Florida dealership protection law takes effect

A new dealership protection law in Florida prohibits manufacturers from telling dealers to renovate facilities more than once every 10 years. It also prevents automakers from enforcing certain sales standards for their franchised dealerships in the state.
The new law creates the state’s first finite period for dealers to have to comply with a facilities program, and crafts new provisions for how incentives can be allocated to dealers during the 10 years after a manufacturer-ordered renovation. The bill, signed into law Monday by Florida Gov. Rick Scott, passed unanimously in the Senate, and was approved 104-12 in the House.
“We saw it as a pro-dealer piece of legislation. So we looked at the language and we endorsed it,” said Ted Smith, president of the Florida Automobile Dealers Association.
The law’s core provision says that if a dealership has completed a facilities renovation and complies with the franchise’s standards, that dealership cannot be required to undergo another renovation within 10 years.
Monetary benefits
While some incentive programs tied to renovations are considered optional, Smith said, dealers who opt not to participate can lose out on the monetary benefits of the program, which makes it more difficult for those dealers to compete with those who do participate.
The new law ensures incentive programs remain available to dealers during the standard grace period after a facility improvement, whether or not they participate in the next factory-requested improvement. Dealerships keep all prior benefits, and are entitled to any increase in those benefits in the time leading up to when new facilities rules take effect.
In addition to the renovation-related provisions, the law prohibits automakers from creating or enforcing unfair sales standards, in line with similar legislation passed in Maryland this year. The law precludes the use of standardized retail sales-effectiveness ratings that do not take local and regional differences into account.
“You have to localize things. You can’t say to a dealer in South Florida that we are applying the same standards to someone in the Panhandle of Florida, which are obviously different markets,” said David Leibowitz, general counsel for Braman Management Association, who was involved in drafting the bill.
In writing
If performance standards are enforced, the law states, a dealer is entitled to an explanation, in writing, from the automaker, outlining how the criteria were “designed, calculated, established, and uniformly applied.”
The legislation took effect upon signing.
Fuente: Automotive News