Market and Franchise Law Analysis: Michigan Honda Dealerships

Case Study:
Market and Franchise Law Analysis
Michigan Honda Dealerships


The attorneys representing three franchised dealers of American Honda in Michigan retained Anderson Economic Group after American Honda appointed a new dealer within the primary market areas of their clients. Anderson Economic Group was tasked with evaluating the effects of the new dealer on the existing dealer’s sales, service, and other revenues, as well as the impact on profitability and market value.

We completed an expert report that began with an evaluation of the fundamental ratio­nale of the franchise relationship, and the responsibilities of both parties. The report continued with a detailed analysis of sales data, the pattern of sales as distance from the retail outlet increases, the geographic and demographic characteristics of the changed market areas, and the likely effect of the new dealer on the sales of the existing dealer. We then completed a valuation and damages estimate that translated the lost sales into tangible figures for the court. Patrick Anderson and Victor Wrotslavsky were deposed on the contents of the report.

Expert Report, Validity of Survey Research: Cities of Centerline, Eastpointe, Roseville, St. Clair Shores, and Warren


The Cities of Centerline, Eastpointe, Roseville, St. Clair Shores, and Warren, Michigan are located just north of Detroit, and are among the largest cities in the metro Detroit region. The attorneys for the Cities retained Anderson Economic Group after an insurance company filed suit against the Cities.

A statistical survey was introduced into evidence by the plaintiff to demonstrate the behavior of the residents of the communities in years previous to the filing of the lawsuit. Anderson Economic Group provided expert analysis, a report, and testimony in deposition on the defects in the methodology used for the survey. The analysis included extensive review of the proper statistical methodology used in survey research, identification of sources and forms of bias, and a monte-carlo demonstration model showing how the proper methodology differed from that followed by the creator of the submitted survey.

In one of the largest judgments of its kind, the Cities were awarded $207 million in damages and compound interest in January of 2002.

 

 

 

Valuations and Damages for Franchised Businesses: AEG Working Paper 2003-12 (Corrected 1/2004)

Anderson

Valuations and damages for franchised businesses, disputes between franchisees and franchisors.