Ex-IFA John Gay Changes Mind, Supports Regulating Franchisors
Apparently the franchisors give the franchisees take-it-or-leave-it contracts and costs imposed by the franchisors have been rising sharply. Gay notes that the franchisees "expressed concern about the unexplained increases...and inability to negotiate a fairer" deal.
The proposed legislation would permit franchisees to "form a broad coalition and negotiate" with franchisors "from a position of strength... if the negotiating parties cannot reach an agreement after a designated time, a three-judge panel would make a decision that best reflects market conditions."
In response, the franchisors respond that "there is no need for government intervention, and that it would be inappropriate for the U.S. government to set prices and negotiate the terms of contracts for private commercial entities."
Note: substitute "MasterCard & Visa" for "franchisors" and "restaurant owners" for "franchisees" and this story is true.
Congressman Conyers is a bit left-wing for my taste but is true to his principles. On the other hand,Mr. Gay must be having a tough time spouting this line with a straight face. Was Mr. Gay worried about "fairness" or did he base his position on "freedom of contract" when he lobbied for the IFA?
Wonder what the IFA's position on this bill is... after all, most IFA members would benefit from this government intrusion proposed by Rep. Conyers.
