The most important thing to remember is that these franchises are costing Chrysler virtually nothing. The franchises buy the cars from Chrysler at the time they are put on the lot. These franchise dealers are Chryslers customers for Pete's sake GM for years never billed the dealer until the car was sold to the end user.
Since when is the elimination of retail outlets as well as the halving of advertising a winning combination in business. Now Chrysler has less of a presence in the market and less advertising. This makes it that much easier for a customer to go to a Ford, Toyota, or Honda dealer that is closer to his home.
Cutting advertising isn't always done, but eliminating retail outlets is pretty much a go-to move for struggling companies.
There is a minimum stock required for a dealership.
There are a certain number of cars that will go unsold at the end of every model year and eventually be molded into the used car inventory.
Fewer dealerships does not necessarily mean fewer new car sales.
What it most certainly means is fewer overstock conversions at the end of each year.
But maybe I’m just clueless and Chrysler is going about this all wrong (and maybe Toyota and Honda have no clue either - they maintain far fewer dealerships than the big three while selling just as many cars each year).
Maybe what they need are MORE dealerships - one on every corner! And we can use stimulus projects to build them!
Short version - assertions that dealership franchises have no cost to the factory are simply untrue.