August 21, 2104 Sacramento CA. Stop the Presses!!! The AAFD Sponsored California Fair Franchising Legislation (CA SB-610) authored by State Senator Hannah-Beth Jackson (D) has just passed the California Senate by a lopsided vote of 23-9! Having passed the California Assembly on August 14, the bill now goes to Governor Jerry Brown for approval.
SB610 guarantees the right of franchisees to participate in independent franchisee associations and invalidates any attempts by franchisors to waive the duty to act in good faith with respect to its franchise agreements. But most importantly, the bill provides real compensation to a franchisee who is either terminated unfairly, or is frustrated in a reasonable effort to sell a franchised business.
The bill was sponsored by the AAFD, and was heavily supported by a coalition of associations including the Coalition of Franchisee Associations, the Asian American Hotel Owners Association, a myriad of independent franchisee associations and several labor unions and small business advocacy groups who stood with franchisees throughout California.
Although similar legislation has been passed in a few other states, California is the first really big prize, and the International Franchise Association, the trade organization representing franchisors, aggressively opposed the passage of SB610, outspending franchisee interests by a wide margin.
A grateful Robert Purvin, Chair and CEO of the AAFD, appreciated the significance of SB610, “Today we celebrate a monumental success in protecting the rights and equity of franchise owners in this state, a victory that was achieved against long odds and aggressive opposition.” Purvin added, “While it is comforting to know we can make a difference with lawmakers, our long term goal remains to achieve fair and balanced franchise relationships that respect the legitimate needs of both franchisors and franchisees so that we can jointly promote and praise a franchise community that respects the interests of its stakeholders.”