SHERAN, JUSTICE.

The Ford Motor Company appeals from an order of the district court directing the issuance of a temporary injunction pending the determination of an action instituted against it by Dahlberg Brothers, Inc., in which Dahlberg seeks a judgment permanently enjoining the Ford Motor Company from terminating its franchise as a dealer.

The trial court's decision to enjoin temporarily the termination of the dealer's franchise was based upon verified pleadings and affidavits filed by the contending parties. Of necessity, the facts summarized are accepted only tentatively pending determination on the merits.

The Hopkins Motor Car Company was appointed the Ford dealer in Hopkins, Minnesota, in January 1921. In 1929 the name was changed to Dahlberg Brothers, Inc. There were several changes in ownership and organization of the dealership between 1921 and now, but majority ownership has always been in the Dahlberg family. We refer to the corporation as "Dahlberg." In recent years Mr. Earl Dahlberg has been the major owner and the principal executive officer. He owns 88.9 percent of the stock and has been president of the corporation since 1954. Mr. William C. Marsh has owned 11.1 percent of the stock since 1957 and since then has shared with Mr. Dahlberg responsibility for dealership operations.

Dahlberg has operated under a franchise for over 40 years. The agreement was changed from time to time. The one now in effect is dated April 1, 1957. The duration of this agreement, by its terms, is from execution until termination by either party under paragraph 17, which provides for termination by Ford for a number of stated reasons including failure by the dealer to provide satisfactory sales performance. It also provides for termination by either party "at will" upon a stated period of notice.

By letter dated February 11, 1964, Ford sent Dahlberg a notice of termination for cause in accordance with paragraph 17(a)(1) of the agreement. This notice informed the dealer of its right to appeal the determination to Ford's dealer policy board in which event the running of the notice would be suspended. Dahlberg did appeal and its representatives met with Ford's policy board on March 16, 1964. By letter of April 14, 1964, the board informed Dahlberg of its decision to confirm the notice of termination, explaining in some detail its reasons. By the terms of the board's letter, termination was to be effective 90 days from its receipt, that is, July 14, 1964. On July 1, 1964, Dahlberg instituted the present action and obtained an ex parte temporary restraining order. On July 9, 1964, the trial court conducted a hearing on Dahlberg's motion for a temporary injunction. The motion was granted on July 14, 1964. The order to that effect was entered on July 24, 1964.

The Ford sales agreement grants the dealer the right to purchase new automobiles and Ford trucks and to represent itself as an authorized dealer of Ford in the resale of its products to the public. Ford agrees to fill the dealer's orders in return for the dealer's promise to fulfill certain standards of representation. These standards, set forth principally in paragraph 2 of the sales agreement, are intended by Ford, we are told, to accomplish two things: First, to assure as much as possible that the dealer will conduct its business in such a way as to reflect favorably upon Ford and its products. Second, to provide Ford with satisfactory competitive representation for its products.

The name "Dahlberg Ford" is well known throughout the Hopkins business area and the firm has established a good business reputation. Plaintiff, with principal place of business at 1023 Excelsior Avenue West, Hopkins, Minnesota, has invested capital there in the amount of $190,000. It employs 65 persons of various skills.

Plaintiff avers:

"That in 1959, * * * plaintiff's average monthly automobile sales were 89 units, its percent of the Metropolitan Market was 8.55% and its profit before taxes was approximately $35,460.00. * * * plaintiff sold an average of 10 new trucks per month. At this time the defendant, Ford Motor Company, * * * had established the desired quota of sales of plaintiff to be 72 new automobile units per month, being 6.65% of the Metropolitan Market and 8 new trucks per month, being 4.94% of the Metropolitan Market.

"That in 1960, and 1961, the quota * * * was unchanged but plaintiff's sales and profit declined as did those of all Hopkins Car Dealers due to the change in the Minnesota Law as herein set forth. That in 1960 plaintiff sold 72 new automobile units per month which was 8.75% of the Metropolitan Market and 8 new trucks per month which was substantially in excess of its market quota assigned it by defendant, but that in said year in doing so plaintiff sustained a loss in the approximate amount of $45,177.00. That in 1961 plaintiff sold 55 new automobile units per month which was 6.98% of the Metropolitan Market and 7 new trucks per month which was approximately the percent of the Market Quota assigned it by defendant and that in said year in doing so plaintiff was able to make a small profit in the approximate amount of $4,535.00.

