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Dealers' association says Giant lawsuit shows dealer agreements are one-sided

Published March 23, 2016

COSTA MESA, Calif. (BRAIN) — The National Bicycle Dealers Association says the lawsuit between a Florida retailer and Giant Bicycle shows that many dealer agreements are one-sided or poorly understood. 

Florida retailer Frances Kane won a $3.25 million jury verdict against Giant over allegations of fraud. Giant is appealing the verdict

The NBDA released a statement about the case on Tuesday.

"The NBDA has long shared the concerns of dealers about the imbalance of legal protection available to them based on dealer agreements that are written by and often favor suppliers," NBDA president Todd Grant said in the statement. "This suit clearly shows how some vendors believe that they have created a legal environment that is one-sided in their favor, and opens the door to abuse of the relationship. Whether it is control over inventory, managing store floor space, or protecting a dealer's investment in growing and establishing a market, fair dealer agreements, adhered to by all parties, are a key foundation that allows dealers to invest in building the market, without fear of secret or capricious actions by the vendor," he added.

While not stating a position on the specifics of the lawsuit and the appeal, Grant noted that a legal agreement that protects the vendor but offers little or nothing to the dealer does not reflect a true partnership.

"Some vendors are simplistic and only want as much of a dealer's open-to-buy as possible, with as little commitment from the vendor as possible, but this is not a sound basis for a fruitful business relationship," Grant said.

"There are many brands that have dealer agreements that work well for both parties. But mixed messages are sent when brands require more of their dealers but offer little or no protection to them, or defined expectations for the brand," he added.

Grant said the NBDA will continue to watch the Giant case, and will continue to press for dealer agreements that more clearly define the expectations of both parties, are fair to both parties, and that are reviewed regularly so each party knows where they stand. 

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