The sale of a dealership is often subject to manufacturer approval.<\/p>\n
We have investigated several buy\/sell agreements that were rejected by a manufacturer and studied the important circumstances surrounding the rejection:<\/h4>\n
What is the impact on the selling dealer?<\/p>\n
Were the manufacturer\u2019s grounds for the rejection reasonable?<\/p>\n
Do manufacturer concerns about the buyer translate to the dealership at issue?<\/p>\n<\/div>
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Franchise Agreement<\/h2><\/span><\/div><\/div><\/div>
Dealer agreements are generally one-sided with little or no allowance for operator input.\u00a0 Manufacturers often load agreements with terms that are either vague or knowingly impossible to satisfy.\u00a0 While the legality of the contract can only be assessed by a legal professional, we have evaluated the economic reasonableness of various provisions that manufacturers have attempted to assert in contracts.<\/p>\n
Some of these terms can have a profound impact upon the well-being or even survival of a dealership.<\/h4>\n<\/div><\/div><\/div><\/div>
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Franchise Termination<\/h2><\/span><\/div><\/div><\/div>
Franchise termination is the business death penalty.\u00a0 Not only is the wealth of the dealership lost, it is often simply transferred to a preferred operator.\u00a0 When the stakes are so high, the justification for termination must be subjected to the highest level of analytical scrutiny.<\/p>\n
We have reviewed an extensive number of terminations and delved into the important issues:<\/h4>\n\n- Do the manufacturer\u2019s sales performance calculations account for the unique characteristics of the market?<\/li>\n
- Are the CSI measurements reliable?\u00a0 Were allocations sufficient to meet the sales requirements?<\/li>\n
- Has the manufacturer behaved reasonably in its dealings with the dealership?<\/li>\n<\/ul>\n<\/div>
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Incentives<\/h2><\/span><\/div><\/div><\/div>
The incentives offered to dealers by manufacturers can be the lifeblood of a business or the source of paralyzing market inequalities.\u00a0 Some incentive programs encourage market-friendly behavior while others have been found in violation of state law.<\/p>\n
We have evaluated incentives and studied the critical questions:\u00a0 <\/strong><\/p>\n\n- Are the incentives fair?<\/li>\n
- Do the incentives seize operational control from the dealers?<\/li>\n
- What happens if the incentives tilt the playing field?<\/li>\n<\/ul>\n<\/div>
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Relocation Protest<\/h2><\/span><\/div><\/div><\/div>
The relocation of a dealership in an area already served by another dealership of the same line make is often contentious.<\/p>\n
Most states have specific statutes governing the situation, and we are well versed in the relevant factors for consideration:<\/h4>\n\n- How will the new dealership impact the existing dealer(s)?<\/li>\n
- Are manufacturer claims of low performance in the market accurate?<\/li>\n
- Are there local factors that need to be considered?<\/li>\n<\/ul>\n<\/div>