L. Michael Hankes  |  ATTORNEY AT LAW
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Dealers Association Retains Legal Counsel

In Novem­ber 2002, the Meineke Deal­ers Asso­ci­a­tion retained L. Michael Han­kes to per­form cer­tain ser­vices for the Deal­ers Asso­ci­a­tion. Robert Volpe, Pres­i­dent of the Deal­ers Asso­ci­a­tion and Mark Zuck­er­man, a long time Board mem­ber, were instru­men­tal in nego­ti­at­ing the con­tract with Michael Han­kes. Michael Han­kes for­merly rep­re­sented 111 indi­vid­ual shops in nego­ti­a­tions with Meineke Dis­count Muf­fler Shops, Inc. (here­after Meineke) that con­cluded in 2000 and pro­duced the new con­tract that was rolled out in April of 2000. Han­kes served as lead nego­tia­tor for the fran­chisee team made up of Randy Dupuis, Joe Gry­boskik, John Odom, Ron Soto, Rick Wright and Mark Zuck­er­man who were active par­tic­i­pants in those nego­ti­a­tions. Attor­ney Wayne Mack also assisted in that process. For more infor­ma­tion about Han­kes you can log on to www.Hankeslaw.com.

In the years since the new con­tract was pro­duced, both Meineke and its fran­chisees have been faced with new chal­lenges. Among these chal­lenges is Meineke’s need to adapt to a chang­ing auto­mo­bile after­mar­ket. In addi­tion, impor­tant cur­rent issues have arisen. Of crit­i­cal impor­tance to exist­ing deal­ers are mat­ters such as encroach­ment, which have devel­oped as Meineke has attempted to expand by plac­ing new stores.

Thus far, the con­tract nego­ti­ated in 2000 has changed lit­tle. As of the pub­li­ca­tion of Meineke’s Sep­tem­ber 2002 Uni­form Fran­chise Offer­ing Cir­cu­lar (U.F.O.C.) the fol­low­ing changes had been made to the 2000 fran­chisee agree­ment which received the Fair Fran­chis­ing Seal from the Amer­i­can Asso­ci­a­tion of Fran­chisee and Dealers:

    a. In para­graph 3.2 of the fran­chise agree­ment, Meineke added the fol­low­ing addi­tional ser­vices at the indi­cated roy­alty rate:

    Ser­vice

    b. CV boots and shafts
    c. Universal joints
    d. Fuel Injec­tion clean­ing
    e. Lift sup­ports
    f. Trailer hitches
    g. Front end parts
    h. Power steer­ing
    i. Rack and Pin­ion
    j. Merchandise, includ­ing chem­i­cals, cloth­ing and other
    k. Tire rotation

    Roy­alty Rate

    5%
    5%
    5%
    5%
    5%
    5%
    5%
    5%

    4%

    l. The only other change to the agree­ment that was rolled out in the sum­mer of 2000 was in para­graph 5.1 which lim­ited Meineke’s oblig­a­tion to pay for ini­tial train­ing to two (2) per­sons who actu­ally have an inter­est in the busi­ness. The orig­i­nal agree­ment did not require those two per­sons to have an own­er­ship inter­est in the business.

Next month we will review some of the impor­tant rights con­tained in the fran­chise agree­ment. In future issues, we will com­ment on cur­rent events, such as the encroach­ment issues. We look for­ward to our future work with the Meineke Deal­ers Asso­ci­a­tion as the Meineke sys­tem con­fronts the chal­lenges of the new millennium.

This article is intended for informational purposes only and is not to be relied upon as legal advice, as individual facts and circumstances may vary.