"That in 1962 plaintiff sold 54 new automobile units per month which was 6.2% of the Metropolitan Market and 12 new truck sales per month which was 50% more trucks each month than the sales quota assigned to plaintiff prior to October 1, 1962, and that at this time plaintiff earned a profit in the approximate amount of $42,946.00.

"That in 1963, plaintiff sold 63 new automobile units per month for 6.62% of the Metropolitan Market and 14 new trucks per month for 6.41% of the Metropolitan Market and that in doing so plaintiff was able to earn a profit of approximately $35,474.00.

"That in the month of January, 1964, plaintiff sold 46 new automobile and truck units compared to 40 in January, 1963; and that in February, 1964, plaintiff sold 62 new automobile and truck units compared to 45 new automobile and truck units in February, 1963."

According to Dahlberg, a change occurred in its relationship with Ford beginning in the fall of 1962 in these significant respects:

(1) Between September 30, 1962, and April 1, 1963, a period of 6 months, plaintiff's quota of new cars that it was expected to sell was increased over 43% and its quota of new trucks was increased over 44%.

(2) On December 13, 1962, Ford determined that Dahlberg needed to invest an additional $50,000 in its business. In May of 1963, it determined that the needed investment was an additional $115,000.

(3) In 1963 Ford determined that plaintiff should increase the size of its facility to 140,000 square feet. A proposal by Dahlberg in June of 1963 to expand its location to 65,000 square feet, investing $250,000 to $300,000 to do so was vetoed.

(4) Between October 1, 1962, and February 11, 1964, a Ford representative told personnel inquiring about work for plaintiff that they could do better elsewhere causing them to become employed by other Ford agencies in the area. Ford has been seeking to replace Dahlberg at Hopkins with another dealer.

Plaintiff asserts that a number of factors peculiar to Hopkins, Minnesota, account for whatever business difficulties it may have experienced, including:

(1) The adoption of L. 1957, c. 386, preventing advertising for and making automobile sales on Sunday.

(2) The creation of a Ford franchise at Southdale within 5 miles of plaintiff.

(3) Establishment of a used car lot on September 20, 1963, by another authorized Ford dealer "on the same street as plaintiff in close proximity to and in direct competition with plaintiff."

(4) A peculiarity of the Hopkins automobile market in that "all of the cars of certain leasing companies in the area are registered in Hopkins, though actually they are part and parcel of commercial ventures and leasing distributions, and are not straight consumer sales * * *."

Dahlberg contends that the cancellation notice was not effectual to terminate the contract because not based on adequate grounds and because Ford failed to "give the Dealer a reasonable opportunity to cure any failure by the Dealer to fulfill or perform any duty" as required by paragraph 17(c) of the franchise agreement prior to giving notice of termination. Ford's affidavits are to the effect that opportunity was given and rejected.

The decision of the dealer policy board to confirm the notice of termination was based principally upon the fact that the new car sales of Dahlberg had not kept pace with the market "available" to it. It found: Automobile registrations of all makes in the Hopkins, Oak Terrace, and Glen Lake areas in 1963 were 172% of what they had been in 1959. Dahlberg sales in 1963 were only 71% of its sales in 1959. Dahlberg sales as a percentage of all Ford sales in the Twin Cities-Metropolitan area decreased from 8.75% in 1960 to 6.98% in 1961, to 6.01% in 1962, to 6.76% in 1963, to 4.77% for the first three months of 1964.

In the letter from Ford to Dahlberg explaining the reasoning of the dealer policy board, the following appears:

"* * * [T]he principal reason the company elected to send to you a Notice of Termination was that, in its opinion, you had failed, for a considerable period of time, to develop satisfactorily and energetically the market available to you for the sale of new Ford cars in your locality.

* * * * *

"* * * [I]n recent months, your new Ford car sales actually have deteriorated from an already unsatisfactory level.

* * * * *

"* * * [O]ther make competitive dealers in your immediate area during recent years have made substantial changes in their facilities to bring them more in keeping with the ultimate sales potential of that area. In addition, your new car sales in 1959 totalled 1,066 new cars, while in 1963 they totalled only 755 from facilities which were substantially the same in each of the two years, indicating that you can sell more new cars from your present facilities, although, as you point out, your capital and used car facilities may not have enabled you to do so profitably."

