Ford forges dealership network
The owner of that lone dealership was William Hughson, a West Coast transplant who met Henry Ford in 1902 at a bicycle show. At the time, Hughson didn’t even know what a car was, and he had to ask Ford. After Ford explained, he asked Hughson to sell his cars.
The next year, Hughson spent $5,000 and acquired 12 Model A’s for distribution on the West Coast, making him, on a handshake deal, the first Ford dealer.
Hughson was stuck with the inventory for three years. Folks just weren’t ready.
Cars were considered complex machines that needed mechanics to operate them, says Robert Kreipke, Ford historian.
Cars were being sold in the Midwest, but Hughson was struggling on the West Coast.
Then the earth moved. Literally.
San Francisco’s 1906 earthquake left hundreds dead and injured, and the city was in dire need of help.
Hughson donated Ford automobiles to the Red Cross to use for rescue work. The cars were handy because they could travel where horses wouldn’t.
“Horses were afraid, whereas the machinery just chugged along,” Kreipke says. “These newfangled machines could go places that horse and buggies couldn’t.”
After the earthquake, business picked up in San Francisco, and Hughson was called “Mr. Ford dealer” around town. His dealership remained in operation until 1970.
Thanks to Couzens
James Couzens, one of the original Ford shareholders, expanded Ford’s dealer network.
During Ford’s first 15 months of operation, only 1,700 cars were sold, mostly from the Ford factory in Detroit. Detroit didn’t even have a dealership until spring 1904.
Couzens worked hard to find dealers, traveling to meetings held by blacksmiths and buggy makers.
His plan worked.
Couzens recruited dealers, called agents, in nearly every major U.S. city. By fall 1905, he had signed more than 450 Ford agents. The agents were under his supervision.
Michael Kennedy, 2003 Ford dealer council chairman, says Couzens’ early struggle to find Ford dealers is a stark contrast to today’s situation.
“There are plenty of people who want dealerships and not enough to go around,” Kennedy says. “Ford’s not begging anybody.”
In 1904, Ford directors made rules for recruiting dealers and offering discounts.
New agents had to have a 10 percent down payment of the wholesale price for each vehicle they bought. The balance was due upon delivery. This made sense since Ford dealers typically ordered cars only after customers had given them a deposit. Customers were required to pay the balance in cash when their car arrived.
Ford gave agents discounts according to how many vehicles they ordered. In 1904, dealers got a 25 percent discount on all orders of more than 150 cars and a 20 percent discount on orders of 150 cars or less.
Each agent had a sales territory. If an agent sold a Ford in another agent’s territory, he would have to turn the commission over to the dealer whose area he invaded. Dealers who didn’t follow the rules would lose their franchise.
Early Ford franchisees weren’t making much money selling cars, Kreipke says. He compares it to a store owner carrying a new toy although he knows that he may sell only one of them.
It wasn’t long before Ford became particular about how dealerships looked.
The Crandalls, who owned Crandall Ford in Thompson, Ohio, realized the importance of showroom presence.
Bert George Crandall founded Crandall Ford in 1916, selling Ford vehicles out of a barn. In 1920, Ford Motor told Crandall that he must build a dealership. But Crandall didn’t have the money to meet Ford’s building specifications, so Ford took away the Crandall franchise for two years.
In 1922, Crandall built a dealership, which was a one-story building with a showroom and one or two service bays. That structure, says Randy Perrotti, who now owns Crandall Ford, is part of the existing dealership’s body shop.
About 40 years after Crandall built his dealership, Fairlane Ford in Dearborn, Mich., was used as a model for what a Ford dealership should look like.
The dealership was founded by Henry Ford’s cousin, R.W. Ford, in 1923. A major renovation, led by Ford’s Lee Iacocca, was completed in 1968.
The old portion of the dealership is used as a collision and paint shop.
Today, a Ford dealer who builds a dealership can take advantage of Ford’s architectural assistance. But that dealership must follow the guidelines for design and size.