This bill amends the existing laws regarding franchisee compensation for warranty services related to motor vehicles. It removes the requirement for franchisers to provide a schedule of compensation for warranty services, which previously included specific provisions for parts, labor, and diagnostics. Instead, the bill mandates that franchisers must pay franchisees an amount that is not less than the rates and labor times that the franchisee charges retail customers for similar services, as long as those rates are deemed reasonable. Additionally, franchisees are required to submit an itemized list of their rates and labor times for the warranty services they perform.

Furthermore, the bill eliminates the obligation for franchisers to provide a list of time allowances for warranty services. Instead, it stipulates that franchisees must perform warranty services, including diagnostics, within a reasonable amount of time. This legislation will apply to franchises under Code chapter 322A that are entered into or renewed on or after July 1, 2026.

Statutes affected:
Introduced: 322A.5