Organizations Bump Heads Over Rhode Island Fair Dealership Act

BELLINGHAM, Mass. (Blue MauMau) — The Dunkin’ Donuts Independent Franchise Owners, Inc. announced today that they were involved in lobbying to preserve the Rhode Island Fair Dealership Act. The group of independent franchisees worked against lobbying efforts of franchisor Dunkin’ Donuts and the International Franchise Association to eradicate the law.

Rhode Island is the first state since Iowa did so in 1992 to enact franchise relationship legislation, where franchisees (unit owners) are protected on such issues as business termination by their franchisor. This year’s amendment reduced the original law’s termination and cure notice from franchisors to their franchise owners by 30 days.

DDIFO President Mark Dubinsky observes, “This law attempts to level the playing field, as it were, giving franchisees rights to cure certain defaults, thus avoiding contract termination. We hope other states and even the Federal Government will look at the Rhode Island law and realize that passing similar legislation would serve the best interests of all small business owners.”

The Coalition of Franchisee Associations, an organization comprising various franchisee groups, initially pushed for the entire law to stay intact. On the other end of the negotiating table, the International Franchise Association and Dunkin’ Brands representative urged for total elimination of the Fair Dealership Act that was enacted last year. Both sides were at loggerheads.

A compromise was reached when DDIFO stepped to use their own Rhode Island lobbyists, Paul Tavares and Attorney Carl B. Lisa, to negotiate a middle-of-the-road amendment for the Fair Dealership Act. They also recruited Rhode Island franchise owners to show support. Rhode Island Senator Daniel Connors and Representative Gordon D. Fox sponsored the amendment.

The bill has now become law.

Although the Coalition of Franchisee Associations declined comment, DDIFO Chairman Kevin McCarthy thinks that in the end analysis that the compromise worked for the betterment of all. “In our system of government when all interested parties go away with important gains at the expense of perceived concessions, the people are generally best served," says McCarthy. He continues, "That’s what happened here and I genuinely commend the Rhode Island legislature for properly serving the citizens of Rhode Island with this firm endorsement and validation of progressive franchise legislation." 

Alisa Harrison, Vice President of Communications and Marketing for the International Franchise Association agrees. She states, "The final Rhode Island bill is the result of all sides working together to develop a compromise. IFA is pleased that we were able to help improve the bill so that Rhode Island franchised businesses can operate in the best possible business environment. We will continue our efforts at both the federal and state levels to ensure that the franchising model remains strong and viable for all our members."

Related readings:

• IFA, DLA Piper Reaction to Rhode Island Law
• IFA Successfully Lobbies Rhode Island To Change Franchise Law
• Franchising Laws Move Forward in 2007
• Educating Mayors on Franchising
• IFA Stifles Broadening of New Jersey Franchisee Protection Law
• Rhode Island Senate Bill 2592/CFA
• IFA and CFA Square off in Rhode Island