A California bill, recently passed in the state Senate, would enhance protections for franchisees if it becomes law. The law would impose a “good faith” requirement for dealings between franchisors and franchisees and would allow franchisees to sue franchisors who don’t negotiate offers to sell, renew, transfer, or terminate a franchise in good faith. The proposed law would also allow franchisees to band together in associations.
The American Association of Franchisees strongly supports the bill, arguing that it is necessary to level the playing field between franchisors and franchisees. The International Franchise Association opposes the bill.
Having passed in the California Senate, the bill is now on its way to the state Assembly for amendments. You can read the bill at here.