7
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.
