Close Your Dealership?

Close Your Dealership? (continued)

Selling an automobile dealership is a very complex and time consuming endeavor and
each of these methods, in order to be effective, must begin with an accurate determination of
value followed by procurement of the right qualified purchaser, preparation of critically important
legal documentation, management and facilitation of the franchise approval process and
coordination of the dealership closing.

Today, in the midst of a worldwide economic downturn,

business as usual isn’t achievable and “normal”

business practices no longer apply. While we all understand that making the decision to exit is extremely difficult,

if your dealership or your franchisor is failing, then the question of if and when you should close needs to be

seriously addressed.

Who Should Close Their Dealership Now?

• You, if you own a dealership in a non-primary market area

• You, if you own a dealership that is improperly aligned

• You, if your floor plan is at risk and you have no alternative finance source

• You, if your dealership could loose more than your current cash-on-hand within the next 6 month period

• You, if you own a domestic dealership and have serious health problems or are suffering from stress and burn

out.

If you fall within this category of dealers, how do you determine if dealership closure is actually an option for you?

Nancy represents franchised automobile dealers by
orchestrating dealership sales and closures for those
wishing to divest, facilitating targeted acquisitions on
behalf of buyers and determining the true market value of
their business. They have been successfully serving auto
dealers for over 25 years, with great professionalism.

Here are four (4) steps that you must take to make a proper assessment of your dealership:

1 Be absolutely positive that you have NO opportunity to sell before considering closure. Selling a dealership today
can take on different forms than you are accustomed to seeing. If you can’t sell outright, you may be able to sell to a
contiguous dealer in order to realign or consolidate your market area or, alternatively, your franchise could be bought by
your franchisor and your point terminated or reassigned. To be sure, consult with a trusted professional who knows
where to go to obtain the answers you need to evaluate your dealership’s situation.

2 If you have determined that closing your dealership is necessary, carefully analyze your situation to make sure you
understand the approximate value of all of your assets and the debt you will remain obligated for. You will need to
involve a team of advisors including your attorney and CPA as well as a trusted automotive expert to facilitate the
process and improve the outcome.

3 When you liquidate, it is important to hit the ground running and divest yourself of assets as quickly as you can to
mitigate further operational losses and to maximize your recovery. Planning is essential. The final closing of your
dealership must be done properly and cleanly, otherwise its effects will come back to haunt you later.

4 The procedure and timing of all of the facets of dealership closure must be professionally orchestrated to address
the many issues unique to the automobile industry. Be sure to engage an experienced auto dealership exit strategist to
avoid costly mistakes and optimize the value of your franchise assets. Services offered should include:

• Franchise Disposition:

Guidance through the process of termination, resignation or reassignment.

• Parts Return:

Facilitation of the return of current parts and liquidation of obsolete inventory.

• Vehicles:

Management of sale of non-returnable new vehicles and used vehicle liquidation.

• Fixed Assets:

Coordination of appraisal and auctioning of furniture, fixtures and equipment.

• Real Estate:

Providing options through a network of national developers and key commercial brokers for

divestiture of real estate.

• Other Franchise Issues:

Guidance in handling other requirements relative to the orderly closure of your

dealership such as extended warranty plans, computer contracts, leases, etc.

Above all, remember that getting out of business requires a great deal of planning and intelligence.

Often dealers are slow to recognize and deal with their immediate circumstances and the future viability of their
franchise. On a personal level, closing one’s dealership is extraordinarily difficult and psychologically traumatic. Ego
and pride can prevent a normally good business person from reaching out for the best support and assistance and
doing the right thing at the right time. To survive, you will need to conduct the closing of your dealership in the same
manner as you would conduct good business - without allowing the stress factor to destroy you.

SUPERIOR DEALER SOLUTIONSsm

Nancy Phillips