Factory authorization

Definition

A brand's approval to perform its warranty work, which also opens the parts channel.

Why It Matters

Authorization is granted to a company by each manufacturer and it does not follow an asset sale automatically, so a shop whose schedule is full of factory warranty calls can lose the schedule and the parts pricing on the same day. Ask which brands the shop is authorized for, when each was last renewed, what share of revenue each represents, and what the manufacturer's agreement says about a change of control.