New Hampshire bill would expand franchised dealer rights

Publish Date: 
Apr 2, 2013
By Holly J. Wagner

SB 126 would require OEMs to make dealer files accessible, and reduce influence over store renovations.

CONCORD, N.H. –  Dealerships have mixed feelings about legislation that would amend the state's Dealer Bill of Rights to give franchisees more control over their businesses. They say it would make more difference to some than others.

New Hampshire Senate Bill 126 changes the relationship between retailers and their manufacturers and distributors. It primarily addresses issues for automotive dealers; however, the provisions also would cover powersports, RV and even farm equipment franchise-holders. SB 126 passed the state Senate March 21 on a 22-1-1 vote. It will go to the House for review and amendments before a vote there later this year. 

Read the full text of SB 126 HERE.

SB 126 would require OEMs to provide dealers with access to their own "dealer files" once a year. It also would give dealers more control over store renovations, and would require more OEM transparency when it comes to incentive programs, market area changes and performance metrics.

Specifically, the bill would:

  • Modify how OEMs measure dealer performance with regard to exports and out-of-territory sales.
  • Require OEM transparency or uniformity for incentive programs, market area changes and sales performance metrics/reports.
  • Require OEMs to give their dealers access to their "dealer files" on an annual basis.
  • Give dealers greater control over adding a franchise, no longer limiting them to housing a separate vehicle franchise in a separate facility.
  • Prevent OEMs from requiring dealers to renovate more often than every 15 years, and to show why a renovation is necessary even after 15 years. It also would give dealers more control over site selection and showroom floor plans. FInally, dealerships would have more freedom to source lenders, tools and building materials locally, rather than being required to go through OEM-designated vendors and suppliers; this would extend to signage as well.
  • Extend franchise protections to service-only businesses.
  • Clarify an existing law requiring manufacturers to reimburse dealers at retail price for parts used in warranty repairs.

While the bill was designed primarily to address concerns from automotive dealers in the state, it would apply to powersports dealers as well: In New Hampshire, the same laws govern auto, truck, motorcycle and powersports and RV dealers. SB 126 would bring construction, farm and forestry equipment dealers under the same law.

The Alliance of Auto Manufacturers, which represents a dozen domestic and foreign automakers, opposes the bill and took out a full-page ad in several New Hampshire newspapers arguing against it. The organization asserts that the bill creates government intrusion into private business. "Why should our State House pick business winners and losers?" the ad asked. 

The association contends that dealers raise service prices to make more money on warranty repairs they charge to OEMs, driving up consumer prices.

The state Farm Equipment Manufacturers Association also opposes the bill, saying the additional warranty costs would be a burden to some manufacturers.

So far, the powersports industry has not issued a public comment. “Although it could change, the Motorcycle Industry Council has not to date taken a position on this bill,” an MIC spokesman told Dealernews. American Honda was unable to comment by press time. Harley-Davidson did not respond to our requests for comment. (Note: Dealers commenting for this story are multiline dealers; all of the the single-line dealers Dealernews contacted about the bill declined to comment.)

Miles Cook, owner of Rochester Motorsports, a Honda, KYMCO, Kawasaki, Suzuki and Yamaha franchisee in Rochester, is a big supporter of the SB 126. “We are very much in favor of it," he said. "It fosters a more open, honest, transparent, collaborative relationship between the manufacturer and the dealer. I can’t imagine why the manufacturers would not want that kind of a relationship with dealers.” (continued)