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closed factories, and many sellers of manufactured homes went out
of business.
To adjust to the changing market conditions and to reduce
costs, in approximately 1999 ADI adopted a revised business plan
and restructured its sales operation. Under ADI’s revised
business plan, ADI’s salespersons are given a more active role in
the sales activities and act as independent contractors vis-a-vis
ADI.2
Under the agreements ADI enters into with the independent
salespersons, ADI purchases from manufacturers a number of model
manufactured homes and places the model manufactured homes on
retail sales lots that ADI leases for the purpose of displaying
the manufactured homes to the public and to potential retail
customers.
The retail sales lots that ADI leases generally are located
in prominent, high traffic areas -- either the same sales lots
ADI had leased and used in prior years or new sales lots. These
lots are not leased by ADI as storage lots, but rather the lots
are leased by ADI as sales lots for the sale of manufactured
homes.
2 The independent salespersons who contract with ADI
generally incorporate their individual sales activities. For
purposes of our opinion, however, we refer only to the
independent salespersons, not to their corporations.
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Last modified: May 25, 2011