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how we sell. Powersports dealers face real exposure, and we need to actively manage that risk— not assume we’ re covered.

SO WHAT CAN YOU DO? First, treat insurance like an operational priority. Start your renewal process no less than 90 days out. But more importantly, communicate any operational changes with your broker. Adding a new brand, hosting a

new event, adjusting staffing— all of it matters from a risk standpoint.

Second, document and audit your internal procedures, especially those involving riding or driving any vehicle— whether it’ s a customer unit, inventory, or something owned by the dealership. Make sure your policies cover how mechanics or staff operate vehicles, how test rides are supervised, and how events are managed. These documents should be active, not just filed away.

Third, work with a broker who understands the operational requirements of doing business as a Powersports dealership.

Someone who has lived in your world— not just read the policy. Someone who knows why your service team rides customer units, why your team is out at events, and how your sales strategy depends on experiences, not just inventory. A broker who gets your operations is a broker who can properly advocate for your risk profile.

I’ ve lived both sides of this. As a former dealer, I know the frustration of feeling misunderstood. As a consultant, I see how much better things go when a dealer is prepared and represented well.

This is a hard market. This latest exit won’ t be the last. But the dealers who treat

insurance as a strategic tool— not just a line item— are still finding ways to stay protected and competitive.

The market isn’ t getting easier. But if you plan ahead, stay disciplined, and have the right partner in your corner, you can keep your doors open— and your momentum going.

Zach Materne is a commercial property and casualty risk consultant specializing in powersports for Apiar Commercial Risk Management / Cell Brokerage Risk Management Group. LA Resident License # 871096 | Cell Brokerage CA LIC. # 0G83985 | NPN # 14775635

For powersports and equipment dealers, the decision to voluntarily terminate a franchise agreement or product line can be deceptively complex. What may initially seem like a HILARY HOLMES RHEAUME straightforward business decision— simply notify the manufacturer and move on— can quickly spiral into a costly misstep if not handled with care. From triggering repurchase obligations to navigating state franchise laws, a poorly executed termination can expose dealers to financial risk and legal vulnerability.

I regularly advise dealers on how to approach voluntary terminations in a way that protects their business interests. The pro-

cess requires more than a courtesy email and a handshake— it demands strategic foresight, contract fluency, and procedural discipline.

THINK BEFORE YOU TERMINATE The first step isn’ t sending a termination notice— it’ s asking the right questions. Before initiating any action, dealers should pause and evaluate five key areas:

• Who needs to be involved? This usually includes leadership, legal counsel, and in some cases, frontline employees who may be affected by operational shifts.

• What is being terminated? Are you winding down an entire franchise relationship or just a specific product line? The answer will dictate the level of documentation and negotiation required.

• Where will the termination take effect? One location? Several? This impacts not only logistics but legal compliance across state lines.

• When should the process begin?“ As soon as practicable” is a more sustainable approach than rushing into“ as soon as possible.” Timing can affect everything from inventory management to buyback eligibility.

• Why are you terminating? Whether the decision is driven by profitability, strategic realignment, or supply chain issues, understanding your rationale will help shape the messaging and protect against blowback.

REVIEW YOUR DEALER AGREEMENT— CLOSELY

Your dealer agreement is your playbook— and no two are exactly the same. Before issuing a notice of termination, confirm that the agreement you’ re operating under is the most current version. Then scrutinize the termination provisions.

Does the agreement require 30 days’ notice? Ninety? Are terminations only

allowed during specific windows? And how must the notice be delivered— via certified mail, overnight carrier, or another method? Failure to follow these details exactly could invalidate the termination or delay important downstream processes, such as repurchase obligations.

Don’ t forget to loop in your manufacturer’ s dealer representative, and always keep copies of every communication for your records.

EXECUTE WITH PRECISION When it’ s time to terminate, precision is non-negotiable. Reference the exact contract clause authorizing your action, specify which products or locations are affected, and document every step.

A clear paper trail is your best defense if questions or disputes arise. The goal is not only to comply with your contractual obli-

See Rheaume, Page 16