SACRAMENTO – Assembly Majority Leader Chris Holden’s legislation to strengthen franchisees’ legal rights in their dealings with corporate owners has passed both houses of the California Legislature and now goes to Governor Brown for signature. The vote was 71 to 0.
AB 525 is jointly authored with Assembly Speaker Toni Atkins, Assemblymembers Bill Dodd (D-Napa) and Scott Wilk (R-Santa Clarita) and makes it more difficult for major corporations to terminate franchisee agreements.
“This bill represents a historic compromise between the franchisees who own businesses and struggle to stay profitable and the corporations that have promised to support them,” said Assemblymember Holden. “Following a multi-year stalemate, these amendments add clarity that decreases the potential for litigation and increases franchisor accountability.”
“Small businesses are vital to California's economy, and franchises are often a great way for someone to start a small business,” said Assembly Speaker Toni Atkins. “The agreement we reached on AB 525 gives franchisees more protections that allow them to keep their doors open, provide for their families, and employ workers, and it provides the consistency franchisors had said they need. It's a win-win that will help more businesses succeed in California.”
The bill is supported by a coalition of franchise owners as well as the Service Employees International Union (SEIU) who reached a historic compromise earlier this summer with the International Franchise Association which had opposed the bill.
AB 525 now goes to Governor Brown who has 30 days to sign or veto.