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IFA to Franchisee Advocates: Don't Mess with Us!

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WASHINGTON, D.C. – Steve Caldeira, CEO of the Washington, D.C.-based International Franchise Association (IFA) just released this update on the organization's success in being able to have California's Good Faith in Franchising Senate Bill 610 die in committee because of insufficient support among members of the Assembly's Business, Professions and Consumer Protection Committee. The bill was co-sponsored by the American Association of Franchisees and Dealers. It was supported by the Coalition of Franchisee Associations, various independent franchisee associations and franchisees. Over 700 franchisees had petitioned committee members in support of the bill.

Here is an excerpt from IFA president and CEO Steve Caldeira's message to IFA members:

I wanted to send an important update on IFA's efforts to defeat Senate Bill 610 in California.  Late last night, Senate Bill 610 was defeated for the year as the sponsor of the bill pulled the legislation off today's California Assembly Business, Professions & Consumer Protections Committee docket when it became clear there was scant support for the bill by the Committee's 10 Democrats and four Republicans. 

This represents a critically important victory for the IFA and the franchising industry.  This victory is the direct result of an intense two-month integrated lobbying, grassroots communications and public affairs campaign.  Working closely with me, there was tremendous focus, energy and strategic coordination led by Matt Haller, Dean Heyl and Erica (Fitzsimmons) Farage, among other staff members, while simultaneously supported by many IFA members (across a multitude of business segments) and a broad coalition of California-based associations and business-related organizations.  The bill passed the California Senate and the Assembly Judiciary Committee in June, and while the proponents of the bill felt momentum was on their side, we knew from the get-go that the Business & Professions Committee was going to be our best opportunity to defeat the legislation.  As such, IFA's campaign swung into action following the June IFA board meeting in Chicago. 

By deploying grassroots field teams in California that were able to identify and engage hundreds of franchisees and franchisors in Committee members' districts who opposed the bill, it quickly became clear California legislators understood SB 610 was a solution to a problem that did not exist.  If it isn't broke, don't fix it, as they say.  By hearing directly from franchisors and franchisees about the strength of the franchise model, the partnership that exists between both parties, and the strong regulatory environment the industry is already governed by, legislators recognized SB 610 was being promulgated by a vocal minority of franchisees seeking to undermine brand integrity by allowing substandard operators to remain in operation.  This in turn, hurts franchise brands and the equity and investment of both franchisors and franchisees, not only in California, but also throughout entire franchise systems. 

IFA's campaign included a variety of tactics to reach lawmakers, including hundreds of letters delivered to Committee members, in-district meetings during the July recess, op-eds by franchisors and franchisees, and editorials in key publications opposing the bill.  The campaign reached a seminal moment on Aug. 7 as an IFA-led delegation of 20 franchisees and franchisors, including members of IFA's Franchisee Forum led by Saunda Kitchen (Mr. Rooter of Sonoma County) were in Sacramento to lobby against SB 610.  

Representing a broad cross-section of the franchising industry, IFA members demonstrated the negative impact SB 610 would have on the franchise business model for both franchisees and franchisors, diffusing and undermining the message of the bill's proponents that the bill was supported by franchisees and opposed by franchisors.  Lawmakers and staff expressed particular concerns with the ramifications of creating a statutory duty of good faith given the likelihood it would make franchise contracts nearly impossible to enforce and undermine franchisors' ability to improve substandard locations.

While the bill is defeated for 2013, moving forward, IFA has built a strong coalition and grassroots operation to ensure the bill does not move forward in its current form in 2014.  Nevertheless, the defeat of SB 610 for 2013 represents a strong signal to proponents of this type of legislation in California and elsewhere that the industry remains united in opposition to legislation such as SB 610.  Such legislation seeks to undermine the franchising business model by driving a wedge between franchisors and franchisees by propping up the underperforming few at the expense of the large majority of franchisors and franchisees in our industry who work day-in and day-out in partnership to uphold the terms of their contracts.  

We will of course continue to keep all of you posted on other state activity and this California campaign will be an important part of our discussion during next month's board meeting in Washington, D.C. 

In closing, it is important to note and underscore the steadfast support (and resources) the Officers and Board have given me and my team.  Simply put, without it, we would be in a different place today as an association and as an industry, so our sincere gratitude to this hard working and very engaged Board.

Steve Caldeira, CFE
President & CEO
International
Franchise Association  

Editor's note: The IFA has contacted Blue MauMau and asked for an edit. Here is their wanted edit.


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