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BSM WORKS WITH STATE ASSOCIATIONS TO STRENGTHEN DEALER FRANCHISE PROTECTIONS

By: Shawn D. Mercer, Esq.

BSM WORKS WITH STATE ASSOCIATIONS TO STRENGTHEN DEALER FRANCHISE PROTECTIONS

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We at BSM continue to work with a number of state dealer associations to draft and promote the passage of state dealer franchise law protections that are designed to better level the playing field for dealers.  The legislative agenda varies from state to state.

A summary of select provisions being pursued this year include:

  1. Preventing unreasonable facility construction and renovation demands;
  2. Compensation for used motor vehicles that are subject to an open recall and replacement parts are not available;
  3. Vendor choice in lieu of always using the factory’s preferred providers for facility elements, non-essential tools, etc.;
  4. Enhanced data protection;
  5. Fair compensation for dealers for warranty and recall work;
  6. A prohibition against the imposition of surcharges related to dealer requests for increased warranty reimbursement;
  7. Banning unreasonable performance measurement criteria and requiring the consideration of unique market factors if the manufacturer claims inadequate dealer performance;
  8. Requiring fair and adequate allocation of product so as to allow the dealer to meet reasonable sales objectives;
  9. Protection of dealer documentary fees as a part of a factory plan or program sale; and
  10. Permitting the sale of non-factory service contracts and debt cancellation agreements.

The foregoing summary is only a partial description of the legislative provisions currently pending before state legislatures across the country.  A periodic review of your state franchise laws is advisable.