Winnebago Execs Weigh in on Franchise Laws

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Bob Olson

States like Texas and Louisiana with franchise laws that require RV manufacturers to buy back units from dealers for ”no good cause” have placed a burden on the RV industry, particularly as it recovers from the worst downturn in more than 30 years, according to Roger Martin, Winnebago Industries Inc. vice president of sales and marketing.

Roger Martin

”We can argue whether those laws are good or bad all day long, and certainly we see them as bad because it provides us with financial challenges where, if a dealer just decides overnight, ‘I’m not going to be in the motorized RV business anymore’ and they can return inventory to us, it’s a pretty tremendous burden,” Martin said.

Martin offered that assessment during a wide-ranging interview with Winnebago executives at the company’s Forest City, Iowa, headquarters that will be published in the May issue of RVBusiness.

Franchise laws requiring manufacturer buy-backs have been an issue for years, but attention on them among manufacturers has been refocused as the nation recovers from the Great Recession.

”Naturally, we are opposed to these kinds of laws, but my fear is that (dealers in) states that have them are envied by states that don’t have them,” Martin said.

This year, 14 states have considered franchise legislation with ”buy-back” provisions in them.

”The impact on this industry is going to be substantial if we see this happening,” Martin said.

Bob Olson, Winnebago president and CEO, told RVBusiness that separate laws should be written for the RV industry, which often is lumped in with automotive manufacturers when such statutes are considered, especially with the transition that automotive manufacturers have gone through in the last year and a half.

Olson said it should be a “top priority” of manufacturers to separate the two industries with regard to franchise laws.

”You’ve got GM, Chrysler, Ford or whoever who tells dealers they have to have a facility that looks like X and can only sell their product,” Olson said. ”And if something happens, maybe there is a responsibility on their part.

”But the RV side is a little different. We need to somehow separate the two. We don’t tell (RV dealers) how to run their shops. We have no say whether they have one product line or eight product lines.

”These state laws and legislation are just added negatives to what the economy has done to manufacturers. It’s one of those variables that just compound a very difficult economic time that we’re in.”

According to Martin, ”In the states that have those laws, we’ve counseled and worked with our dealers as much as we can so that they don’t get into those situations where they have inventory that ages on them and presents them with a problem they can’t get out of.

”We’re arguably being more proactive so that a dealer doesn’t get into that situation like they did in ’08 and ’09.”