THE FRANCHISE SYSTEM
A quote from Dick Colliver
In the 1950s and '60s, there was an adversarial relationship between dealers and manufacturers. We had close to 30,000 auto dealerships in the U.S. We were way overdealered, so dealers wanted to protect themselves. They got legislation for motor vehicle departments in the states to put in the motor vehicle code what the responsibilities were for the manufacturer and dealer.
In some cases, (franchise legislation) is overly restrictive. It was designed to protect the dealers, at least in their mind, (and) to prevent manufacturers from adding too many dealers. Motor vehicle codes also have some restrictions on how to sell a vehicle.