Crain Volkswagen sues VW over new Everett store 20 miles away

Fayetteville Crane Volkswagen Arkansas It filed a lawsuit against Volkswagen Group of America, claiming that a nearby VW dealer’s license violated its franchise agreement and encroached on Crane VW’s retail territories.

The lawsuit was filed in December in the Circuit Court of Pulaski, Arkansas, naming VW of America as a defendant. Crain VW claims that under its franchise agreement with VW of America and state law, it is entitled to serve only Washington and Benton counties in northwest Arkansas.

Everett Volkswagen’s licensing in Rogers, Arkansas, 20 miles away, encroached on its territory and violated the “good faith” agreement established by the franchise agreement to “act in a fair and equitable manner with each other.” Alleges that there is.

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The lawsuit also alleges Volkswagen of America’s inability to achieve the “industry standard of 600,000 vehicles per year to support its existing dealer network” and, as a result, its inability to adequately support and supply both dealers. I argue that it is likely. The claim violates state franchise laws.

Crain VW is suing VW of America for breach of contract, state dealer protection laws and common law obligations.

VW of America “violated its contractual, common law and statutory obligations of good faith and fair dealing with dealers,” the lawsuit states. The automaker “doesn’t have enough market penetration in the US to support additional dealers.”

In its complaint, Crain VW outlines that the company and its affiliates invested in the current facility, which was moved from Springdale, Arkansas in 2017. The investment was “made in view of the forecast of future economic and market conditions,” the lawsuit claims. and Dealer’s Retail Territory” — a phrase taken directly from his Crain VW dealer contract with VW of America.

Crain VW seeks $5 million in damages for each count and asks the court to block VW of America from distributing inventory to Everett VW.

VW of America has responded to the lawsuit with a motion to dismiss the complaint. In a memo supporting the motion, a VW of America representative records that Everett VW was founded in his May 2021 and has legally obtained a license agreement with the Arkansas Motor Vehicle Commission. . The memo claims that this was done despite objections to the commission from Crain VW.

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