1. The limited issue raised by the appeal is whether the order of the trial court constitutes a clear abuse of discretion. If it does, we should reverse because the judicial power must not be used, even temporarily, to compel the continuance of a business relationship which has proved unsatisfactory to one of the parties unless adequate reasons are established by the party seeking relief. AMF Pinspotters, Inc. v. Harkins Bowling, Inc. 260 Minn. 499, 110 N.W.2d 348. At the same time, we must recognize that the facts on which the trial court acts in granting a temporary injunction are, by the nature of the situation, provisional and that the injunctive authority exercised will continue only until a more scientific analysis of the problem is made possible by trial on the merits. Village of Blaine v. Independent School Dist. No. 12, 265 Minn. 9, 121 N.W.2d 183.

We evaluate the situation in light of five considerations which we consider relevant in deciding whether the determination made by the trial court should be sustained on appeal:

(1) The nature and background of the relationship between the parties preexisting the dispute giving rise to the request for relief.

(2) The harm to be suffered by plaintiff if the temporary restraint is denied as compared to that inflicted on defendant if the injunction issues pending trial.

(3) The likelihood that one party or the other will prevail on the merits when the fact situation is viewed in light of established precedents fixing the limits of equitable relief.

(4) The aspects of the fact situation, if any, which permit or require consideration of public policy expressed in the statutes, State and Federal.

(5) The administrative burdens involved in judicial supervision and enforcement of the temporary decree.

STATUS QUO ANTE

It is significant that Dahlberg has been the Ford dealer at Hopkins for over 40 years. So far as the record indicates, the relationship was reasonably satisfactory until the fall of 1962. The sale of Dahlberg of Ford products up until that time had approximated the minimum standards of sales performance which had been specified. In reliance upon the continuance of the relationship, Dahlberg had invested almost $200,000 in the business. It is fair to assume that during this period of 40 years considerable time and effort had been expended by Dahlberg to establish a relationship in the public mind between its operation and the Ford products which it sells. It can be assumed also that its sales organization has been geared to the sale of Ford products and convinced that these products are superior to those of its competitors. The skill of its mechanics would be most useful in the repair and maintenance of Ford products. Its experience in the maintenance of an inventory of parts and supplies needed for the business and held by it for sale to the public would be keyed to the needs of Ford owners in its market area. During these four decades, it must have acquired an understanding of the interrelationship between Ford and its dealers, an important though intangible part of the going business. During this period of time both Ford and Dahlberg must have come to know what each might reasonably expect of the other in order to maintain a harmonious relationship.

RELATIVE HARDSHIPS

Any hardship to Ford resulting from the issuance of the temporary injunction is due to the fact that it is forced to continue a business relationship with a dealer, which, in its judgment, has failed adequately to exploit the market potential in the area where located. If Ford does not have just cause for cancellation of the contract, this is a detriment which must be absorbed — at least until such questions as the adequacy of damages for breach have been fully explored. If it does have just cause for cancellation, the situation is one where a dealer found to be satisfactory for 40 years is given such additional period of life as may be needed to reach a decision on the merits. It is doubtful that the overall success of Ford will be vitally affected during this period of time. Since terminations are rare, the precedent will have a limited impact.

On the other hand, if Ford is not justified in cancelling the contract but is permitted to terminate it anyhow, Dahlberg will be left with an expensive plant designed to meet the needs of a Ford dealer but with no Ford products to sell. Its clerical, sales, and service department personnel will have nothing to do. Dahlberg will either pay unearned wages or lose the trained employees needed to operate a business of this kind. Liaison with the buying public will be interrupted. Those who have become accustomed to buying Ford products from it will be likely to establish a new pattern of buying. Viewed in this light, it seems reasonably clear to us that the balance of hardships weighs heavily in favor of the relief granted by the trial court.

MERITS PROGNOSIS

Plaintiff may have serious obstacles to overcome before establishing its right to what in effect amounts to specific performance of the franchise agreement. The statutory authority for granting a temporary injunction (Minn. St. 585.02) states that a temporary injunction may be granted "[w]hen it appears by the complaint that the plaintiff is entitled to the relief demanded."

In Reichert v. Pure Oil Co. 164 Minn. 252, 204 N.W. 882, it was held that a court of equity will not decree performance of a continuing contract when one of the parties can terminate it at will, but will leave the parties to their remedy at law. That case was decided in 1925. The plaintiff there was a distributor of petroleum products in and near the city of Red Wing. Beginning in 1919, he sold a line of such products under the trade name of "Diamond" gasoline, kerosene, and lubricating oils. Plaintiff had purchased "Energy" gas and "Puritan Motor Oils" from the Pure Oil Company in each of the years of 1921, 1922, and 1923. In November of 1923, the Pure Oil Company refused to sell him any more of these products. Instead it made a contract with a competitor giving him the exclusive rights to sell such products in the city of Red Wing. The action by Reichert was to restrain Pure Oil from selling Energy gasoline or Puritan Motor Oils to others and instead to sell to him. The trial court granted the injunction requested after a hearing on the merits and on appeal the judgment was reversed.

