Historic Agreement Reached on AB 525 “Franchise Bill of Rights”

Tuesday, July 14, 2015

Sacramento: Assembly Majority Leader Chris Holden and Assembly Speaker Toni Atkins announce a landmark deal between the Assembly Democrats, Coalition of Franchisee Associations, SEIU, and the International Franchise Association to develop a Franchisee Bill of Rights to provide more protection to franchise operators who fear losing their businesses to powerful franchise corporations. This deal marks the first of its kind that the International Franchise Association has agreed to.

“The Franchise Bill of Rights represents a strong departure from the weak protections that allow small business owners to lose out on their life savings for minor violations,” said Assemblymember Holden (D-Pasadena). “This precedent setting measure marks a new future for the backbone of our economy: small businesses.”

“Franchises are a great way for Californians to start small businesses, provide for their families, and employ workers from their communities. With this landmark agreement, we can ensure that these franchisees will be better protected and will allow for greater opportunities for these small businesses to grow,” said Speaker Atkins (D-San Diego).

AB 525 will raise the standard that must be met in order for a franchisor to terminate a franchisee, setup consistent framework that allows franchisees to sell or transfer their businesses, compensate them for capital improvements they are required to make, and require franchisors to pay damages for any breaches of the franchise contract.