On September 29, 2022, California Governor Gavin Newsom vetoed SB-1247 (Hueso, D-Chula Vista). This bill would have required additional disclosures and ongoing reporting on franchisor collected rebates/kickbacks from vendors.  

Taking credit and claiming “victory” for the advocacy in getting the Governor to veto the bill is the International Franchise Association (IFA), which claims to represent franchisees and franchisors.   

The primary purpose of this legislation is that it would have required franchisors to annually to make available to its franchisees a report of all rebates it has received on account of franchisee purchases by the vendor they collected it from.  

AAFD is disappointed with the Governor’s veto and further disappointed that an organization claiming to represent franchisees would work against greater transparency to franchise owners on the rebates collected from their vendors. We believe the Governor was ill advised to veto this legislation, which was approved unanimously by both the California Assembly and Senate. AAFD will continue its efforts for further transparency and look to again sponsor legislation in California and other states to gain this valuable disclosure. 

A copy of the vetoed bill can be found here.