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Cadillac Issues New Exclusive Use Agreements

Cadillac Issues New Exclusive Use Agreements


Cadillac has issued its Strategic Network Initiative Agreement to certain dealers seeking an agreement for the dealership to conduct exclusive Cadillac operations in exchange for payment of funds over the course of three (3) years.  This Agreement harkens back to the Exclusive Use Agreements GM was asking dealers to sign in the years prior to the bankruptcy. Like that Agreement, the Strategic Network Initiative Agreement should be viewed with caution.

The Agreement requires that the dealer commit to operating only the Cadillac franchise from the dealership for a period of ten (10) years.  Among other concerns, there is no exception for a reduction in the Cadillac business which would necessitate the addition of another franchise to the facility to cover overhead or an exception for the elimination of your Cadillac franchise by GM without cause.  Some Cadillac dealers have determined that the amount of money being offered is not sufficient to bind their dealership to such restrictions.

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