Iowa Code 322A.2 – Discontinuing franchise
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1. Unless otherwise provided in subsection 2, notwithstanding the terms, provisions, or conditions of any agreement or franchise, a franchiser shall not terminate or refuse to continue any franchise unless the franchiser has first established, in a hearing held under the provisions of this chapter, that both of the following apply:
a. The franchiser has good cause for termination or noncontinuance.
b. Upon termination or noncontinuance, another franchise in the same line-make will become effective in the same community, without diminution of the motor vehicle service formerly provided, or that the community cannot be reasonably expected to support such a dealership.
Terms Used In Iowa Code 322A.2
- Community: means the franchisee's area of responsibility as stipulated in the franchise. See Iowa Code 322A.1
- following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
- Franchise: includes a separate written agreement between the franchisee and the franchiser which materially affects the franchise, whether entered into prior to the date of the franchise, contemporaneously with the franchise, or subsequent to the date of the franchise. See Iowa Code 322A.1
- Franchisee: means a person who receives motor vehicles from the franchiser under a franchise and who offers and sells such motor vehicles to the general public. See Iowa Code 322A.1
- Franchiser: means a person who manufactures or distributes motor vehicles and who may enter into a franchise as hereinafter defined. See Iowa Code 322A.1
- Termination or noncontinuance: includes a reduction of the geographic area of a community. See Iowa Code 322A.1
- Vehicle: means any vehicle as defined in chapter 321. See Iowa Code 321H.2
2. A franchiser may terminate a franchise for a particular line-make if the franchiser discontinues that line-make and a franchiser may terminate a franchise if the franchisee‘s license as a motor vehicle dealer is revoked pursuant to the provisions of chapter 322.