By Laura Perdew
A California Chamber of Commerce-opposed bill opening franchise contracts to litigation will be voted on soon in the Assembly.
The coalition opposing SB 610 (Jackson; D-Santa Barbara) includes franchisors ranging from restaurants to retailers, movers, senior care, maid service, storage units and sports nutrition.
Opponents note that SB 610 will hurt small businesses, undo key elements of existing contracts, promote costly litigation and make it more difficult for a franchisor to terminate an underperforming franchisee. The risk of potential litigation will reduce investment opportunities for franchisees and discourage franchisors from expanding in California.
Reasons to Oppose
• SB 610 Will Hurt Small Business Owners. For franchise small business owners, brand reputation is everything. SB 610’s one-size-fits-all regulation damages the brand, hurts small franchise businesses and could cost California jobs. It will also lower the value of small businesses and put the owner’s hard-earned equity at risk. This bill could put more small businesses at risk of shutting their doors and severely limit further brand expansion in the state.
• California Law Already Governs Franchised Small Business. California law and the Federal Trade Commission (FTC) require the franchisor to provide extensive disclosure documents to franchisees before entering into a franchise agreement to help ensure that …read more
Source: Fullerton Chamber of Commerce