Senate
File
2084
-
Introduced
SENATE
FILE
2084
BY
DOTZLER
A
BILL
FOR
An
Act
relating
to
the
sources
of
goods
or
services
under
a
1
franchise
agreement.
2
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
3
TLSB
5724XS
(2)
86
gh/nh
S.F.
2084
Section
1.
Section
537A.10,
subsection
9,
paragraph
b,
Code
1
2016,
is
amended
to
read
as
follows:
2
b.
However,
the
publication
by
the
franchisor
of
a
list
3
of
approved
suppliers
of
goods,
supplies,
inventories,
or
4
services,
or
the
requirement
that
such
goods,
supplies,
5
inventories,
or
services
comply
with
customary
and
reasonable
6
specifications
and
standards
prescribed
by
the
franchisor,
7
does
not
constitute
designation
of
a
source.
Additionally,
8
the
reasonable
right
of
a
franchisor
to
disapprove
a
supplier
9
does
not
constitute
a
designation
of
source.
This
subsection
10
does
not
apply
to
the
principal
goods,
supplies,
inventories,
11
or
services
manufactured
by
the
franchisor,
except
for
motor
12
oil
that
is
labeled
in
accordance
with
the
requirements
of
13
the
American
petroleum
institute,
or
such
goods,
supplies,
14
inventories,
or
services
entitled
to
protection
as
a
trade
15
secret.
16
EXPLANATION
17
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
18
the
explanation’s
substance
by
the
members
of
the
general
assembly.
19
This
bill
relates
to
the
sources
of
goods
or
services
under
20
a
franchise
agreement.
21
Under
current
Code
section
537A.10(9),
a
franchisor
cannot
22
require
a
franchisee
to
purchase
goods
or
services
exclusively
23
from
the
franchisor
or
from
a
specific
source
designated
by
24
the
franchisor
if
goods
or
services
of
comparable
quality
are
25
available
from
other
sources.
A
franchisor
may
publish
a
list
26
of
approved
suppliers
of
goods
or
services
or
require
that
such
27
goods
or
services
comply
with
standards
and
specifications.
28
A
franchisor
also
has
the
reasonable
right
to
disapprove
a
29
supplier.
This
provision
does
not
apply
to
the
principal
goods
30
or
services
manufactured
by
a
franchisor
or
such
goods
or
31
services
entitled
to
trade
secret
protection.
32
The
bill
amends
current
law
to
limit
the
ability
of
a
33
franchisor
to
prescribe
specifications
and
standards
regarding
34
the
purchase
of
goods
or
services
to
specifications
and
35
-1-
LSB
5724XS
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86
gh/nh
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2
S.F.
2084
standards
that
are
customary
and
reasonable.
The
bill
1
also
amends
current
law
to
provide
that
a
franchisor
cannot
2
designate
a
source
for
a
franchisee’s
purchase
of
motor
oil
3
labeled
in
accordance
with
the
requirements
of
the
American
4
petroleum
institute.
5
-2-
LSB
5724XS
(2)
86
gh/nh
2/
2