Florida: (850) 878-6404
North Carolina: (919) 847-8632

Florida: (850) 878-6404
North Carolina: (919) 847-8632

News

Important News and Alerts

Dealers’ Geographic Territories Matter

By Nicholas A. Bader 

With the completion of the United States 2020 Census, dealers are likely to see revisions to their geographic territories. In some instances, these will be minor, in others more significant. In any event, dealers should carefully review the changes. The automakers use a variety of acronyms or terms referring to these territories (e.g., PMA, AOR, APR, AGSSA, RMA, Sales Locality). These areas are typically comprised of ZIP codes or census tracts, so with the release of the 2020 Census and associated revisions to census maps, we expect automakers will be revising the dealer territories and dealers should take the opportunity to consider whether the boundaries are fair and appropriate.

A dealer’s assigned territory impacts the requirements and evaluations of that dealer’s operations. With few exceptions (e.g., a national park, body of water, or other uninhabited area), when more area assigned is to a dealer, more is expected of that dealer. This could mean higher sales objectives, a larger facility, more personnel, higher net working capital requirements, etc. This is a result of the sales and registration activity occurring in that additional area and typically results in the “sales performance” or “sales effectiveness” of that dealer proportionately decreasing. In some states, a dealer’s ability to challenge the addition of a competing dealership is impacted by the area assigned to it by the automaker. In these instances, a dealer should be aware of the applicable law due to the impact the addition of another dealership could have on the bottom-line.

Most states’ franchise laws contain protections that dealers should be aware of when reviewing any notice that their territory has been revised. These laws typically have rigid deadlines that must be met to challenge any addition or reduction of territory. The lawyers at Bass Sox Mercer are frequently asked to review territory changes for our clients and have the skill and experience to advise on how these changes may impact dealers.

BASS SOX MERCER

The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute an attorney-client relationship.

This website is not intended to be advertising and Bass Sox Mercer does not wish to represent anyone desiring representation based upon viewing this website in any state or jurisdiction where this website fails to comply with all laws and ethical rules.

FLORIDA

  • Phone: (850) 878-6404

  • Fax: (850) 942-4869

  • 2822 Remington Green Circle Tallahassee, Florida 32308

NORTH CAROLINA

  • Phone: (919) 847-8632

  • Fax: (919) 847-8633

  • 4208 Six Forks Road, Suite 1000, Raleigh, NC 27609

Office Building

Bass Sox Mercer© 2022 All Rights Reserved | Powered By Moxxi Marketing