Tennessee Gov. Bill Haslam on April 12 signed the Tennessee RV Franchise Act of 2016 into law.
The RV Industry Association, Tennessee RV dealers, the Tennessee Automotive Association, the state’s Motor Vehicle Commission and the Tennessee legislature negotiated the law, according to a news release from the RVIA.
Tenessee joins 17 other U.S. states with RV-specific franchise laws on the books.
The new law will be in effect for manufacturer/dealer agreements entered into or renewed as of July 1, 2017. Changes to the licensing law will be in effect as of Jan. 1, 2017.
The Act removes the RV industry from the state’s automotive franchise law and establishes an RV-specific law that addresses key issues critical to the RV market in a way that takes into account the difference between the business models of the automotive and RV industries.
According to the text of the bill, dealers may cancel franchise agreements with manufacturers with or without cause with a 30-day notice.
Under the rule, dealers have the burden of proving cause for termination.
In that case, manufacturers have a 30-day window to reply to the dealer, and offer to fix the claimed deficiencies in the subsequent 90 days.
If the manufacturer decides not to, or is unable to fix the claimed deficiencies, the RV maker is required to repurchase undamaged stock.
“This is a very solid piece of legislation that is fair and reasonable for both sides,” said Christine Siksa, RVIA director of government affairs. “We applaud and thank the Tennessee RV dealers for their leadership and tenacity in working with the RV and automotive industries as well as the legislative and regulatory arms of the Tennessee state government to pass this bill.”
Tennessee is the 18th state where the RV industry has been extracted from the automobile franchise statutes and an RV-specific franchise law enacted.
To download a full text of the bill, click here.