Pub. 12 2013-2014 Issue 3

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S F A L L 2 0 1 3 20 new jersey auto retailer Your Dealership You Do Not Have to Submit to Unreasonable Demands to Relocate or Re-Brand BY MARVIN J. BRAUTH, ESQ. For more than a decade now “branding” has been the rage among automobile franchisors. There is hardly a franchisor that does not have some brand elements and design features that it pushes its dealers to incorporate into their facilities. Some franchisors have even insisted that dealers, who have already redesigned their facilities to conform to the franchisor’s image requirements recently, redesign those facilities AGAIN after the franchisor’s brand elements have been changed. For even longer than branding has been the rage, many fran- chisors, both domestic and import, have been pushing dealers to move their franchises from their long standing locations to the “highway” or “auto row” or some other, “more desirable,” location. Franchisors use all types of tactics to get their dealers to re-brand or relocate. Some cajole dealers to agree with assurances of vastly improved sales. Some offer financial incentives for dealers who comply. Others use pressure or structure incentive and other pro- grams to disadvantage dealers who do not comply. Many use a combination of all these tactics. Franchisors also seek to get their way by inserting facilities or relocation requirements in their buy- sell transaction approvals. What can a dealer do, then, if faced with an unreasonable facilities modification or relocation demand and pressure from a franchisor? From a psychological perspective, resisting pressure from one’s supplier is hard. However, the New Jersey Franchise Practices Act has many provisions that make it easier and give comfort that the franchisor cannot take penal action in response. In one such provision, the Franchise Practices Act broadly prohibits franchisors from imposing unreasonable facilities re-