Partnership Memorandum of Understanding (MOU) for Dealerships

What a good one includes

• A clear definition of the partnership's goals, whether it is for shared vehicle inventory, cross-promotions, or co-branded logistics services.
• Specific guidelines on how inventory is allocated, accessed, and transported between the participating dealerships.
• A detailed breakdown of cost-sharing responsibilities, including transport fees, marketing budgets, and insurance liabilities, along with how revenue or leads are split.
• Designated operational roles for each party, outlining who handles customer inquiries, vehicle maintenance, and transport logistics.
• Clear boundaries on how dealership logos, brand assets, and customer databases can be used during joint marketing efforts.
• A defined timeline for the partnership, including a straightforward exit strategy and notice period if either dealership needs to withdraw.

Common mistakes to avoid

• Failing to specify who bears the liability and transport costs if a shared vehicle is damaged during transit between lots.
• Leaving financial splits or lead attribution vague, which inevitably leads to disputes over who earned the commission on a cross-promoted sale.
• Treating the MOU as a fully binding, permanent contract without clearly stating which specific clauses, like confidentiality, are legally enforceable.
• Neglecting to define an expiration date or an easy exit clause, trapping your dealership in an unproductive partnership.

Frequently asked questions