With our favourable exchange rate, many Canadians are shopping for motorcycles or accessories in the U.S.; however, as we’ve told you before, Harley-Davidson tells their dealers not to sell outside their local territories.
Not only does that mean their U.S. dealers aren’t supposed to sell to Canada, they’re not even supposed to sell to other regions of the U.S., and they’re also barred from third-party Internet sales through sites like Amazon and eBay. They’re supposed to sell to a certain geographic location, and if they don’t play by those rules, they can lose their dealer contract.
California-based dealer Laidlaw’s Harley-Davidson found this out the hard way last spring, when their franchise was terminated; however, according to Dealernews, they’ve just won it back.
Harley-Davidson was irked with Laidlaw’s for allegedly breaking the manufacturer’s fleet sales policy and “non-retail sales policy.” Supposedly, Laidlaw’s sold motorcycles or accessories to resellers, across state lines, to overseas buyers, and to rental operations, all against Harley-Davidson’s policy. Harley-Davidson also claimed Laidlaw’s provided incomplete or incorrect warranty and sales forms, so out-of-area buyers were unable to receive recall notice information.
In court, Laidlaw’s argued the fleet sales policy and non-retail sales policy were not part of the franchise agreement; they also said these policies are changed frequently without the dealers’ consent, and that Harley-Davidson wasn’t being hurt by their out-of-area sales of new bikes anyway, as Laidlaw’s could have sold used bikes to the same areas or to rental outfits. If Harley-Davidson had been injured by the practice, Laidlaw’s said they would have paid reparations.
They also said termination of their dealer agreement was too harsh a punishment, as other dealers had suffered lesser consequences. Harley-Davidson countered by saying they’ve served 19 termination notices since 2005.
In the end, Laidlaw’s had the termination reversed; however, they need to provide auditing figured to Harley-Davidson for the next three years, until their franchise agreement expires in 2014.