A new franchise agreement for Alfa Romeo and Fiat storefronts in the U.S. has upset dealerships as it may subject their business to additional burdens and risks. According to Automotive News, more than 20 dealerships in California have filed legal protests against Fiat Chrysler in response to the agreements, including those owned by the chairman of the FCA National Dealer Council.
In December, FCA rewrote its franchise agreements for Fiat and Alfa Dealers. The newly revised contract would require dealers to follow procedures laid out in special “manuals” maintained solely by FCA. The manuals would include guides on general facility requirements and dealer operations, requirements for net working capital and more and could be changed by FCA with little notice. Gavin Hughes, a California attorney that filed almost half of the protests, said the dealers are worried that FCA may begin making changes to the manuals whenever it likes, leaving it to the dealers to remain up to date with the changes.
The new agreement also allows FCA to sell Alfa Romeo or Fiat branded merchandise “through any channel of distribution that FCA US may select in its sole discretion” including non-authorized dealers, which could mean lost sales for dealers. It also includes overly personal and over reaching requirements such as forcing dealers to “energetically, actively, aggressively and effectively,” push certain Fiat or Alfa products.
AN was only able to collect data on formal protests filed in California, which is the strongest state for Fiat sales and is soon to be a key market for the luxury and performance-oriented Alfa Romeo brand. There are currently around 200 Fiat and 100 Alfa Romeo storefronts across the United States, however FCA recently announce plans to add 400 stores in the U.S., some of which will be for Alfa and Fiat.