Manufacturers like Henry Ford, who ran factories at “full tilt,” set the stage for the state franchise laws. During this time, manufacturers were producing as many vehicles as possible despite the dealer ordering them or there being a true market demand.

A sales and service agreement outlines the rights and responsibilities of the dealer and the manufacturer. The contract is non-negotiable and can say whatever the manufacturer wants; however, state law (NH Dealer Bill of Rights) determines which portions can be enforced.

New Hampshire, like other states, has several clauses in their franchise law designed to protect you, the motor vehicle business. There are provisions for instances such as the right of first refusal, payment of advertising, manufacturer reimbursement, all the way to retail rates for parts labor and more.

A recent success story highlights a member business who was told by his manufacturer that he would need to pay upwards of $10,000 to replace a damaged piece of his exterior sign.

… Not so fast …

Prohibited Conduct, Section 357-c:3 outlines, “Construction: Vendor Choice Re: Signs”:

“… signs or other franchisor image or design elements or trade dress to be leased to the dealer, the right to purchase the signs or other franchisor image or design elements or trade dress of substantially similar quality from a vendor selected by the dealer; provided that the signs, images, design elements or trade dress are approved by the manufacturer.”

The outcome of this story is the member business repairing his sign for less than $500!

This serves as an excellent reminder to familiarize yourself with NH Franchise Law. NHADA has developed a linked PDF allowing you to jump from section to section and can be viewed at https://cdn2.hubspot.net/hubfs/4829685/2015MemDir_DBR.pdf.

For questions on this matter, don’t hesitate to contact me personally at dbennett@nhada.com or (603) 224-2369.