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Franchise Fairness Legislation Advances in California

By Published On: April 17th, 2013

On Tuesday, April 16, 2013, the California Senate Judiciary Committee approved proposed fair franchising legislation authored by State Senator Hannah-Beth Jackson and sponsored by the AAFD.

Senate Bill SB610 will impose an affirmative and enforceable duty of good faith and fair dealing between franchisors and franchisees. If passed, California law will require that franchisors act fairly and in good faith when enforcing one-sided franchise agreements. When franchisors act unfairly with respect to the sale, renewal, transfer or termination of a franchise, franchisees can sue to recover damages and attorney’s fees caused and/or incurred by the unfair treatment, and treble damages where circumstances warrant.

Equally important, the bill would amend the California Franchise Relationship Law to prohibit franchisors from inhibiting franchisees from joining and participating in franchisee associations.

The AAFD supports this legislation, and AAFD Chairman, Robert Purvin, testified before the Senate Committee on in support of the bill. The entire hearing, including Mr. Purvin’s testimony is being podcast by Bluemaumau.org. The AAFD has offered amendments to further strengthen the bill—seeking to give franchisee associations the ability bring legal actions to protect franchisee rights under the bill.

For more information about SB 610, contact us. We are pleased to accept letters of support and monetary donations targeted to support this legislation and other AAFD legislative initiatives.

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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.