Since it appears that the franchise agreement between Dahlberg and Ford was terminable by Dahlberg at will, the Reichert case is in point unless a longstanding franchise agreement with respect to the sale of automobiles and allied products is to be treated differently than the usual contract for the distribution of goods terminable at the will of the distributor.

A further foreseeable barrier to the granting of a permanent injunction in this case comes from the well-established rule that an injunction or decree of specific performance will not lie, if as a result the court will be required to maintain constant supervision over the actions of the parties. Here, as in Bach v. Friden Calculating Mach. Co. (6 Cir.) 155 F.2d 361, the franchise contract involves individual and reciprocal rights and duties on the part of the manufacturer on the one hand and the distributor on the other. In the Bach case, the Sixth Circuit Federal Court of Appeals said (155 F. [2d] 366):

"* * * These interwoven obligations remain uncertain in the contract and the necessary result of such decree would be the continued policing of the conduct of the parties, both in respect to the operations of the manufacturer and those of the distributors — a task for which courts are not equipped and which is incapable of compulsion by usual judicial process."

Stronge Warner Co. v. V. H. Choate Co. 149 Minn. 30, 182 N.W. 712, is relevant in this connection. There the plaintiff and defendant had entered into a contract whereby plaintiff was to carry on a retail millinery business in defendant's department store. As part of the contract plaintiff agreed to conduct its business with the same degree of refinement and decorum as other departments in defendant's store. Subsequent to the execution of the agreement, plaintiff entered into a similar agreement with a competing department store. Upon learning of that fact, the defendant terminated its contract with plaintiff. Denying an injunction to prevent the termination, we said ( 149 Minn. 35, 182 N.W. 714):

"* * * It may safely be asserted that neither contemplated that in case of a breach of the contract the court would compel them to continue the relation. Such compulsion, after the parties had come to an open rupture, could hardly fail to be extremely embarrassing and financially detrimental to both. The conditions under which business was to be conducted necessitated friendly co-operation to achieve success. We therefore think the court should not compel specific performance, but give damages if any relief at all was warranted."

But these decisions are not sufficiently in point to justify reversal of the temporary order of the trial court.

Although Reichert v. Pure Oil Co. supra, holds that a contract terminable at the will of one party cannot be specifically enforced by him against the other party to it, the business relationship there involved was of relatively short duration; the dependence of the plaintiff upon a continued supply of defendant's products was not made to appear so clearly; and the investment of time and money on the part of plaintiff in a facility peculiarly designed to meet the market requirements of the manufacturer was not so evident as here. The Stronge Warner case is distinguishable because the plaintiff there sought specific performance of a contract contemplating a relationship where the plaintiff would be operating a department forming a part of the same department store owned and operated by defendant. Ford, headquartered in Dearborn, and Dahlberg, situated at Hopkins, are not so intimately joined.

There are sound reasons for treating the relationship between an automobile dealer and manufacturer as different from that ordinarily existing between the parties to a continuing contract for the sale of goods. These reasons were considered sufficient to support the issuance of a temporary injunction in Bateman v. Ford Motor Co. (3 Cir.) 302 F.2d 63, but insufficient to permit the issuance of the permanent injunction after a hearing on the merits. Bateman v. Ford Motor Co. (E. D. Pa.) 214 F. Supp. 222.

LEGISLATIVE EXPRESSIONS

There is no statute, State or Federal, which says that an automobile dealer franchise agreement is specifically enforceable in whole or in part. Nevertheless, in considering whether equitable relief is available in a case of this kind, as distinguished from cases involving contract relationships between manufacturers and distributors generally, we can ascertain whether there have been legislative expressions which manifest a public policy on the subject.

In 1955 (L. 1955, c. 626, § 1) a law was enacted in Minnesota which, as amended, now appears as Minn. St. 168.27, subd. 14, and reads as follows:

"It shall be unlawful for any manufacturer or distributor of motor vehicles, or for any officer, employee, agent or representative of such manufacturer or distributor:

"(1) To induce or coerce or attempt to induce or coerce any retail dealer:

* * * * *

"(c) To enter into any agreement with such manufacturer or distributor or to do any other act by threatening to cancel any franchise or contractual agreement existing between such manufacturer or distributor and said retail dealer.

