As we reported earlier this month, proposed legislation has been introduced in the California State Assembly that would dramatically change the landscape of franchising in California and perhaps set a strong precedent elsewhere. The legislation addresses issues that have been long festering with franchisees and franchisee advocates. If passed, the new law would provide significant protections for franchisees in a franchise relationship.
Assembly Bill 2305, called “The Level Playing Field for Small Business Act of 2012“ was introduced in the California State Assembly by Assemblyman Jared Huffman (D-Marin California) last week. The Bill is co-authored by Assemblyman Tom Ammiano (D-San Francisco).
The proposed legislation seeks to amend several provisions of the California Franchise Investment Act and the California Franchise Relations Act. Some of the salient provisions of the proposed law:
- Would impose of duty of good faith on the parties to a franchise agreement.
- Would impose a duty of competence on franchisors
- Would increase protections against territorial encroachment
- Provides greater protection against unfair terminations and provides improved rights of renewal
- Would add protections for franchisee associations
- Solidifies the right of California franchisees to resolve disputes locally
- Increases the statute of limitations to four years for most violations
The AAFD supports the goals of this legislation and encourages our members, especially California citizens, to let your local legislators know that this bill is of vital importance to the success of franchised small businesses in California.
The Bill has been referred to the State Assembly Judiciary Committee and the Business, Professions and Consumer Protection Committee for review. The Judiciary Committee will be the lead committee and has set a hearing on the Bill for April 17, 2012.
We are seeking franchise owners near Sacramento to attend the hearings to show support for the legislation. All AAFD franchisee members in California are urged to fax short letters supporting the legislation to your local state representatives and send a copy to the AAFD (email@example.com).
Click here for the list of the Members of the Judiciary Committee and the BPC Committee and their fax numbers.
Contact the AAFD for more information and for help in preparing your letters of support.