Minimum Franchise Standards
When a Manufacturer audits their Retailer network they hope via their chosen Independent
Auditors to obtain an accurate account of how their Retailers comply with the Manufacturer's defined
Network Minimum Standards.
Sadly, there are Auditors being used today by Manufacturers who don't have Motor Trade experience
and without an in-depth understanding of how a Retailer works, this can lead to errors.
On occasions, some Manufacturers have asked me to conduct a number of Pre-Audits to determine the
accuracy of the official audit. After the Pre-Audit, each participating Retailer was instructed not
to correct any of the shortfalls thus enabling a comparison to be made between the two audits.
Let me give you a few examples:
Standard - Display current model Literature, POS and Posters
On the Pre-Audit, there were two model posters that were not current - the Official Audit did not notice
Standard - Working and
calibrated 4-Wheel Alignment
On the Pre-Audit, the Retailer only had 2-wheel alignment equipment - the Official Audit did not notice
Standard - Parts must be
stored by a clearly defined location
On the Pre-Audit, the Retailer had no parts bin locations - the Official Audit did
not notice this
At the same Retailer, within the Parts Department there were a number of non-genuine service parts.
Upon asking the Retailer what these parts where used for, they reported that the non-genuine parts were only ever
used on pre-owned vehicles as prepared by the Sales Department to reduce cost.
Whilst I admire the Retailer's initiative of reducing used car conditioning costs, unfortunately their used car
sales literature clearly identified that all their used cars had been conditioned or prepared using OEM - Genuine
More worrying is that some of the used vehicle stock was still in warranty and had been serviced using non-genuine
This opened-up a Trade Description Misrepresentation issue and in fairness to the Dealer Principal, given
the implications, he gave this his immediate attention.
There are many excellent Auditors undertaking Minimum Franchise Standard Audits, but
where Auditors have little or no motor trade experience, the accuracy and consistency of the official audit
may be brought into question.
Are Retailers are being audited accurately and
Author: David Inglis
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