GM dealers cautioned on new franchise requirements

GM dealers cautioned on new franchise requirements

WANADA Kindred-line attorney Mike Charapp is cautioning GM dealers to carefully review the Area of Prime Responsibility (APR) and Area of Geographic Sales and Service Advantage (AGSSA) designations they received in December to ensure they are properly set forth and that the dealership is not responsible for market effectiveness in areas it cannot serve.

The APR and the AGSSA are made up of census tracts as defined by the U.S. Census Bureau in the 2000 census for which the dealership will be responsible. Charapp notes that if the dealership(s) is not assigned census tracts where it may have an advantage, it may impact its access to leads from GM and the dealerships ability to do effective marketing, such as off-site promotions (where permitted by state law). More importantly, he says, the definition of the market for which the dealership is deemed responsible is a critical factor in GMs statistical calculation of sales effectiveness.

If you are made responsible to sell to consumers in census tracts where another dealer may have an equal or better advantage, it can lower GMs calculation of your sales effectiveness since another dealer will be deemed to be selling into your area, Charapp says. He notes, additionally, that dealers labeled sales ineffective by GM are subject to franchisor warnings about performance, demands for performance improvement plans, and even termination actions under state law.

Charapp notes that GM dealers have thirty (30) days within which to respond to a change in APR or AGSSA. He suggests that dealers contact GM with a reasoned argument if they believe they have been incorrectly designated.