SB 1081 revises Missouri law governing how motor vehicle franchisors compensate franchisees for warranty, recall, and related service work. The bill replaces the current compensation framework in section 407.828, RSMo, with a more detailed formula requiring franchisors to pay franchisees no less than the amount a retail customer pays for the same services, including labor time, diagnostic work, parts, and certain communications with technical assistance or engineering support. It also addresses compensation for recall repairs, stop-sale repairs, and franchisor-sponsored sales or service promotion events, and it limits how often franchisees may request labor or parts rate changes.
The bill also tightens procedural rules for claims, audits, and charge-backs. It sets deadlines for franchisors to approve or deny claims, requires payment within specified timeframes, restricts the timing and scope of audits, and gives franchisees a right to challenge adverse decisions before the administrative hearing commission. If a franchisor violates the section, the commission may void the adverse action and require payment. The bill further prohibits franchisors from shifting the cost of these reimbursements back to franchisees through special surcharges or wholesale price increases intended solely to recover warranty reimbursement costs.
The bill’s impact would be to expand and clarify statutory protections for Missouri motor vehicle dealers and franchisees, while increasing the reimbursement obligations and administrative duties of franchisors, manufacturers, importers, and distributors. It would affect the calculation of warranty labor rates, parts compensation, recall-related expenses, and claim processing procedures, and it would likely increase compliance costs for franchisors while improving payment certainty for franchisees.
The general sentiment reflected by the bill text is strongly favorable to franchisees and dealers, because it raises compensation standards and adds enforcement mechanisms. No committee transcripts or recorded votes were provided, so there is no direct evidence of debate or opposition in the available materials. Based on the structure of the bill, likely points of contention would be the higher reimbursement formula, the use of retail customer rates as the benchmark, the 1.4 multiplier for certain warranty repairs, and the limits on franchisors’ ability to audit or recoup costs.
Overall, SB 1081 appears to be a dealer-protection and warranty-reimbursement bill aimed at motor vehicle franchise relationships, especially in the context of warranty work, recalls, stop-sale orders, and incentive or promotion programs. It would amend existing Missouri franchise law by replacing older compensation language with more prescriptive rules and stronger procedural rights for franchisees.
SB 1081 would substantially amend section 407.828, RSMo, governing compensation from motor vehicle franchisors to franchisees. It would change how warranty, recall, and related service compensation is calculated, require payment based on retail customer rates for comparable work, regulate claim submission and approval timelines, restrict audit and charge-back practices, and provide an administrative remedy through the Administrative Hearing Commission. The bill would primarily affect motor vehicle dealers/franchisees and franchisors, manufacturers, importers, and distributors operating in Missouri.
No committee discussion or vote record was provided, so the available evidence does not show formal support or opposition from legislators. The bill’s text is clearly pro-franchisee and pro-dealer, suggesting a favorable posture toward increasing dealer reimbursement and procedural protections. Any opposition would likely come from franchisors or manufacturers concerned about higher costs, tighter deadlines, and reduced flexibility in auditing and reimbursement practices.
The main likely points of contention are the bill’s requirement that franchisors pay no less than retail customer rates for the same services, the use of a 1.4 multiplier when no warranty repair schedule exists, and the inclusion of diagnostic time, communications with technical support, and recall/stop-sale repairs in reimbursable work. Franchisors may also object to the limits on audits, the shortened approval/payment deadlines, the restriction on cost recovery through surcharges or wholesale price increases, and the ability of franchisees to challenge adverse decisions before the Administrative Hearing Commission.