child
34   or children, provided that more than fifty percent of
35   the entire franchise is held by those who meet the
36   franchisor's reasonable current qualifications.  If
37   less than fifty percent of the franchise would be
38   owned by persons who meet the franchisor's reasonable
39   current qualifications, the franchisor may refuse to
40   authorize the transfer, provided that enforcement of
41   the reasonable current qualifications is not arbitrary
42   or capricious.
43     (5)  A transfer of less than a controlling interest
44   in the franchise of an employee stock ownership plan,
45   or employee incentive plan, provided that more than
46   fifty percent of the entire franchise is held by those
47   who meet the franchisor's reasonable current
48   qualifications for franchisees.  If less than fifty
49   percent would be owned by persons who meet the
50   franchisor's reasonable current qualifications, the

Page 4

 1   franchisor may refuse to authorize the transfer,
 2   provided that enforcement of the reasonable current
 3   qualifications is not arbitrary or capricious.
 4     (6)  A grant or retention of a security interest in

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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URL: /DOCS/GA/77GA/Session.1/HJournal/00600/00662.html
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