AT one time, showroom/service center combos were a very good thing for consumers. Consumers want to test drive many vehicles before they buy. They want to have a range of options on hand to chose from. After they buy, they want somewhere they can entrust their car to for repairs. In summary, the type of role the dealership fills was and possibly still is an important role in the automotive market.

This is where dealerships came from. Manufacturers, especially when they were smaller, didn't want to deal with establishing such a presence in every town in America, so they left it to private business.

This brings us to the existing franchise laws. I'm told the rationale goes like this; if a manufacturer were to suddenly decide to sell its own vehicles and cut out the middleman, said middleman would be completely and utterly screwed for obvious reasons. The laws, thus, are a form of guarantee for the prospective middleman. He knows his extremely capitol-intensive venture cannot be toppled two years later when the manufacturer decides to sell direct. If such protections were not in place, (so the story goes) entrepreneurs would be hesitant to start a dealership, the absence of which would have been a negative for everybody.