A quote from Roger Penske
The system works because it rewards good performance and allows you to become one with the community. The system fosters good competition among dealers and provides the consumer with an array of choices of products and services. The franchise system also promotes brand loyalty and continuity.
Over time, the franchise system has adapted to changes in the market. Back in the 1960s, 30,000 dealers retailed about 10 million vehicles annually. Customer-satisfaction requirements were minimal. Questionable ethics were commonplace, and truth in lending didn't exist.
Today, that has all changed. Fewer franchises sell more vehicles. Dealers operate multifranchised points. Vehicle technology has advanced. Customer demands are higher. The Internet plays a vital role in our business.
Dealers have changed with the times and kept the franchise system strong, while traditional retailers focus more on cannibalization of existing markets, suffer from high employee turnover and do not focus on customer satisfaction.