News
The Parliamentary Standing Committee (PSC) headed by Dr. K Keshava Rao has recommended that the Government of India should introduce a Franchise Protection Act for car dealerships.
India does not have a Franchise Law, which is why agreements between OEMs and dealers often favour the former. This leads to short term agreements with no clear exit policy.
There have been instances where vehicle brands have suddenly announced their exit from India leaving dealers in jeopardy. Almost all dealerships are privately owned proprietorship or family owned businesses and find it difficult to stand up against big corporations. Therefore, a Franchise Protection Act is said to be the need of the hour.
A Franchise Act is also expected to benefit customers in the long run. Dealerships will be able to offer necessary services, while also providing stable employment.
Countries like the USA, Mexico, Brazil, Spain, Albania, Russia, China, Indonesia, Malaysia, Japan, Australia, Italy, Sweden, and Belgium already have rules in place to protect franchisees.