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In the News

BY ALM Staff
August 02, 2014

California Franchising Good-Faith Legislation Moves Forward

A bill has advanced in the California Assembly that, if ultimately passed, will enhance franchisee rights in that state. SB 610, which was introduced by Senator Hannah-Beth Jackson (D-Dist 19), was approved by the Senate last year. It aims to enhance the right of franchisees to participate in associations, to regulate the sale and transfer of franchises and to enforce the duties of good faith and fair dealing in franchising agreements.

When the Bill last year failed to gain the support it now appears to have, the International Franchise Association (IFA) issued a statement about SB 610's defeat, which stated, in part: “Lawmakers in California recognized the basic tenet of the franchise model is the contract, and both franchisees and franchisors need to work to adhere to the terms of the contract for the model to thrive. Franchising remains the most viable way to own and operate a small business for many Americans, and legislators didn't want to upset the apple cart to appease a few isolated grievances when there are processes already in place within those systems, and the courts, to address them.” See, “California Legislature Rejects Attempt to Undermine Franchise Contracts.”'

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