This file contains STRIKE and UNDERSCORE. If you cannot see either STRIKE or UNDERSCORE attributes or would like to change how these attributes are displayed, please use the following form to make the desired changes.

House Journal: Page 664: Tuesday, March 18, 1997

Amendment H-1189 lost.
Weigel of Chickasaw offered the following amendment H-1190 filed
by him and moved its adoption:

H-1190

 1     Amend House File 334 as follows:
 2     1.  Page 3, by inserting after line 14 the
 3   following:
 4     6.  a.  Except as otherwise provided by this
 5   section, a franchisor shall not terminate a franchise
 6   prior to the expiration of its term except for good
 7   cause.  For purposes of this subsection, "good cause"
 8   is cause based upon a legitimate business reason.
 9   "Good cause" includes the failure of the franchisee to
10   comply with any material lawful requirement of the
11   franchise agreement, provided that the termination by
12   the franchisor is not arbitrary or capricious when
13   compared to the actions of the franchisor in other
14   similar circumstances.  The burden of proof of showing
15   that action of the franchisor is arbitrary or
16   capricious shall rest with the franchisee.
17     b.  Prior to termination of a franchise for good
18   cause, a franchisor shall provide a franchisee with
19   written notice stating the basis for the proposed
20   termination.  After service of written notice, the
21   franchisee shall have a reasonable period of time to
22   cure the default, which in no event shall be less than
23   thirty days or more than ninety days.  In the event of
24   nonpayment of moneys due under the franchise
25   agreement, the period to cure need not exceed thirty
26   days.
27     c.  Notwithstanding paragraph "b", a franchisor may
28   terminate a franchisee upon written notice and without
29   an opportunity to cure if any of the following apply:
30     (1)  The franchisee or the business to which the
31   franchise relates is declared bankrupt or judicially
32   determined to be insolvent.
33     (2)  All or a substantial part of the assets of the
34   franchise or the business to which the franchisee
35   relates are assigned to or for the benefit of any
36   creditor which is subject to chapter 681.  An
37   assignment for the benefit of any creditor pursuant to
38   this subparagraph does not include the granting of a
39   security interest in the normal course of business.
40     (3)  The franchisee voluntarily abandons the
41   franchise by failing to operate the business for five
42   consecutive business days during which the franchisee
43   is required to operate the business under the terms of
44   the franchise, or any shorter period after which it is
45   not unreasonable under the facts and circumstances for
46   the franchisor to conclude that the franchisee does

Iowa General Assembly

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

© 1997 Cornell College and League of Women Voters of Iowa

Comments about this site or page? hjourn@legis.iowa.gov. Please remember that the person listed above does not vote on bills. Direct all comments concerning legislation to State Legislators.

Last update: Wed Mar 19 13:40:03 CST 1997
URL: /DOCS/GA/77GA/Session.1/HJournal/00600/00664.html
jhf