Dealers in North Dakota are benefiting from dealership franchise legislation passed in March that goes into effect August 1 and strengthens existing legislation while adding new protections. The bill was strongly supported by the North Dakota Implement Dealers Association (NDIDA), the North Dakota Farm Bureau, North Dakota Farmers Union and other pro-farm groups. NDIDA Legislative Committee Chairman Dan Butler said the bill was introduced in response to some of the requirements placed upon dealers by equipment manufacturers. The new law also limits the warranty or incentive audit and chargeback period to one year. This warranty reimbursement language also applies to manufacturer issued product improvement programs, factory maintenance plans, extended warranties, service contracts and more related items.
Other issues addressed include prohibitions regarding dealership terminations, transparent and reasonable performance requirements, limitations regarding warranty and incentive payment chargebacks, and the establishment of a fair process through which dealers may transfer or sell their dealership. The legislation also enhances existing law in other areas including: the prohibition of mandatory equipment and parts purchases, minimum order requirements, and “purity” requirements stipulating the separation of facilities/personnel/display space/etc.; and the requirement that manufacturers reimburse dealers for warranty parts, labor and transportation at the respective dealer’s standard customer rates.
According to Butler, many of the protections within the new legislation are already available through state law to auto dealers, and the legislation is similar to laws in other states that seek to level the playing field between dealer and manufacturer. He added that ideally dealer contract terms should be negotiated outside the legislative realm, and that dealers and manufacturers are on the same side when it comes to serving customers. “We need to work together,” Butler added.