The auto manufacturers themselves lobbied for these laws ~100 years ago. Cars were very new and they wanted to encourage the construction of single-brand dealerships all over the country. They knew that local businessmen would not invest in dealerships if they could have the rug pulled out from them so they lobbied for much of the legal framework that governs franchisor-franchisee operations today.

> They knew that local businessmen would not invest in dealerships if they could have the rug pulled out from them

If only they realized that sometimes those local businessmen deserve to have the rug pulled out from them.

Regulatory capture.

No business wants to sell to consumers, they are irrational and a huge liability. Much better to have some poor schmuck deal with that and be universally hated.

But why do they need regulations to do that? Can't they just... not sell to consumers?

Historical reasons why it happened are one thing but it’s worth noting that consolidation of corporate power is bad and breaking it up a little is a good thing.

It's a racket protected by law.