Dealers push for new franchise laws
August 18, 2003
Filed under Features
Powersports dealers on two coasts recently have pushed new franchise laws which, they say, will provide better business opportunities and stabilze relations with OEMs. Washington state has a new law and dealers in New York are encouraged by recent steps in their five-year fight to expand coverage of the state’s franchise law to include all powersports equipment.
The Washington State Motorsports Dealer Association (WSMDA) says a new bill recently signed into law by Gov. Gary Locke will help the state’s powersports dealers by better defining the specific rights of dealers.
Mark Briant, WSMDA executive director, says the law, passed with no dissenting votes in the legislature, defines such concepts as protected dealer marketing areas, survivor rights for family members, a non-compete clause by OEMs, retail warranty reimbursement and predatory practices. Briant says the law also provides for arbitration when dealers and OEMs have disputes.
“Our previous act was a ‘motorcycle dealer’ act and only covered motorcycles,” Jim Boltz, owner of Cycle Barn and chair of the WSMDA Board of Directors, told Powersports Business. “Now we cover virtually all current motorsports products, as well as new ones that may come along.
“It sailed through the legislative process and was a win-win situation for all,” he said, crediting the help of the Motorcycle Industry Council (MIC) and its lobbyists.
For more information regarding the WSMDA, or to read the full bill as signed into law, visit www.wsmda.org.
Meanwhile, in New York, Denis Johnson Sr. and many of his fellow New York powersports retailers are attempting to modify a 20-year-old motorcycle franchise law to include other powersports vehicles, such as ATVs, PWC and snowmobiles. Johnson is dealer principal at Kuyahoora Outdoor Center in Poland, NY, and a 35-year Ski-Doo retailer.
“The intent is to protect powersports dealers from various manufacturer initiatives that may not be in their best interests, in much the same way automotive, motorcycle and camper dealers have been protected for many years,” he told Powersports Business.
As it stands right now, Senate Bill S697B, sponsored by Sen. Seward, is in the Transportation Committee and Assembly Bill A1154B is in the Rules Committee. While Johnson is confident about A1154, he says his concerns are for S697B because the Senate only meets for a short time in September and usually uses the meeting time to put out year-end fires.
“Our task now is to turn this into a fire, and I’ve contacted a lobbyist who has agreed to help us with this,” Johnson said. “If the sponsors can get the committees to move and have the House and Senate pass the bills and the governor sign them, they would become law in the fall, effective immediately upon signing.”
But why this law, and why now? “Five years ago, when we first discussed the idea of submitting this bill with the people on the rules committee, it was intended to prevent OEMs from forcing dealers to purchase equipment that was not in their best financial interest,” Johnson explained.
“It’s a method to alleviate what may be unfair quotas and goals dealers are confronted with, and not radically different from the laws enacted for other markets. In fact, it’s virtually identical. It takes the existing law, which has been in affect for something like 20 years, and modifies the description to include powersports products like ATVs, PWC and snowmobiles.
“For instance,” he continues, “every quota I had last year was raised significantly for this year. If I remember correctly, my Level 3 quota this year – my minimum order – was approximately 30% higher than my Level 1 quota from last year. The manufacturer would not negotiate the level, and wouldn’t even talk to me about it.”
Johnson says he is amazed that some dealers are unwilling to call their representatives to support the bill, saying he believes those particular retailers are “scared to death of the manufacturers” and don’t want to admit that they know about it, support it and want it to happen.
“I would love to have a bunch of dealers contact their senators and assemblymen to support the bill,” he said. “It’s certainly in the best interest to insure their longevity.
Marine dealers may be succeeding in improving OEM relations faster than powersports dealers. On July 28, a meeting in Orlando, Fla., involving boat manufacturers, the National Marine Manufacturers Association (NMMA), boat dealers and the Marine Industries Association of Florida (MIAF) resulted in an agreement through which a dispute resolution board will be formed to give dealers and manufacturers a new way to settle disputes.
It was the fourth such meeting for Florida dealers and manufacturers in the past 10 months.
The non-binding rulings of the dispute resolution board would be patterned after the BoatU.S. “BetterBoats” program. While participants agree that details are far from being decided, most recent discussions outlined a process by which representatives of the manufacturers, dealers and a third party – none of whom are party to the dispute – would hear the position of each side and provide guidance toward a reasonable resolution.
“These meetings have been tremendously helpful,” said Monita W. Fontaine, NMMA vice president of government relations. “The concerns of dealers have been placed before the top executives of both small and large boat builders, leading to greater understanding of their concerns.
As a part of the deal, boat manufacturers also agreed to provide dealers with a list of items that should be discussed when entering into contracts or other documents that define a positive, reciprocal relationship between the two parties.
But talks weren’t all one sided. Fontaine says dealers also heard about the concerns of manufacturers, their views regarding the negative impact of dealer franchise laws, and other key issues.