The Motor Vehicle Open Recall Notice and Fair Compensation Act introduces new regulations in New Jersey concerning motor vehicle recalls and the relationship between franchisors and franchisees. It defines important terms such as "do-not-drive notice" and "open recall," and mandates that franchisors must compensate franchisees at a minimum rate of 1.5% of the vehicle's value per month if necessary repair parts are not available within 30 days of a stop-sale or do-not-drive notice. Additionally, the bill empowers corporations representing franchisees to take legal action against franchisors for violations of the Franchise Practices Act. The New Jersey Motor Vehicle Commission is also tasked with issuing open recall notices during vehicle registration or renewal, enhancing consumer awareness of recalls.

Moreover, the bill outlines reimbursement practices for parts and labor, requiring franchisors to reimburse franchisees within 30 days of claim approval and prohibiting unreasonable handling charges for returns. It protects franchisees from unfair chargebacks and price manipulations, ensuring that franchisors cannot unilaterally reduce parts prices that would negatively impact franchisee compensation. The act will take effect seven months after its enactment and will apply to franchise agreements established from that date forward, without retroactive implications.

Statutes affected:
Introduced: 56:10-7.2, 56:10-7.4, 56:10-15
Pamphlet Law: 56:10-7.2, 56:10-15