Modifies provisions relating to franchisors' warranty duties to franchisees
HB 1914 revises Missouri law governing franchisors’ warranty duties to franchisees, primarily in the motor vehicle franchise context. The bill repeals and reenacts section 407.828 to require franchisors to spell out franchisees’ obligations for preparation, delivery, warranty, and recall service, and to compensate franchisees fairly and reasonably for parts, labor, diagnostic work, and service time. It also expands and clarifies how warranty reimbursement is calculated, including rules for labor rates, parts markups, time allowances, and the treatment of recall and stop-sell repairs.
The bill adds or strengthens requirements for prompt claim processing, notice, and payment deadlines, limits how often franchisors can require rate-change requests, and restricts burdensome methods for proving customary retail rates. It also addresses audits and charge-backs by limiting the time period for auditing claims, requiring written notice and supporting detail before charge-backs, and allowing franchisees to challenge adverse decisions before the Administrative Hearing Commission. The measure further requires franchisors to compensate dealers for recall-related inventory storage and interest costs when sales are delayed by a recall or stop-sale order.
HB 1914 would amend section 407.828, RSMo, and materially expand statutory protections for Missouri franchisees, especially motor vehicle dealers and service departments. It would impose more specific reimbursement standards on franchisors for warranty, recall, and promotional work; create deadlines for claim approval and payment; limit audit and documentation demands; and provide an administrative remedy for disputed reimbursement decisions. The bill would also affect franchisors, manufacturers, importers, distributors, and franchisees by shifting more of the cost and timing burden of warranty and recall work onto franchisors.
The available context suggests generally favorable treatment of the bill in the House, as reflected by its committee status of “Reported Do Pass (H).” No committee transcript or recorded floor vote is provided, so there is no direct evidence of opposition or debate in the supplied materials. Based on the bill’s structure, the measure appears designed to support franchisees by ensuring fuller reimbursement and faster payment, which likely aligns with dealer interests.
The main points of contention are likely to be the bill’s expanded reimbursement obligations and tighter procedural limits on franchisors. Franchisors and manufacturers may object to the requirement that they pay at least retail-equivalent labor rates, compensate diagnostic and communication time, reimburse recall-related storage and interest, and avoid passing costs back through surcharges or wholesale price increases tied to warranty reimbursement. Franchisees, by contrast, would support these provisions as necessary to prevent underpayment, delayed payment, and burdensome audit practices. The bill also narrows franchisors’ discretion in auditing claims and challenges to labor and parts rates, which could be another area of dispute.