I've saw similar in the UK, where there's a 'main' site with the brand name, and brand-location child domains.
Out of 1100 backlinks shown for the main site, hundred's are the child site, which are on the same class C and obviously the same 'entity' creating the site (a couple of dozen per IP). They rank fairly well too, for a lucrative market. To be fair they're a large company, but on the other hand one site would've been just as practical for users.
From the human POV, it can 'seem' less spammy when it's a well known brand or big industry player.