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Keith Miller, chair of the Coalition of Franchisee Associations, a group representing franchisees among some of America's largest chains, was one of two individuals asked to give testimony on the need for Assembly Bill 2305, the Level Playing Field for Small Businesses Act. This is his statement given in front of the Judiciary Committee on Tuesday.The committee approved the bill by a 6 - 3 vote with 1 abstention. It now goes before the Consumer, Business and Professions Committee, where the public is invited to attend the hearing on Tuesday, April 24 at 9:00 a.m. in room 437, the Rotunda side of the Capital Building. (Editor's note)
My name is Keith Miller and I’m a Subway franchisee with locations in Auburn and Grass Valley. I’m also Chairman of the Coalition of Franchisee Associations, which represents 30,000 franchisees, 70,000 locations, with 1.3 million employees. My fellow franchisees are here today to make sure you hear from your local communities, not someone that is paid to give their statement or flew in from DC.
I love franchising, I love my brand, and like my fellow franchisees, we want to strengthen franchising. However, there is an imbalance in franchising today that adversely impacts people’s lives. Remember, it is the franchisee that pays local and state taxes, hires the local workforce, supports the local youth leagues and represents the brand in the community.
The opposition will claim this bill will reduce investment in the state, but they often claim for tax purposes no business nexus in our state. Franchisees are the investment and sweat equity required for success and we are here to tell you we will invest more.
We will hear that government shouldn’t interfere with a business to business contract, yet franchisees are required to sign as individuals, creating personal guarantees and putting our assets at risk.
We want to see problem operators dealt with, as they adversely impact our brands, but we expect due process, which this bill will provide. And we expect our contract to not be constantly changed by our Operations Manual with items which may require significant investment and were not disclosed.
Today we have renewals that bear little resemblance to the initial contract, yet we are given the choice of accepting these renewals or give up our livelihood; a livelihood for which we may still have financial obligations, such as leases or loans.
And I am shocked to see the Chamber in opposition to this bill, who allegedly represent local small businesses. Just to be sure, local small businesses are here today to tell you themselves.
I believe AB 2305 provides needed balance into the industry and places California in a leadership position and I respectfully ask this committee to support their local small businesses.