TALLAHASSEE, Fla. —On Monday, Florida Gov. Rick Scott signed into law legislation that ensures the state’s franchised dealers receive fair compensation for entering a factory image program and prohibits OEMs from taking “unsupported, punitive actions against dealers.”
The new law specifically ensures that the flow of benefits related to an OEM-order renovation don’t erode 10 years after construction is completed — even if that image program stops and another one starts. The bill, CS/CS/H.B. 1175, was unanimously approved by the Senate on May 5 and was approved by the House in late April by a 104-12 vote.
“Even though the OEMs always characterize these [facilities-update] programs as voluntary, the thing that makes them required is the incentives and other compensation programs they are wrapped in,” said Ted Smith, president of the Florida Automobile Dealers Association (FADA). “So this bill strikes at the heart of the program by ensuring that while dealers still do not have to do any of these programs, if they do, they have protections if and when an OEM starts and stops programs on the sale or service facility. So the dealer will continue to receive the benefits after completion of his project.”
Not only are dealers who enter a factory image program entitled to the associated benefits and incentives for 10 years, they are entitled to any increase in those benefits between the prior program and a new or revised one takes effect.
The new law also prohibits manufacturers from establishing, implementing or enforcing criteria for measuring a dealer’s sales or service performance that is “unfair, unreasonable, arbitrary, or inequitable,” and does not account for local and regional “criteria, data, and facts.”
If a vehicle OEM enforces a new performance measurement standard, the law entitles Florida franchised dealers to a written description of how the new criteria were “designed, calculated, established, and uniformly applied.”
The new law took effect upon the bill’s signing.