Management

  • Special Report: Franchise Law

    Wednesday, November 30, 2016 | Holly Wagner

    Statutes and other rules from all 50 states create a complicated quilt of Dealer protections

    By Holly J. Wagner, Senior Editor

    Editor’s Note:
    Dealernews recently completed a comparison of state laws governing on-road powersports dealers in an effort to help Dealers understand how their states handle relations with their respective vehicle manufacturers (OEMs). Information has been sourced from the statutes themselves, which are subject to updating and judicial interpretation. We will endeavor to update the information as it becomes available. Information presented by Dealernews is not intended as legal advice or a substitute for legal advice; rather it is meant to help Dealers understand the complexity of laws under which they operate, and seek the correct legal advice when necessary.

    IN BUSINESS, there’s no substitute for a good lawyer, and one need only look at statutes governing Dealer-OEM relations for proof.

    Of course, it all depends on where a Dealer does business. In many states, motorcycle Dealers are covered under “New Motor Vehicle Dealer” statutes that were written for automotive retail. Eight states have laws that specifically address powersports Dealers. Another 17 states have “Franchised Dealer” statutes that define a Dealer agreement as a franchise agreement, regardless of what an OEM wants to call it.

    Dealer-OEM relations may also be covered by multiple laws within a state. Some Dealer statutes are the “final word” on motor vehicle retail matters. In other states, Dealers may be covered by additional state laws governing franchise or other business relationships. Clearly, when it comes to a dispute, a Dealer’s attorney may have multiple legal avenues with varying chances of success.

    More states are adding powersports-specific laws. In 2013, just six states (Colorado, Maine, Montana, North Dakota, Utah and Washington) had powersports-specific laws. Since then, South Carolina and Virginia have added either separate laws or separate sections for powersports Dealers under their motor vehicle Dealer laws.

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