NYS Franchise Law 2013

highlights

Warranty Reimbursement – Section 465

page 30 • Requires that a franchisor compensate a dealer for parts and labor performed under warranty at the dealer’s retail non-warranty rate. • Institutes a procedure to establish the dealer’s retail rate and prohibits the franchisor from implementing burdensome procedures that impede the dealer from establishing its retail rate. Warranty and Sales Incentive / Audits / Chargebacks Section 465(3)-(5) page 31-32 • The franchisor may not audit or chargeback a sales incentive payment more than one year after to the date of payment, unless there is fraud. • The franchisor shall not deny or charge back a warranty claim unless it proves that the dealer did not make a good faith effort to comply with the reasonable written procedures or that the dealer did not perform the work. • The franchisor shall not deny or charge back a sales incentive payment made to a dealer unless the claim was false or materially fraudulent or the dealer failed to reasonably substantiate the claim in accordance with the franchisor’s reasonable procedures. • The franchisor must meet with the dealer, explain the proposed chargeback, and allow the dealer to explain its position prior to imposition of the proposed chargeback. • If the franchisor attempts to impose the proposed chargeback, the dealer may file a protest, which stays (halts) the chargeback until a final determination. • The franchisor has the burden of proof if a protest is filed.

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