Legal Advice: CarMax Expansion Initiative - Term Paper Example

Its revenues are also high, achieving US Dollars 7.5 billion in 2009. The company is planning a major expansion initiative, which will see it add between 8 and 10 new stores in 2013 to its existing car superstores. This paper will look at the major expansion initiative planned by CarMax in 2013 describing the chosen initiative in detail and determine the administrative law that applies to the initiative and its impact. It also discusses in detail the applicable laws as relates to licenses, E-commerce, and sales laws that will have an effect on the company’s expansion initiatives.

The paper concludes by recommending to CarMax how to lower the threats of lawsuits that may arise from product liabilities and rights to intellectual property in the conclusion. Literature CarMax slowed down its expansion strategies in 2008 as a way to maintain stability by preserving capital in 2008 during the global economic recession. In 2012, CarMax plans to add five stores to its existing stores and between 8 to 10 in 2013, which will result in a 15 percent increase in the total number of CarMax stores (Campbell, 2011).

The growth has been occasioned by increased growth in revenue for the company, for instance car sales rising 7% in the third quarter of 2011 to USD 2.01 billion from USD 1.87 billion in the second quarter. A recovering US economy and increased economic optimism should see CarMax make more revenue because of this expansion initiative. However, the initiative is subject to administrative laws applicable in the State of Virginia and federal laws. Administrative laws are essentially regulatory laws administered by government agencies and enhance or make laws based on general laws and rules made by the legislative authorities, and apply to public agencies and officials.

The state of Virginia has an administrative code that governs most issues dealing with administration of public officials or agencies such as a company. CarMax has an expansion imitative that will see it either build new car superstores or modify/ develop an existing facility to set up a new store. The expected expansion, enlargements or renovations to set up new car superstores are governed under the administrative code 6VAC 15-80-40. The regulatory administrative code or law 6VAC 15-80-40 states that expansions, renovations, or enlargements of any facility must conform to the requirements and standards for new constructions, with exceptions being that upgrading can be done (“Virginia administrative code,” 1994).

Since it is possible the company will construct new superstores within Virginia State, CarMax must conform to the construction and environmental laws applicable within the state. The company must define the intended use of the structure, the number of people it will hold, whether it is expected that people will walk in and out of the structure and whether it meets the minimum heights for the state. These are contained in the Virginia State construction code (“Virginia state construction code,” 2008).

Before construction, CarMax must obtain a state permit to operate a business, defining the location clearly and stating what business the company intends to engage in. the company must obtain an environmental quality permit, which is issued to businesses to protect the air and water resources within the state and to set the safe