The move is part of Ford's decision to curtail part of its dealer development program, which is designed to support novice dealers. It comes as the automaker works to shrink its dealer base in the United States, where Ford says it has more stores than it needs to meet the declining demand for its cars and trucks.
But the automaker says this is not part of that consolidation effort.
Ford's dealer development program, which has been part of its efforts to promote minority ownership of its dealerships, helps first-time franchisees by covering a portion of the often substantial costs of opening a store. The idea is that the new dealers can use their profits to pay Ford back over time until they own their dealerships outright.
As a further incentive, Ford often offered these dealers a guarantee that their initial capital investment would be returned if their stores failed.
"We're ending this policy of returning capital to our dealers," said Ford spokesman Jim Cain. "To be fair to everyone in the program, we're offering one last opportunity to take advantage of it before it goes away forever." More at Detroit News