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Big Business Can Do Whatever it Wants? Not Always.

Small businessmen who have a franchise from a big company, like a Fortune 500 company, do have some protections against unfair or unreasonable treatment.

For example, there was a Cadillac dealer in Pennsylvania that wanted to relocate its dealership.  Another dealer objected, fearing competition in its area.  The dealer who wanted to move its operation asked permission from General Motors.

General Motors said no – you cannot relocate.  However, Pennsylvania has a law that says a car manufacturer may not unreasonably deny a request by a dealer to move to a new location.  The Cadillac dealer filed a protest with a Pennsylvania state board that is supposed to enforce that law.

The state board decided that General Motors’ excuse for saying no was not reasonable.  The board concluded that General Motors’ reasons were not genuine.  The local businessman prevailed against the big Detroit automaker.

Franchisees in other businesses are also protected by other Pennsylvania laws.  The small businessperson does not have to feel powerless.  A good presentation, often with the aid of expert witnesses who must explain how the franchisor’s decision was based on improper methodology, can protect the local franchisee from some predatory practices.