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Two Florida state Republican legislators, Senator Jack Latvala (District 16) and Representative Jason Brodeur (District 28), unveiled a bill today that is aimed at protecting franchise owners. Called the Protect Florida Small Business Act, state Senate Bill 750 aims to protect Florida franchise owners from capricious closings of their franchised businesses without cause or even warning by the franchisor.
"As a legislator, I want to continue to make sure Florida has the most business-friendly climate in America. As a chamber of commerce president, I'm particularly sensitive to the threats against small business owners from out-of-state companies." said Representative Brodeur (R-28). "I want to be sure that there is a level playing field for all business owners in Florida, whether they are a small independent shop or a franchisee."
The International Franchise Association (IFA), a national association that was created by franchisors in 1960 to lobby on their behalf, opposes the bill to protect the assets of franchised businesses. In an email to members, the IFA's senior vice president of communications and public affairs, Matt Haller, asserts: "Despite the bill's misleading title, the legislation appears to be a mirror image of some of the legislation IFA has defeated in recent years in California, Maine and Pennsylvania and would do massive and irreparable harm to franchising in Florida."
That view is not shared by the Coalition of Franchisee Associations (CFA), an organization that represents 41,000 franchisees in some of America's largest franchise brands."The basis of this bill is from California's successful AB-525," asserts Keith Miller, chairman of the CFA.
|California's law similar to Florida bill|
SB-525 that became California law
"require the franchisor, upon a lawful termination or nonrenewal of a franchisee, to purchase from the franchisee at the value of price paid, minus depreciation, all inventory, supplies, equipment, fixtures, and furnishings purchased or paid"
"upon termination, nonrenewal, or expiration of a franchise agreement, a franchisor shall repurchase at fair market value inventory, supplies, goods, fixtures, equipment, and furnishings of the franchise business"
Miller thinks the IFA is using the same rhetoric to oppose this bill that they do for all other franchise protection bills. But Miller points out that this bill is different.
"Much of the language used in the Florida bill is taken from California AB-525, which was signed into law in 2015," points out the CFA's chairman. "That bill was the result of compromise language between the CFA and IFA, which ensured protections for all parties."
Franchisee Miller and the CFA should know. The association, which solely represents franchisees' collective interests, has been deeply involved in the various California and Pennsylvania franchisee protection bills that Haller refers to. But Miller says the Florida bill most closely mirrors the successful California Assembly Bill 525, which the state senate and assembly unanimously passed and California's Governor Jerry Brown then signed into law in 2015.
The IFA seemed comfortable with that bill, which was drafted and supported by the Coalition of Franchisee Associations. The IFA thought the bill would create a good environment for franchisees and franchisors. "AB 525 represented years of work by the IFA and put to rest a major issue in California, marking a more certain path forward for franchisees and franchisors in the state," said IFA Director of State Government Relations and Public Policy Jeff Hanscom in the IFA's February 2016 edition of Franchising World.
The IFA is pushing the thought with its members and legislators that the bill was sparked by a few disgruntled franchisees. "Based upon intelligence IFA's state government relations director Jeff Hanscom has been gathering in Tallahassee, the bill is the result of a small group of franchisees seeking to generate leverage with brands for concessions in ongoing contract negotiations," wrote Haller in an email to IFA members today.
In reality, the Coalition of Franchisee Associations has been behind the scenes helping to not only draft the bill, but also work with Florida franchisees and lawmakers to introduce it.
"We've been working on this bill for at least half a year," said Miller, who is also a franchisee. "It's been in the works for a long time." The CFA chairman asserts that this is a good bill for franchisees and hopes other Florida franchisees will join in to support its passage by registering on a web site, ProtectFLBusiness.com. He and his organization applaud Senator Latvala and Representative Brodeur for sponsoring the Protect Florida Small Business Act. "Increasing the protections for these local businesspeople creates an environment that gives incentive for future investments," said Miller.
"More than 400,000 jobs in Florida are directly tied to the hard work and efforts of franchised small business owners," said Senator Latvala, the bill's senate sponsor. "Currently these small businessmen and women have no real protection if the national corporation drops them as a franchise holder. This is not a level playing field. This is wrong and it must change."