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Ohio Senate Passes OADA-backed Franchise Law Update Legislation

Ohio House Debate Next – Dealers Should Contact Ohio House Members Immediately to Urge Support of Senate Bill 242

Late yesterday the Ohio Senate passed OADA-backed Senate Bill 242, sponsored by State Senator Bill Coley (R-Liberty Township) & State Senator Joe Uecker (R-Loveland).  This legislation will help dealers in the following areas in Ohio’s Motor Vehicle Dealer Franchise Law:

Warranty Reimbursement at Retail - 

Ohio Law already says that manufacturers are to pay retail for warranty, though few actually comply with this provision.  As a result, we are trying to eliminate the "gray area" in the law to help dealers receive proper compensation for both warranty labor rate and warranty parts markup percentage.  This update would provide a formula for dealers to utilize in order to bring their warranty labor rates and parts markup percentages more in line with their retail rates.  It also requires a reasonable time allowance for diagnosis and performance of warranty work. 

Sales Effectiveness - 

This update would require a manufacturer to consider the effect of "local market conditions" (such as the presence of a manufacturing facility or road construction) on a dealer’s ability to meet manufacturer’s performance standards before the manufacturer takes adverse action against a dealer based upon those standards. 

It would also limit the ability of a manufacturer to take adverse action against a dealer who is unable to sell a designated number of vehicles if the vehicles are unavailable to the dealer due to actions of the manufacturer (such as not being able to provide the dealer enough cars).  

Successorship - 

This bill would strengthen the provisions surrounding a dealer's right to name a successor of their choice on the franchise agreement.  

Data Privacy -

Clarifies the manufacturer’s duty to protect private customer information provided to the manufacturer by the dealer and forces the manufacturer to indemnify the dealer in the event of improper use of data by a manufacturer third party vendor. 

Vehicle Export Policy - 

This update strengthens current law to make it more difficult for manufacturers to impose a chargeback on dealers when consumers export vehicles to foreign countries by creating a new provision that prohibits a manufacturer from requiring a dealer to perform external research regarding a proposed purchaser as well as "safe harbor" for dealers in certain instances.  

Facility Renovation Timelines and Vendor Choice -

This update would limit the ability of the manufacturer to require a dealer to renovate his or her facility within 7 years after the dealer has previously completed a renovation approved by the manufacturer.  It also provides the dealer with the ability to choose any vendor they want for products (such as floor tile or lighting) to be installed during the renovation/construction process.   

Click HERE for a copy of Senate Bill 242.

We have spent considerable time and effort negotiating with manufacturers and legislators on this important legislation. While we appreciate the support of the Ohio Senate, please note the bill is now subject to debate in the Ohio House of Representatives.  What should you do?  Contact your state representative immediately and urge support of Senate Bill 242.  Click HERE to identify your state representative and contact info

OADA will keep dealers apprised as the debate on this legislation continues.  In the meantime, please contact the OADA policy team with any questions regarding Senate Bill 242:

Tim Doran at tdoran@oada.com

Zach Doran at zdoran@oada.com

Joe Cannon at jcannon@oada.com

 

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