13-35-204 - Franchisor's obligations related to service -- Franchisor audits -- Time limits.
13-35-204. Franchisor's obligations related to service -- Franchisor audits -- Timelimits.
(1) Each franchisor shall specify in writing to each of its franchisees licensed as a newpowersport vehicle dealer in this state:
(a) the franchisee's obligations for new powersport vehicle preparation, delivery, andwarranty service on its products;
(b) the schedule of compensation to be paid to the franchisee for parts, work, and service;and
(c) the time allowance for the performance of work and service.
(2) (a) The schedule of compensation described in Subsection (1) shall includereasonable compensation for diagnostic work, as well as repair service, parts, and labor.
(b) Time allowances described in Subsection (1) for the diagnosis and performance ofwarranty work and service shall be reasonable and adequate for the work to be performed.
(3) (a) In the determination of what constitutes reasonable compensation under thissection, the principal factor to be considered is the prevailing wage rates being paid byfranchisees in the relevant market area in which the franchisee is doing business.
(b) Compensation of the franchisee for warranty service work may not be less than theamount charged by the franchisee for like parts and service to retail or fleet customers, if theamounts are reasonable. For purposes of this Subsection (3)(b), the term "cost" shall be thatsame price paid by a franchisee to a franchisor or supplier for the part when the part is purchasedfor a nonwarranty repair.
(4) A franchisor may not fail to:
(a) perform any warranty obligation;
(b) include in written notices of franchisor's recalls to new powersport vehicle ownersand franchisees the expected date by which necessary parts and equipment will be available tofranchisees for the correction of the defects; or
(c) compensate any of the franchisees for repairs effected by the recall.
(5) If a franchisor disallows a franchisee's claim for a defective part, alleging that the partis not defective, the franchisor at its option shall:
(a) return the part to the franchisee at the franchisor's expense; or
(b) pay the franchisee the cost of the part.
(6) (a) A claim made by a franchisee pursuant to this section for labor and parts shall bepaid within 30 days after its approval.
(b) (i) A claim shall be either approved or disapproved by the franchisor within 30 daysafter receipt of the claim on a form generally used by the franchisor and containing the generallyrequired information.
(ii) Any claim not specifically disapproved of in writing within 30 days after the receiptof the form is considered to be approved, and payment shall be made within 30 days.
(7) Warranty service audits of franchisee records may be conducted by the franchisor ona reasonable basis.
(8) A franchisee's claim for warranty compensation may not be denied except for goodcause such as performance of nonwarranty repairs, lack of material documentation, fraud, ormisrepresentation.
(9) (a) Any charge backs for warranty parts or service compensation and serviceincentives shall only be enforceable for the 12-month period immediately following the date the
payment for warranty reimbursement was made by the franchisor.
(b) Except as provided in Subsection (9)(c), all charge backs levied by a franchisor forsales compensation or sales incentives arising out of the sale or lease of a powersport vehiclesold by a franchisee shall be compensable only if written notice of the charge back is received bythe franchisee within 24 months immediately following the date when payment for the salescompensation was made by the franchisor.
(c) The time limitations of this Subsection (9) do not preclude charge backs for anyfraudulent claim that was previously paid.
Amended by Chapter 131, 2003 General Session