L. Michael Hankes  |  ATTORNEY AT LAW
tel (781) 817-5215  |  fax (781) 849-1472

The Importance of the Meineke Dealers Association to Your Franchised Business

Sev­eral years ago, I wrote an arti­cle about the impor­tance of the con­tract rights the Meineke Deal­ers Asso­ca­tion has under the Meineke Fran­chise and Trade­mark Agree­ment nego­ti­ated in 1999–2000. Mem­o­ries fade as events in time become more remote and doubt­less not every­one remem­bers that those con­tract nego­ti­a­tions were cham­pi­oned by 110 Meineke Deal­ers who per­son­ally sup­ported and funded that effort in the wake of the class action enti­tled Brous­sard et al. v. Meineke Dis­count Muf­fler Shops, Inc., et al., 155 F.3d 331(4th Cir. 1998).

That con­tract nego­ti­a­tion pro­vided the vehi­cle for the Meineke deal­ers to have a voice in the man­ner in which their fran­chise sys­tem is run. Unlike many other fran­chise sys­tems, the Meineke deal­ers have an inde­pen­dent fran­chisee asso­ci­a­tion, which with the excep­tion of the Exec­u­tive Direc­tor, is made up of unpaid vol­un­teers. The mem­bers of the MDA Board and its var­i­ous com­mit­tees main­tain an active dia­logue with Meineke Car Care Cen­ters, Inc. on every issue impor­tant to the Meineke deal­ers, run­ning the gamut from expen­di­ture of adver­tis­ing monies to for­mu­la­tion of prod­uct lines. Indeed, as my prior arti­cle noted, there are four­teen (14) dif­fer­ent aspects of rep­re­sen­ta­tive dealer par­tic­i­pa­tion in the deci­sion mak­ing process for the Meineke sys­tem that were included in that fran­chise contract.

In the every­day lives of the aver­age shop owner, the MDA may not seem all that impor­tant. On the other hand, as noted, the MDA is con­trac­tu­ally enti­tled to mon­i­tor impor­tant aspects of the fran­chise rela­tion­ship. Con­sider the sub­ject of adver­tis­ing1. If one assumes that an aver­age Meineke shop gen­er­ates $400,000.00 in annual sales, that means that each store con­tributes 8% of that amount or roughly $32,000.00 per year toward the Meineke Adver­tis­ing Fund (MAF). If one con­sid­ers that there are approx­i­mately 900 Meineke shops in the fran­chise sys­tem, the sim­ple math means that each and every year the Meineke deal­ers pay roughly $28,800,000.00 into the MAF.

Under para­graph 8.2 of the Meineke Fran­chise and Trade­mark Agree­ment, those funds must be held by an inde­pen­dent trustee and an audit must be per­formed to account for all receipts and expen­di­tures from the MAF each and every year. The MDA has the con­trac­tual right to mon­i­tor what goes on with the MAF, but those rights only exist because a group of deal­ers banded together and accom­plished what no indi­vid­ual dealer could alone.

The need for a col­lec­tive voice doesn’t dis­si­pate when the nego­ti­a­tion is com­pleted. Fran­chis­ing is an ongo­ing rela­tion­ship that requires con­tin­u­ing effort on both sides of the aisle to make it work. Fran­chisees can­not expect to have a say in the direc­tion the fran­chise sys­tem takes, if they don’t join the MDA, pay atten­tion to the issues and offer their col­lec­tive sup­port to those vol­un­teers who work long and hard to make every dealer’s lot better.

In my career, I’ve spo­ken many times with fran­chisees from other fran­chise sys­tems who won­der how to even begin to form a fran­chisee asso­ci­a­tion or per­suade their fran­chisor to speak with them. You all have a sophis­ti­cated, well run fran­chisee asso­ci­a­tion that works very hard on your behalf. The MDA will only con­tinue to func­tion that way if you join it, fund it, sup­port it and pay atten­tion to cur­rent issues that impact all of your livelihoods.

Please review the President’s mes­sage which out­lines the crit­i­cal work the MDA has under­taken just in the past 12 months and get involved in the MDA today. In my decades of expe­ri­ence as an attor­ney rep­re­sent­ing fran­chisees, your fran­chisee asso­ci­a­tion is a thing of rare beauty that you all should be care­ful to pre­serve and protect.

  1. This arti­cle deals with the Meineke Car Care Cen­ter Fran­chise and Trade­mark Agree­ment and does not review or dis­cuss the Econolube/Meineke Co-brand fran­chise agree­ment.

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.