Honda dealers are virtually autonomous. They are not a part of, or answerable to, their OEMs, their brand name partners. They are not simply extensions of the parent companies like a McDonald's, but rather privately-owned businesses in control of virtually every aspect of their business. McDonald's and Chick-fil-A by contrast are actual franchises. Their namesakes impose strict requirements, and each restaurant answers to corporate. In many cases corporate outright owns the business. Their restaurants have to charge what the home office says to charge, cook and serve what they say to, even use only corporate approved vendors--supplies are trucked in on a regular schedule without any control on the part of the store manager. Even the store monthly income statements are overseen by corporate, with a certain percentage of receipts going back to them. Your Honda dealer is nothing at all like this. Though the vehicles on his showroom floor are part of a "flooring" plan in which he owes money on them, and though his parts bill is often balanced against his warranty reimbursements, and though he likely owes money on various parts of his business--he or she pockets every net dollar he receives, it's no one else's. His financials are his concern alone, Honda has no say in it. At the end of the day, a Honda dealer is free to change the color of a new motorcycle or completely customize it or modify it in any way he chooses. He can determine the selling price, offer a different warranty than the factory one, or sell other, competing motorcycle brands alongside. The Honda company has absolutely no say in any of it (though on that last point, Honda has tried in recent years--unsuccessfully--to exert some exclusivity in multiline dealerships). Or at least no input beyond that afforded him by the contract the company made with the dealer. And that very thing--the contract--is the key to understanding the manufacturer/dealer relationship.

I am using the term "dealer' here in a way that excludes indpendent shops. Let's further define a dealer. First, he pays for the right to display the manufacturer's name and logo. Only a dealer can do this. (Some OEMs are militant about this--Harley sues t-shirt shops all the time.) Second, he is allowed to purchase new factory parts and new vehicles in the crate at a dealer-level discount. No one but a dealer can. Third, he has access to product information direct from the manufacturer. No other entity does, and this is a big deal as there are many voices in the powersports marketplace whose technical information contradicts that of the manufacturer. Fourth, he is made the manufacturer's representative in warranty matters--he has a standing promise from the manufacturer to reimburse him for warranty repairs. Fifth, the dealer takes on the responsibility of being the manufacturer's agent in regard to new vehicle preparation. When he uncrates and assembles the new bike, this is legally viewed as the final part of manufacture--an important legal status. Finally and sixth, the dealer agrees to maintain service and repair facilities for the brand. Not all dealers like this last burden; some consider it a "necessary evil". In any case, he has no choice. Outside these six areas, the dealer is pretty much on his own--everything else is in his purview. Honda does not tell its dealers what to do. Far from it.

This is not to say Honda leaves the dealer hanging, with no suggestions, training, advice, programs, systems, data, financial assistance, or any of that. Honda's U.S. office, American Honda Motor Co., in Torrance, California, is not just a seaside loading dock and warehouse. American Honda supports the dealer network very well indeed. It's a massive establishment, with support teams and divisions and departments of all kinds, and a heady place for a motorcycle lifer to experience, should you get the chance (during my three and a half years with corporate Honda I conducted tours of American Honda for visiting clubs like the Gold Wing Road Riders Association). But for the dealer, making use of American Honda is all voluntary, none of it is compulsary. Honda dealers are incredibly empowered. This is both good and bad.

Earlier I mentioned the agreement (contract) that is signed at the beginning of the manufacturer/dealer relationship. When the Japanese "invaded" the U.S. market in the late 1950s, in their drive to get a foothold in a space dominated by the American and Euro brands, the Japanese tried too hard. They sold themselves too cheaply, signing up dealers in ways that ended up empowering the dealer, in retrospect, more than was wise. The upshot of this is that Honda has very little influence on its dealers. Harley-Davidson, Polaris, KTM, BMW and Ducati have the strongest contracts in the industry, agreements that tie product allocations to performance, for example, and which include compulsary dealer training. Honda dealers are subject to none of that. They are not obligated to have trained mechanics, and the law is on their side when it comes to product allocations--they have all the rights. And although Honda and the other Big Four OEMs are working hard to correct this imbalance in their segment of the industry, change is happening slowly. And they don't like to talk about it.

One last thing. The Honda dealership bears the Honda name, but a Honda dealer employee is not employed by Honda. He is not even employed by American Honda, Honda's U.S. representative and supplier of product to the dealer. Nor by the parent company in Japan. His employer is John Smith and Mr. Smith is autonomous from Honda the company. He is of course exposed to Honda’s and American Honda's product, culture, systems, technology and data. But working for a dealer is not even remotely the same as working for a manufacturer. These are completely different worlds. Even if for example as a dealer employee you are eligible for new vehicle purchase discounts, the dealer has the final say. He has to agree or it does not happen. In the end, the dealer you are working for is your boss, not the manufacturer.