Governor Signs Holden’s First-Of-Its-Kind Legislation To Protect Small Businesses Franchisees (AB 525)

Sunday, October 11, 2015

Sacramento – Assembly Majority Leader Chris Holden’s (D-Pasadena) groundbreaking legislation to protect the investment of small business franchisees by strengthening their legal rights has been signed into law by Governor Jerry Brown. Today’s action comes a little more than a year after the Governor vetoed a highly controversial predecessor to this measure, SB 610.

AB 525 protects franchise owners from unreasonable interference by corporations ensuring franchisees can operate their businesses, transfer the franchise to a qualified heir, and renew their contracts. The bill represents a historic compromise between franchise owners, corporate owners, Democratic leaders and labor.

“It is clear that current law was stacked in favor of corporate owners and that small business owners in California needed a more equal legal footing to protect their investments,” said Assemblymember Holden. “I am very pleased the Governor has signed this bill into law as it will bring some much-needed balance between corporations and small business franchisees such as convenience stores and fast-food restaurants – small businesses that are the backbone of our economy.” 

AB 525 is jointly authored with Assembly Speaker Toni Atkins, Assemblymembers Bill Dodd (D-Napa) and Scott Wilk (R-Santa Clarita).

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.