New RV-Specific Franchise Bill in Wisconsin Takes Effect

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The following was a News & Insights report from the RV Industry Association (RVIA).

On Oct. 1, Wisconsin Act 164 took effect, establishing an RV-specific franchise law in the state covering towable RVs. Motorhomes will continue to be covered under the automobile franchise laws. The new law on towable RVs, sponsored by Rep. Scott Klug, was jointly supported by the RV Industry Association (RVIA) and the Wisconsin RV Dealers Alliance, both of which pushed for its passage in the Assembly and Senate.

According to a memo by the Wisconsin Assembly’s Legislative Council, Wisconsin Act 164 makes changes to the definition of “recreational vehicle,” subjects recreational vehicle manufacturers to regulation by the Department of Transportation (DOT), and creates a framework for regulating the relationship between recreational vehicle manufacturers and dealers. The act modifies the definition of “recreational vehicle” to:

• extend the maximum length of a recreational vehicle from 45 to 46 feet.
• include in the definition of recreational vehicle all of the following: camping trailer, fifth-wheel RV, park model RV and travel trailer.

The act also makes various changes to the Department of Transportation’s regulation of recreational vehicle sales. It sets forth new manufacturer licensure requirements on any RV manufacturer that sells recreational vehicles to dealers in the state. Manufacturers should ensure that they have obtained the required license if they have not already done so.

Finally, the act establishes requirements regulating the relationship between recreational vehicle manufacturers, distributors and dealers. These provisions include the following:

• Dealer Agreements Required: Under the act, a manufacturer must enter into a dealer agreement to sell a recreational vehicle to or through a dealer in this state. Likewise, a dealer may not sell a new recreational vehicle in this state without having first entered into a dealer agreement with a manufacturer. Every dealer agreement must include certain components, including a designation of the area of sales responsibility exclusively assigned to the dealer.
• Termination of Dealer Agreements Regulated: The act establishes procedures for terminating, canceling, or failing to renew a dealer agreement. Under the act, a manufacturer may terminate, cancel, or fail to renew a dealer agreement only for good cause. A dealer may terminate, cancel or fail to renew a model, make-line or entire agreement with a manufacturer or distributor with or without good cause at any time by giving 30 days’ written notice to the manufacturer. If the dealer shows good cause exists to terminate the agreement, the manufacturer or distributor is required to repurchase certain inventory if the dealer so elects.
• Dealer Ownership Changes: The act requires a dealer who wishes to make a change in ownership to give the manufacturer or distributor written notice at least 10 business days before the closing, along with certain documents, and provides that the manufacturer or distributor may not object to the proposed change except for certain specified reasons.
• Warranty Obligations: The act establishes requirements regarding warranty obligations, including that a warrantor specify a dealer’s obligation in writing, compensate the dealer for warranty service performed by the dealer that is covered by the warranty, and provide the dealer with the schedule of compensation to be paid and the time allowances for the performances of any work and service.
• Inspection of RVs: The act establishes various obligations for dealers and manufacturers and distributors regarding new recreational vehicles that are damaged prior to transit to the dealer or are damaged in transit to the dealer when the manufacturer or distributor has selected the carrier or means of transportation.
• Dispute Resolution: The act provides mechanisms for resolving disputes between a dealer, manufacturer, or warrantor. The act requires a dealer, manufacturer or warrantor injured by a violation of the act by another dealer, manufacturer or warrantor to attempt to resolve the dispute through mediation before the party alleged to be injured may bring a civil action in circuit court.

For any further information about the new Wisconsin law, please contact Michael Ochs, director of state government affairs, at mochs@rvia.org.