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California Fair Franchising Legislation SB 610 Advances. Key Committee Approves Sending the Bill to Full Vote in the CA Assembly

Posted on Date: Jun 25, 2014


DATELINE: June 24, 2014, Sacramento CA.

AAFD sponsored fair franchising legislation, California Senate Bill SB610, has been approved by the CA Assembly Committee on Business, Professions and Consumer Protection and is now advancing to a vote before the full California Assembly. The Bill passed the California Senate last year.

SB610, introduced by Senator Hannah-Beth Jackson (D-Dist 19), will protect the 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 important protections of franchisee rights with regard to franchise sales, transfers and terminations.

Robert Purvin, chair of the American Association of Franchisees and Dealers expressed his pleasure on learning that the legislation is now advancing, "One more step forward to protect franchisee rights in California. The reports of the death of SB-610 have been greatly exaggerated."

Purvin was most pleased that the Bill was approved by a bipartisan vote of 10 in favor and just two opposed (one Democrat and one Republican voted no).

The SB 610 is supported by a coalition of franchise associations and other organizations that back consumer protection legislation. Joining the AAFD is the Coalition of Franchise Associations (CFA), the Asian American Hotel Owners Association (AAHOA), and the SEIU, among others, with significant leadership from John Gordon, of Pacific Management Consulting Group. Hundreds of individual franchisees wrote letters of support for the legislation.

The Bill is being vigorously opposed by the International Franchise Association and other associations that represent big business such as the California Chamber of Commerce.

Those interested in learning more about the bill and listening to an audio recording of yesterday’s hearing can visit Blue Maumau.

The AAFD has issued a statement in support of the bill, which states in part: Modern franchise relationships are most always governed by one-sided ‘take it or leave it’ adhesion contracts that elicit substantial monetary investment from franchise owners, but severely limit a franchisees rights in the franchise relationship. For franchisees, the franchise relationship is almost always a ‘bet the farm’ transaction whereby most franchise owners place their business and financial futures on the line in reliance on the strength of a brand and a franchisor’s promise of substantial support.

SB 610, as amended in 2014, makes a small but important step in recognizing and protecting franchisee rights. Most importantly, the statute would prohibit a franchisor from attempting to waive the duty of good faith implied in all agreements. The Bill also provides important protection of franchisee rights and interests in the event of the sale and/or termination of the franchise. Long term, the Bill protects the best opportunity to create a level playing field in franchise relationships by protecting the right of effective franchisee associations with leverage to negotiate franchise agreements and relationships that respect the legitimate interests of both franchisors and franchisees.

To make your voice heard in support of SB 610: Link to the California State Assembly Web Page and contacts:

For more information on SB 610, visit;jsessionid=ca7b60a6b49e27e0f6c4d3189bf0?bill_id=201320140SB610


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