Franchise Myth Three: Franchisees Own Their Own Franchised Businesses
California Bar Proposes Regulatory Amendments Regarding Negotiated Franchise Agreements.

AAFD Co-Sponsors Proposed California Fair Franchising Legislation.

By Published On: April 12th, 2013

 AAFD’s Robert Purvin to Testify Before the California Senate Judiciary Committee on April 16.

The American Association of Franchisees and Dealers (AAFD) has signed on as a co-sponsor of California Senate Bill SB610, fair franchising legislation pending in the California legislature.  AAFD Chairman, Robert Purvin, has been asked to testify in support of the bill at upcoming Senate Judiciary Committee hearings scheduled for Tuesday, April 16.

SB610, introduced by Senator Hannah-Beth Jackson (D-Dist 19), would create an affirmative duty of good faith and fair dealing in franchise relationships and reinforce the right of franchisees to join and participate in franchisee associations.  The bill also provides franchisees the right to sue if they believe their franchisor has not acted in good faith with regard to franchise sales, renewals, transfers and terminations.

Although the AAFD was not involved with drafting SB 610, the association has supported the legislation and announced its endorsement of the bill in late March.  This week Mr. Purvin was invited to testify on behalf of the proponents of the bill, and the AAFD agreed to sign on as a co-sponsor of the bill with Senator Jackson.

The AAFD has issued the following statement in support of the bill:

“Modern franchise relationships are most always governed by one-sided ‘take it or leave it’ adhesion contracts that require a significant financial investment from franchise owners but severely limit a franchisee’s rights in the franchise relationship.  Creating a statutory affirmative duty of good faith in franchise relationships will inhibit the enforcement of one-sided franchise agreements in an abusive manner.  Long term, the best opportunity to create a level playing field in franchise relationships is too encourage effective franchisee associations with sufficient leverage to negotiate franchise agreements and relationships that respect the legitimate interests of both franchisors and franchisees. The two prongs of Senate Bill 610 and the included remedies for violations will provide significant safeguards against abuse in franchise relationships.”

The AAFD has also suggested amendments to the bill designed to extend the ability of franchisee associations to act on behalf of their members to enforce the protections provided in the legislation.

The bill is opposed by the International Franchise Association and other associations that represent big business (such as the California Chamber of Commerce).  If franchise owners desire to advocate for fair treatment in their franchise relationships it is essential that they show support for this legislation.  California franchisees are especially encouraged to voice their support for SB 610.

Senate Judiciary Committee contacts:  http://sjud.senate.ca.gov/

For more information on SB 610, visit http://www.leginfo.ca.gov/.

To attend the Senate Judiciary Committee Hearings to show your support:  Tuesday, April 16, 2013, 1:30 p.m., State Capitol Room 112.

To learn more about the AAFD, visit www.AAFD.org.

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Written by : Robert L. Purvin

Robert Purvin is the Chairman and CEO of the American Association of Franchisees and Dealers, a national non-profit trade association that is dedicated to supporting and protecting the rights of franchise owners. The AAFD's mission is to define, identify and promote Total Quality Franchising practices, and the AAFD supports is mission by: Promoting strong and effective independent franchisee associations as affiliated chapters of the AAFD. The development of the AAFD's Fair Franchising Standards, the most comprehenisve body of negotiated principles of recommended franchise practices in existence. The advocacy of fair and balanced franchise agreements and relationships that respect the legitimate business interests of both franchisors and franchisees for the good of the franchise relationship. The education of franchisees and prospective franchisees by the development and publication of the AAFD Fair Franchising Standards and the promotion of the AAFD Franchisee Bill of Rights.