| Protecting the Rights of Automobile Dealers for Over 25 Years |
| Franchise Relations and the California New Motor Vehicle Board |
| When new car dealers have disputes with "the factory", we advocate and negotiate on the dealers' behalves and, if necessary, prosecute or defend formal Protests and Petitions filed with the California New Motor Vehicle Board. These administrative cases include so-called "ten-mile rule" establishment and relocation disputes, as well as protests of manufacturers' attempts to terminate dealer franchises, or to impose chargebacks following warranty or sales incentive audits. |
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| Lemon Law Cases and Other Consumer Claims |
| In response to an ever increasing number of lawsuits brought against dealers by their customers for product or sales related complaints, our firm provides representation to the dealers sued, usually with a view toward proving that the customer's claim is without merit or, in the alternative, determining which defects in workmanship ought to be the responsibility of the party who manufactured the vehicle. Occasionally, our work in this area has been at the behest of dealers' insurance carriers, and when appropriate, we tender the defense of such cases to vehicle manufacturers. |
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| Advertising and General Business Law Advice |
| Since automobile dealers and their associations are major media advertisers, we provide consulting services of a preventative nature as to the lawfulness of proposed advertising and other promotional activities. Upon request, we review video tapes, television and radio scripts, and newspaper proofs, as well as direct mail circulars and flyers, to see that legal details have been tended to and to minimize client exposure to false advertising claims. |
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| DMV, BAR and DA Cases |
| We defend dealers who have been charged by governmental agencies with civil or administrative violations of the law. When the Department of Motor Vehicles threatens to suspend or revoke a dealer's license, or when the Bureau of Automotive Repair threatens to suspend or revoke a service department's Repair Dealer's Registration, we will administratively litigate the matter or, when feasible, negotiate a reasonable resolution of the pending charges. We also defend dealers against civil unfair business practice actions brought by individual plaintiffs or District Attorneys, who often seek substantial monetary penalties from the accused. |
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| Facility Upgrade Demands/Dualing |
| Manufacturer representatives have been after you to invest significant sums of money to improve your physical facilities, including providing new or exclusive sales and service facilities, committing to the purchase and installation of new signage and decor throughout the dealership and/or relocating the entire dealership to a larger, more visible location. The manufacturer will not consider renewing your franchise agreement for the full term unless you agree to these demands. What are your rights? What is the best course of action under these circumstances? How do you decide? |
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| Performance Issues and Franchise Renewal |
| Over a period of time, the manufacturer has been sending you letters indicating that your sales penetration and/or CSI scores are below average and must be improved if your franchise agreement is to be renewed. In fact, the suggestion has been made that if your sales and/or CSI performance does not improve, the manufacturer reserves the right to take action against your dealership under the franchise agreement, up to and including termination of your franchise. Under these circumstances, the manufacturer has demanded that you sign an amendment or addendum to your agreement requiring you to meet minimum sales and/or CSI performance indices in a given period of time. Should you sign it? What if you don't? What is the best way to handle the ongoing stream of written and oral demands from the manufacturer regarding these issues? |
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| Market Infringement |
| Manufacturer representatives have advised you that they intend to establish a new dealership of the same line-make more than ten miles from your dealership and you are convinced, for a variety of reasons, that the new dealership will severely damage your business. Do you have any rights under these circumstances? If so, what are they? And how quickly must you act? |
| The manufacturer has decided to establish or relocate a new dealership of the same line-make within ten miles of your dealership. Manufacturer representatives have asked you to sign a waiver giving up your rights to protest against the establishment or relocation of the new dealership. At present, you are not convinced that the new dealership will have any significant adverse impact on your dealership. Should you sign the waiver? If you do, what are its implications? And for how long? |
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| Selling Your Franchised Dealership |
| You wish to transfer your franchise to a new owner who has made an acceptable offer to you. The factory representatives have already advised you the buyer will not be approved. What should be your first response? Can you go through with the deal? |
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| Dealer Successors |
| You wish to name a spouse, son or daughter as a successor to your franchised dealership business, but manufacturer representatives have indicated the individual(s) you've chosen will not be approved. What are your options? Can you challenge their decision? |
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| Warranty or Sales Incentives Audits |
| You have recently undergone a warranty or sales incentive audit and you have been advised by factory representatives that the manufacturer intends to charge back significant sums of money as a result of discrepancies allegedly uncovered in the audit. A review of the audit report indicates that many of the discrepancies noted are of a hyper-technical nature, are consistent with an ongoing course of conduct between the dealership and manufacturer in the administration of these claims, and/or resulted from an honest misunderstanding of factory required procedures. In addition, you discover that claims that are only partially defective are being charged back in whole. What should be your first response? Where do you go to obtain a fair and reasonable review of the threatened chargebacks? How can you recover any sums already charged back? |
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| Franchise Termination |
| You've received a letter from the manufacturer advising you that your franchise will be terminated in 60 days. How long do you have to respond? What steps must you take immediately? What are your chances of keeping the franchise? |
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| Product Allocation |
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Your dealership is receiving a significantly lower supply of desirable product than your principal competitors of the same line-make. You've addressed this matter in meetings with factory representatives and through a series of written correspondence, to no avail. What's next? What are your rights? How do you assert them? |
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Franchised new car dealers throughout the state are faced with these and many other questions every day. Many of them are well apprised of their rights under California law and are therefore able to make wise choices in determining how to deal with these matters as they arise, without forfeiting their rights and without damaging their relationships with their manufacturer francishors unnecessarily. The answers to the questions posed above may not necessarily be easy, depending upon the circumstances, but they are more easily arrived at, and the problems associated with them can more easily be resolved, if you are aware of your rights as a franchised California new car dealer. |
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The Law Offices of Michael J. Flanagan can help. For more than 26 years, we have devoted our law practice to the representation of hundreds of franchised new car dealers, in California and elsewhere, in connection with all of the matters illustrated above , and a host of others. If we can be of assistance to you in regard to any matter concerning your relationship with your franchisor/manufacturer, or in regard to any other legal matter, please call us, write to us, or e-mail us at the addresses or telephone numbers indicated on our Contact Us page. It will be our pleasure to consult with you and to provide you with our best advice concerning any aspect of your rights as a franchised new car dealer. |
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We’re available for a wide variety of legal consultations regarding other aspects of your dealership operations. For further details, call, write or e-mail us today. We can be reached at (916) 646-9100. |
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