When Silence Isn't Golden

A dealer challenges a termination by a franchisor for deficient sales performance. The dealer claims his sales territory includes geographic areas for which he should never have been responsible. The manufacturer responds that the dealer never complained when the territory was redrawn to add the new areas.

A dealership complains to the state because it cannot do an off-site sale at a location where it has been held for years because the franchisor removed from the dealer's market area the census tract where the offsite sale location is located. The franchisor responds that the dealer didn't complain when the market area reduction took place.

A dealer complains about chargebacks for new vehicles exported. The franchisor responds that the dealer did not complain when the franchisor sent the initial notice of potential export chargeback.

Read every communication from your franchisor. General policy documents, normal marketing and product communications, and those pertaining to service or parts operations should be routed to managers in charge of those departments. Those that may affect the franchise or that contain warnings about the dealership's performance must be handled by the dealer.

Get help. Is the letter sent to you being sent to other dealers, too? Or have you been singled out for the action? Your state association may be able to determine whether it is a mass communication or not. An attorney knowledgeable about dealership law will be able to help.

Know your state law rights. State law protections are critical. Understand those protections. If you have questions, ask the experts — your state association executives or an attorney knowledgeable in state-dealership law.

Answer all communications that are potentially prejudicial or a threat to your dealership. Read the correspondence thoroughly. Understand each point. Sometimes, the manufacturer's complaint will simply be overblown. Sometimes it will be a complaint about deficient performance in a matter that is not required by your franchise agreement. Sometimes it will be a serious issue, but the information may be outdated by changes you have already made. Answer every point.

If the claims are based on measurements that appear to be wrong, request detailed explanations.

Don't be afraid to ask for a meeting to state your position and to request changes.