* * * * *

"(3) To cancel or refuse to renew the franchise of any retail dealer or any contractual arrangement between such manufacturer or distributor and the retail dealer without just cause."

See, Willys Motors v. Northwest Kaiser-Willys (D. Minn.) 142 F. Supp. 469.

The automobile dealers' "Day In Court Act" enacted by Congress on August 8, 1956, provides in part:

"An automobile dealer may bring suit against any automobile manufacturer engaged in commerce, in any district court of the United States in the district in which said manufacturer resides, or is found, or has an agent, without respect to the amount in controversy, and shall recover the damages by him sustained and the cost of suit by reason of the failure of said automobile manufacturer from and after August 8, 1956 to act in good faith in performing or complying with any of the terms or provisions of the franchise, or in terminating, canceling, or not renewing the franchise with said dealer: Provided, That in any such suit the manufacturer shall not be barred from asserting in defense of any such action the failure of the dealer to act in good faith." 15 USCA, § 1222.

In Bateman v. Ford Motor Co. (E. D. Pa.) 202 F. Supp. 595, the Federal District Court held that the dealers' "Day In Court Act" does not provide for injunctive relief and therefore plaintiff's application for a temporary injunction to prevent cancellation of his franchise should be denied. On appeal the Circuit Court of Appeals reversed and remanded the case saying that under the general powers of a court of equity the district court has power to enter a preliminary injunction although the Act made no provision for injunctive relief, and the court could enjoin the manufacturer from canceling the franchise. Bateman v. Ford Motor Co. (3 Cir.) 302 F.2d 63. However, there are Federal decisions which point the other direction. See, Bethlehem Engineering Export Co. v. Christie (2 Cir.) 105 F.2d 933; Bateman v. Ford Motor Co. (E. D. Pa.) 214 F. Supp. 222.

A discussion of these and similar laws will be found in such articles as 41 Minn. L.Rev. 479; Brown and Conwill, Automobile Manufacturer-Dealer Legislation, 57 Col. L.Rev. 219; Kessler, Automobile Dealer Franchises: Vertical Integration by Contract, 66 Yale L.J. 1135.

We must assume for present purposes that legislative placement of the relationship between automobile manufacturers and dealers in a special category constitutes a reasonable classification. The considerations which make this classification a reasonable one for legislative purposes may, if established in this case during the course of a trial on the merits, be a sufficient reason why the decision in the Reichert case should not control disposition of the claims made by plaintiffs. There is no controlling Minnesota precedent dealing specifically with these problems of equitable relief in the automobile manufacturer-dealer situation. We are not now prepared, and do not intend, to intimate what the views of this court will be if a permanent injunction issues and we are called upon to review it.

ADMINISTRATIVE PROBLEMS

We have referred to our misgivings as to the possibility of supervising the enforcement of a decree which, in effect, compels supervision of a complicated and continuing contractual relationship. However, the trial court indicated his willingness that this responsibility be assumed temporarily, at least, stating in his memorandum:

"The Court would not have to supervise the details of the contract; it could be continued under its existing terms until litigation has determined the issue of just cause of cancellation. Lea v. Vasco Products, 81 F.2d 1011 (5th Cir. 1936)."

Presumably, the trial court considered that parties to a franchise arrangement who were able to deal harmoniously for 40 years should be able to do so without court intervention until the merits of this lawsuit have been decided. It may be that this confidence in the objectivity of the litigants is too great. But in view of the long experience that the parties have had with each other without resort to the courts, we accept the judgment of the trial judge in this regard. If Ford, as the party restrained, finds continuance of the relationship unbearable by reason of any misconduct on the part of plaintiff in the performance of its contractual obligations, it can bring the matter to the attention of the trial court by motion to vacate the temporary injunction as presently formulated and by suggesting some form of alternative relief which would meet the requirements of the plaintiff without undue or unnecessary hardship to defendant.

2. It is our conclusion that the determination of the trial court that a temporary injunction should issue was not clearly unreasonable. Therefore, we affirm. See, Berman v. Minneapolis Photo Engraving Co. 144 Minn. 146, 174 N.W. 735; East Lake Drug Co. v. Pharmacists and D.C. Union, 210 Minn. 433, 298 N.W. 722; Hotel Restaurant Employees' Union v. Tzakis, 227 Minn. 32, 33 N.W.2d 859; AMF Pinspotters, Inc. v. Harkins Bowling, Inc. 260 Minn. 499, 110 N.W.2d 348.

Affirmed.