Franchise laws started out with good intentions. In the early days of motoring, prospective car dealers gave automakers money to set up operations and start production in exchange for exclusive sales territories. Franchise laws were intended to protect these investors from unfair competition by the automakers. If automakers weren’t prohibited from competing with local sellers, the automakers could just set up their own dealerships and drive the franchise dealers out of business by refusing to sell cars to them on fair terms. This franchise law rationale only makes sense if the automaker sold local franchise dealerships, which Tesla has never done, but some of the laws prohibit automaker-owned dealerships altogether and at least one state (New Jersey I think) modified its franchise law to prohibit Tesla from owning its own dealerships.
Haggling is standard out of tradition and because it is worth it, at least for some consumers, to haggle.
No haggle pricing has taken off a bit with used cars but each used car is unique in its own way. If I see a particular car at Carmax, it is very unlikely that I am going to find the same car in the same color with the same options, mileage and condition at some other nearby dealer. Carmax has a monopoly on that car, and they can set the price without fear that some other dealer will beat them by $25. Tesla, and Saturn before them, had some success with no-haggle pricing but that was only because every dealer selling Tesla or Saturn cars participated. Again, no one could just undercut them on an identical car.
I’m not sure that no-haggle new car dealerships will ever be able to take off as an industrywide practice. As others have noted, if you get a great no-haggle price from a fair dealer, you can use that to get a better price at a competing dealer. I guarantee they will beat it by a few bucks at least.
Even if it did take off, it might not be to customers’ benefit. If everyone goes to no haggle dealerships, the dealerships all have perfect information about every other dealers’ prices. Ideally that will lead to a highly competitive market where every dealer fights tooth and nail to save a buck it can pass on to consumers. Or maybe it leads to dealers using freely available market prices to signal to each other that they can keep pushing consumers’ prices higher and higher.