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CA SB-610 – Don’t Let the IFA Lie to Your Legislators

Posted on Date: Aug 1, 2014


Dear California Franchisees,

The fight to pass Senate Bill 610 is on.  The International Franchise Association has come out in full force against this bill, and is spreading false statements and using scare tactics to try to defeat the bill.  Don't let them lie to your legislators!  It's your job to understand the bill, and contact your Assembly member with the truth.

For example, last week the IFA sent the following out to its membership:

"Last Tuesday, the California Assembly Business, Professions and Consumer Protection Committee passed Senate Bill 610, the Small Business Investment & Protection Act, legislation that places the basic tenets of the franchise business model at risk. It contains harmful provisions and would subject franchise small-business owners to unreasonable new regulations. The bill passed the committee as amended by a 10-2 vote and now moves on to the full California Assembly. The Service Employees International Union and other labor groups promulgated this bill. The bill can be voted on as early as tomorrow. In its newly amended, current form, this bad bill has become worse."

Let's look at what they are saying.  They ended with saying the current form of the bill has become worse.  Yet the IFA argued over the past year with the Chairwoman of the committee that the original language of the bill was too broad.  The Chair demanded that the bill be more specific, and those amendments were made.  Then finally, the Chair asked that the renewal section be removed, which it was.  After all the lobbying by the IFA and the changes required by the Chair, the IFA now says the bill is worse.  How can that be true from their position?

The IFA says that the bill will subject franchise small-business owners to unreasonable new regulations, but do they tell you what they are?  As a franchisee, I can't see any new regulations that I will be required to follow in the bill.

And finally, they start with saying this bill places the basic tenets of the franchise business model at risk.  This is a talking point they use over and over with everything they oppose.  Yet, they do nothing to explain what in the bill puts the model at risk.  In fact, similar language already exists in other states like Washington, Hawaii, Iowa and Rhode Island, yet franchising still flourishes there.

By the way, the title, "the Small Business Investment & Protection Act" is a title used by the CFA on bills in many states, including one that was introduced in California last year.  However, this bill does not carry that title, and that shows how much the IFA continues to repeat the same old mistruths to defeat bills that would protect franchisees.  SB610 is NOT sponsored by organized labor as alleged by the IFA, but by franchise owners who are passionate about protecting their rights and business equity. Yes some unions are supporting the bill.  Why?  Because they understand that there is an out of balance situation in the franchise industry where franchisees are struggling to keep acceptable margins, and unless that balance changes and franchisees keep more of the profit pie, the lower wage workers they support will never get higher wages.

Here's what this bill does do for franchisees:

  • It solidifies the rights of franchisees to freedom of association.
  • It expands termination rights in that a default must be a "substantial and material breach of a lawful requirement of the franchise agreement" for a termination to occur, and continues the 30 day cure period on the default in existing law.
  • It expands transfer rights by giving franchisors 60 days after the receipt of required transfer documentation to approve a transfer, or provide written documentation if not approved.
  • If a termination or transfer is not done in accordance with these provisions, the franchisee shall either be reinstated and receive damages, or the franchisor shall pay the franchisee the fair market value of the franchise and franchise assets.
  • And finally, it specifically prohibits a franchise agreement to waive any provision of this law, or to waive the implied covenant of good faith and fair dealing.

In the end, decide for yourself.  DO NOT believe the propaganda that the IFA is selling.  Do you wonder why they never send out a copy of the bill?  It's because they don't think you are smart enough to understand it.  They want to tell you what to believe, and they want to tell you how it will impact you.  I trust that you are more than smart enough to understand the bill, and that is why I am including a link to SB 610. Read it!  I think you will understand why franchisees support it.

There will be an Assembly floor vote on this bill in early August.  It is up to all Californian franchisees to contact their Assembly member. If you are not sure who your Assembly representative is, go to  Type in the address for your home and business(es) to find your Assembly member(s).  Make a call to their Capitol office, and ask them to support SB-610.  If we fail now, we can only blame ourselves for not getting involved and taking action.  Later this week, we will be contacting franchisees in districts that have targeted representatives.  We will be asking you to make an extra effort to meet with your Assembly member and/or have your name on a local newspaper Op-Ed piece.

Please share this post with other franchisees that you feel will help with supporting this bill.  Have them email me with their contact information.  Thank you for your support

Keith R. MillerChairman - Coalition of Franchisee Associations (
Owner - Subway Grass Valley & Auburn, CA
Phone (530) 906-3988

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