Dealer Franchise Laws Provide Many Benefits


If you own an automobile dealership franchise, then you know that there are a lot of laws to follow. Dealerships are subject to more laws than most other industries, but there is a good reason for that. Cars are expensive, contain hazardous material, and require maintenance by trained technicians. They are also potentially dangerous if used incorrectly. That is why there are so many strict regulations around purchasing and operating a car.

Despite the excessive amount of laws, dealership franchises have many benefits for consumers. For instance, the competition among all of the different franchises helps keep the prices low for consumers. Also, dealerships are able to service vehicles and handle repairs with ease due to their extensive warranty coverage.

Franchises also offer a great benefits to manufacturers because, instead of building their own dealership from scratch, manufacturers can sell their cars through franchise dealerships and still make a decent profit.

Dealership franchises also provide lots of benefits to the local community. According to research done by NADA, locally franchised dealerships employ more than 1.1 million Americans. Also, 15% of all state and local tax revenue comes from dealerships.

All in all, while dealership franchise owners may not like dealing with the excessive laws and regulations, they can be comforted by the knowledge that these regulations are protecting not just themselves, but the whole community. If the dealership franchises did not function smoothly, then consumers and manufacturers might both suffer financially, the tax revenue would decrease, and many jobs would be lost. This is just another example of the important role laws play in our society.