Franchise Bill Passes Senate Committee on Banking and Financial Institutions

Sacramento, CA – Today, Assemblymember Chris Holden’s bill, AB 676 – Franchises passed the Senate Committee on Banking and Financial Institutions with bipartisan support. Assembly Bill 676 would clarify the intent of AB 525 (Holden 2015), and address issues that have come to light due to the pandemic.

“Enriching the franchisee-franchisor-employee experience helps create opportunities for all Californians,” said Assemblymember Chris Holden. “If we look closely to the issues that have arisen during uncertain times, we can help prevent issues in the future.”

AB 676 helps prohibit franchisors from influencing where a franchisee can purchase a franchise based on a protected class, such as race, which has been the subject of ongoing lawsuits against McDonalds by African American franchisees. This bill would create a more fair process where both parties have a say to determine the amount franchisee’s owe when an agreement is being terminated. It also prevents franchisors from transferring all liability burden onto franchisees in exchange for financial help during a state of emergency.

“As a former franchisee, I spearheaded AB 525 to create the standard-bearer of fairness, and in light of the pandemic, AB 676 helps to rectify the unbalanced relationship between franchisee and franchisors,” said Holden. 

###