California Legislature unanimously passes franchisee rights bill

The California State Legislature has sent the California Small Business Investment Protection Act to Gov. Jerry Brown, and franchisees are urging the governor to sign it. The Assembly passed the measure 79-0 on Aug. 31 after the State Senate passed the bill 34-0 on August 28.

Noting bipartisan backing for the measure, Senator Hannah-Beth Jackson, D-Santa Barbara, said before the Senate vote that the bill will “help bring balance to the franchisee-franchisor relationship,” adding that it “provides needed protections against unwarranted actions by a franchisor.” Specifically, the bill, AB 525, strengthens protections against termination of franchisees; enhances franchisees’ ability to sell their businesses; and requires franchisor payments to franchisees if they do terminate or refuse to renew franchise agreements.

Overwhelming support for the bill prompted the franchisor lobby, the International Franchise Association, to stop its campaign against AB 525. The Coalition of Franchisee Associations and the IFA issued a joint letter stating that “the bill will further strengthen franchising as an engine for economic opportunity in California.”

Franchisees are signing onto a letter to Gov. Brown urging him to sign the Act. Brown vetoed a franchisee rights bill last year.

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Staff