Dealership Franchise Laws & Tesla

Mike Jeffs

At our recent Presidents Club event, we interviewed attorney, Jeff Roberts. Jeff is a long-time dealership legal expert who addressed the audience of dealer executives at Presidents Club and shared with us his view on how dealership associations are approaching the Tesla/Franchise Law situation. Do you agree or disagree with, Jeff? What is your view on Tesla challenging the "status quo?"

Chris K Leslie

Can we take a moment to talk about Dave's beard.. It's awesome... 


Roberts is right though. If dealer groups keep poking the bear they are eventually going to the business end of that bears foot. I might be reading between the lines here but what I hear Roberts saying is that franchise laws are in fact outdated and ripe for reform and if dealers aren't careful thats exactly what is going to happen. 

Personally, I think he's right.

mark rask

I feel that he is right as well. Dealers have had the same franchise laws for many years and the auto industry has a big bulls eye on it right now

Clint Jones

I can't help but wonder why this is such a big topic...and has been for a few years now.

Manufacturers don't want to sell direct to the consumer.  They have tried it.  It doesn't work.  It is like staffing your sales floor with accountants.  Sure they will sell a few, but they won't get the job done.  They are fish out of water.

Tesla is such a unique niche that caters to people that have enough money that things like service and trade ins just don't matter to them.  I just don't see the business model as a threat when the masses are plugged into the equation.

Adam Lee Herrick

It's not so much about OEM not wanting to sell direct to the consumer (which we will just go ahead and pretend is accurate for the sake of making the actual point here and not getting side-barred). The real "danger" that that spotlight of this "big topic" is pointing to is the fact that if and when Franchise laws see reform - what that means to Dealer Principles such as yourself. If the OEM's find alternate legal channels and no longer find a need for the traditional Franchise Dealer do you REALLY not think they would support.....if not dare I say spearhead the lobbying to change the laws. Instead of spending so much time criticizing Tesla and Musk, or worse even, downplaying the disruption and effectiveness of the model - I wish Franchise Dealers would look to what they can do to better line up with a mass of consumers who are forcing options like Tesla to come into existence.......and happily supporting their entry. That should be speaking VOLUMES to you guys.

Efty Emel

In response to Clint Jones above. On the contrary. Tesla owners VERY MUCH care about service and trade ins. It's one of the main reasons they love the company: the service is great, it isn't a profit center, so it's not manned by sales people disguised as service personnel.  And over 400,000 people have placed orders for the $35,000 Model 3, a car that won't ship for more than a year from now... The Tesla model of direct sales is a freight train running at full speed right at the old-fashioned US dealer cartel/monopoly.  No amount of bribing legislatures is going to save legacy franchise dealers at this point.  Just like newspapers, broadcast TV, bookstores, movie theatres, and many other industries, legacy auto dealers have to face the fact that the future has caught up with them, and they can stomp and kick and whine and try to resist change as much as possible, but it's of no use. Dealers are obsolete.


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