The opinion of the court was delivered by: ALESIA
This matter is before the Court on Defendant Ford Motor Company Inc.'s motion to dismiss pursuant to Federal Rule of Civil Procedure 12. For the reasons set forth below, the motion is granted.
Plaintiff, Lynch Ford, Inc. ("Lynch"), is an Illinois corporation with its principal place of business in Illinois. Lynch is a franchise dealership of Defendant Ford Motor Company, Inc. ("Ford"). Lynch sells and services Ford vehicles.
Ford is a Delaware corporation with its principal place of business in Michigan.
As a franchisee, Lynch entered into a "Ford Sales and Service Agreement" ("Agreement"). Lynch has sold and serviced vehicles pursuant to its obligations under the agreement for many years.
Prestige Ford Sales and Services, Inc. ("Prestige"), is a Delaware corporation with its principal place of business in Illinois. Prestige is a subsidiary of Ford -- Ford owns 100% of Prestige's stock. Prestige operates a franchise dealership in direct competition with and just south of Lynch's dealership.
Landmark Ford of Niles, Inc. ("Landmark"), is a Delaware corporation with its principal place of business in Illinois. Ford partially owns Landmark -- it is one of three shareholders in Landmark. Landmark operates a franchise dealership in direct competition with and just north of Lynch's dealership.
In order to maintain its dealership, Lynch must sell a certain amount of vehicles. Pursuant to the Agreement, Lynch's sales performance is measured based on sales within its "dealership locality," which is the area of its sales and service responsibility. Lynch's sales performance is also measured based on a comparison with other authorized Ford dealers within its "sales zone and district." Ford determined Lynch's "dealership locality" and its "sales zone and district."
Once Ford determines the dealership locality, it is assigned to each dealership as a "primary market area" ("PMA"). Based on the PMA, Ford sets a quota as to the amount of vehicles each dealership should sell. Lynch's PMA includes areas within the suburbs and within the Chicago City limits. The PMA for Landmark is directly north of Lynch's PMA and the PMA for Prestige is directly south of Lynch's PMA. Thus, essentially, Lynch is surrounded by Ford owned dealerships. Lynch alleges that its PMA includes areas that are closer in proximity to other dealers. Accordingly, Lynch's sales quotas are too high while neighboring dealerships are too low.
As noted, Ford also compares Lynch's sales performance to other dealers within its "sales zone and district." The "sales zone and district" is known as the "multiple point" ("MP"). Lynch is in the North Chicago MP. There are only three Ford dealers, including Lynch, in the North Chicago MP which are located within the Chicago City limits. The other two dealers -- North Side Ford and Weinman Ford -- are located near the lakefront. The lakefront area is one of the few areas within city limits that is experiencing an increase in households. Lynch's PMA, on the other hand, includes areas within the city limits which are experiencing a decline in household income.
According to Ford, Lynch's sales performance does not compare favorably to other dealers in the Chicago North MP -- particularly the suburban dealers. Accordingly, Ford issued Lynch a notice of termination due to unsatisfactory sales performance.