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SACRAMENTO — California's fair franchising bill now heads to a second committee for approval on Tuesday, April 24. The Business, Professions and Consumer Protections Committee of six Democrats and three Republicans will panel a public hearing on several bills, including Assembly Bill 2305, the Level Playing Field for Small Business Act.
In a rare show of uniform support among franchisee groups that often walk their own way, franchisee associations have shown up to urge lawmakers to move the fair franchising bill forward.
"A.B. 2305 creates common-sense and balanced guidelines that are necessary for the long-term health of the franchising model," says franchisee Hemant Patel and chair of the Asian American Hotel Owners Association (AAHOA), which represents over 10,000 paid members and nearly half the hotel owners in America. He declares that this bill will help franchisees renew and pass down their ownership of their franchises as well as be given a period of at least 30 days to cure infractions of a franchise system's standards before they are terminated rather than just terminate them on whim and quickly.
While franchisees may want it, franchisors strongly oppose the bill to curb abusive franchising practices. The International Franchise Association and its Sacramento lobbyist, law firm DLA Piper, have been meeting with assembly members to ask them to oppose the bill. "Assembly Bill 2305 will hurt consumers," declares the IFA's vice president of marketing and communications Alisa Harrison. She advocates that hurting a franchisor's strong ability to terminate a franchised small business is important for consumers. "Franchisors impose standards and expectations on all franchisees to protect the brand's reputation, other franchise owners nearby, and, ultimately, the general public – their collective customer. This bill will allow sub-standard franchise outlets to continue offering inferior products and services to consumers."
Other groups have joined in to stop the bill, including the California Chamber of Commerce.
Franchisors are likely to ask a favorited franchise owner to come testify that no curbs to franchising abuse are needed.
Small business advocate AAHOA has asked those interested in the bill to join them from 5 p.m. to 9 p.m. for a free dinner Monday night, April 23 to discuss it. After hors d'oeuvres are served, dinner will start at 7:30 p.m. at Pooja Indian Grill, 1223-25 Merkley Avenue, West Sacramento (Phone: 916-375-8906). Those interested in more details can call Mr. Jay Thakor at (707) 693-0606.
Franchisee associations are asking the public to fax their California assembly representative (see assembly list here) to show support of the bill today. California assembly member Jared Huffman (D-San Rafael), who introduced the bill, also asks franchisee advocates to seek mayors and local community leaders to tell assembly members how important the Level Playing Field for Small Businesses Act (AB 2305) is. He says the opposition from franchisors and their association is very strong. "It's going to be one battle after another from here on out," he declared after the bill made it through the Judiciary Committee of the state assembly on Tuesday. The panel approved the bill by a 6 - 3 vote with 1 abstention.
The Business, Professions and Consumer Protections Committee (list of members) will listen to public testimony, consider and then vote on the bill Tuesday, April 24. The session begins at 9:00 a.m. in room 437 on the Rotunda side of the Capital Building, Sacramento. Those interested in the bill can attend the public hearing on a first come first serve basis. The public can also listen online while the hearing is in session.