And, since not all dealers and others engaged in the automobile business are licensed by the state, HB 182 mandates a comprehensive licensing structure for all those engaged in automobile business in Alaska. Some franchise agreements are only offered for short durations and require periodic renewal, even though dealers may be required to invest millions of dollars to obtain or expand their franchises. Many auto dealers are reluctant to make such substantial investments without some assurance from their manufacturer. HB 182 sets forth uniform processes to renew, amend, gain, or terminate franchise agreements. Additionally, HB 182 provides uniform guidelines for designating successors in case of death or incapacity of franchisees.
Dealers are generally dependent on manufacturers as their sole-source supplier.
Such dependence gives rise to policies that are otherwise of no value to the dealer-commonly called franchise insurance. Additionally, manufacturers, in order to reduce warranty expenses, require dealerships to perform certain administrative and other functions, oftentimes without reasonable reimbursement. In both instances, dealers have no choice but to pass along the expenses to the consumer. HB 182 clearly defines areas of manufacturer responsibility and mandates fair payment for all incurred expenses relating to warranty and extended service contract repairs. HB 182 also prohibits such manufacturer abuses as franchise insurance.