Opinion ID: 304258
Heading Depth: 1
Heading Rank: 2

Heading: Major Characteristics of the Dealership Relationship

Text: 6 1. The contract. The Company provides a uniform printed contract which each dealer must sign. The Company agrees to sell papers to the dealer at the wholesale rate, to assist him upon request, and to provide customer lists to the extent they are available and not already furnished. It also covenants [t]hat, notwithstanding anything to the contrary in this Agreement, it will not exercise any direction or control or right thereof over the manner, methods or means Dealer shall employ to perform this Agreement. 7 The dealer agrees to purchase enough papers adequately to service his customers, to post a bond, and to furnish the Company, on demand, with whatever records he keeps. He may not assign his rights under the contract. The dealer shall not be entitled to receive any compensation, allowances or other payment from Printing Company. The Company disavows all liability for any losses, expenses, damages, or injuries incurred in the dealer's business or caused by the dealer's agents or employees. Finally, the contract recites that Dealer is engaged in an independent business and is an independent operator, contractor, merchant and/or distributor and not an employee of Printing Company. 8 2. Price and territory control. The Company sets the wholesale price at which it sells papers to the dealer, who sets his own retail price. The Company suggests a retail price, to which many but not all dealers adhere. While the dealer covenants not to sell papers outside his designated territory, the Company allows dealers to exchange customers or areas along the edges of their territories. 9 3. Delivery. The Company delivers papers to dropoff points designated by the dealer and instructs that daily papers must be delivered to customers by 6:30 a. m., the Sunday paper by 7:30 a. m. Individual dealers insist that the papers be delivered well before this deadline. Other than the delivery deadline and a requirement that papers be protected from the weather, the Company leaves the details of delivery to the dealer, who hires carriers and determines their number, method of pay, hours and duties. 10 The dealer has complete authority to and does refuse to deliver to customers, especially because of defaulted payments, inaccessible homes, or impassable roads. 11 4. Credits and subsidies. The Company ordinarily refuses to accept returned newspapers for credit. If a dealer's draw of papers exceeds his sales, he bears the loss. However, the Company does accept returns when it unilaterally increases or stuffs a dealer's draw. On Sundays, the Company provides a credit for returned papers in excess of eight percent of the dealer's draw when it unilaterally stuffs the draw. 12 During the fifty-three day strike in 1968, the Company allowed dealers to borrow up to $400, with interest at 6% per year on the unpaid balance. After the strike the Company granted subsidies provided dealers maintained their post-strike draw at pre-strike levels. The Company occasionally lowers its wholesale rate and provides a car allowance as an incentive for dealers in less lucrative areas. 13 5. Billing. The Company exercises no control over the method by which a dealer bills customers. Nor does the Company assist a dealer who turns defaulted bills over to a collection agency or to small claims court. The dealer has the sole, accurate list of the Company's customers. 14 6. Competing jobs and papers. The Company allows dealers to take or continue outside jobs and to sell and deliver competing newspapers. 15 7. Supervision. The Company maintains two circulation area supervisors in the Marin area, one of whom sees his dealers once a week for twenty to thirty minutes. Less than five minutes is devoted to business. The other supervisor sees his dealers less often and maintains no fixed schedule of meetings. Neither supervisor polices delivery, and aside from occasional comments about an empty street rack he happens to notice, does not concern himself with daily delivery and service. The supervisors make suggestions about methods of billing or rack placement, but these suggestions need not be taken. 16 8. Dealer's investment and profit. Each dealer rents a shack or garage. Many also maintain home business offices. They purchase newspaper racks, tying machines, recordophones, addressograph machines and plates and daily supplies, such as string, wax paper, and rubber bands from the Company or from other, less expensive sources. There is no requirement that a dealer purchase anything from the Company. 17 A dealer does not buy his dealership, the customer list, or good will. 18 A dealer's gross profit is the difference between the cost of newspapers to him and the price he sells them. Net profit is derived by deducting his costs of operation from his gross profit. 19 9. Complaints. The Company operates an answering service in Marin County to which every dealer must belong and contribute monthly. The service provides three copies of each customer complaint. The first goes to the dealer, who is required to collect his complaints periodically. If a complaint is aggravated, persistent over two days, the area supervisor receives the second copy but makes no immediate effort to adjust the grievance. Instead, he inquires at his next meeting with the dealer if the complaint has been resolved. On the dealer's assurance that something has been done, the matter is closed. The third copy rests in the office files. 20 Customers often mail their complaints directly to the Company in San Francisco. Each complaint is referred to the dealer concerned, and the Company usually informs the customer that his dealer . . . like all our dealers, is an independent contractor and not an employee of the company so our control over his methods of operation is somewhat limited.