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BSM FORCES HYUNDAI TO ABIDE BY FLORIDA LAW IN ESTABLISHING GENESIS

BSM FORCES HYUNDAI TO ABIDE BY FLORIDA LAW IN ESTABLISHING GENESIS

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Led by attorneys Jason Allen and Nick Bader, BSM has successfully forced Hyundai Motor America to abide by the change in distribution franchise provisions of Florida law.  Representing Hyundai dealers in several states, BSM has repeatedly held HMA accountable in its efforts to establish Genesis as a separate franchise. Initially, HMA attempted to pull the Genesis product from its existing Hyundai dealers with the intent of establishing a new, much smaller Genesis dealer body.  The Genesis dealer network would be required to provide exclusive facilities and a number expensive customer care services. This effort was thwarted when BSM, along with a number of state dealer associations, engaged state motor vehicle departments in understanding that state motor vehicle laws did not permit Hyundai from taking the Genesis vehicles from Hyundai dealers and creating a separate franchise without offering all of the Hyundai dealers the Genesis franchise.  Moreover, state motor vehicle laws prevented HMA from requiring exclusive facilities where those facilities cannot be justified based upon the dealer’s reasonably expected sales and service business. Many state motor vehicle departments refused to issue Genesis a license to operate until the state law requirements were met.

The last nail in the coffin for HMA in its efforts to place onerous provisions on Hyundai dealers to operate a Genesis franchise was accomplished last week.  As required by Florida law, HMA has agreed to issue a Genesis franchise agreement to all Hyundai dealers which is identical to the existing Hyundai franchise agreement.  The effect of this agreement is that Genesis dealers will not be required to comply with several onerous provisions which were contained in the standard Genesis franchise agreement, including the requirements to purchase a certain number of off-lease Genesis vehicles and to maintain a large loaner fleet.