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Manufacturers have to make profits, but when deciding to terminate a dealer, the smarter manufacturers include in their calculations the payment of fair compensation to the dealer for the value of what they lost. Many states have laws protecting dealers from terminations "without good cause," and at least in those states it can cost the manufacturer a good bit more if they don't treat the dealer fairly from the outset, and the dealer chooses to litigate (for example, the recent Maintainco v MCFA case in New Jersey covered in earlier Forkliftaction.com). However, it's complicated valuing a dealership - - to pay a truly fair price, it's not just the lost profits, there is also the human cost of closing down a business for both the owners and the employees - - and manufacturers don't understand (or are not willing) to pay those costs.
  • Posted 6 Feb 2010 00:43
  • By Forklaw
  • joined 12 Jun'09 - 5 messages
  • New Jersey, United States

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