Franchise Community Reacts to Proposed Legislation

Exclusive - NFA, AAFD and IFA Sound Off on Kansas and Tennessee Fair Franchise Bills

ATLANTA, Georgia (Blue MauMau) - After a long dry spell on the legislative front, the franchise community is once again scrambling to take action either in support or opposition of newly introduced legislation, which has been posted on Blue Maumau this week. (Kansas House Bill 2321; Tennessee Senate Bill 367 and House Bill 322). But it is interesting that one group seems to be organized in its efforts, one is groping to establish a direction and others are rather blasé over the entire legislative matter. 

One franchisee association that appears to have been on top of the legislative state of affairs from the start is the National Franchisee Association, which represents the operators of the Burger King Corporation. According to Executive Director Frank Capaldo, the NFA spent last week completing a grid based comparison of the old Coble Bill to the Kansas Bill to the Commonwealth of Mass proposed bill.  In an email message directed to Robert Purvin and staff of the American Association of Franchisees and Dealers, which also copied franchisee leaders recently assembled in Atlanta for a think tank conference, Capaldo stated, “To avoid recreating the wheel, we will send you that analysis which you are free to compare your agreement and utilize in communication with your membership.” He said that the NFA had no pride of ownership and urged them to use it as theirown.(See attachment)

But in closing Capaldo said they did have several questions for AAFD: Does AAFD after 15 years have a public opinion on support of fair franchise legislation? If so, what is it?  If not, why not? Does AAFD support the Kansas legislation? And if so, NFA would like to see the statement of support. Does AAFD hope to testify or offer testimony? And last, has any association other than one mentioned taken a public position on support of the Kansas bill?  If so, please provide NFA a copy.

In response to Capaldo’s email, Purvin thanked him for the legislative analysis, and agreed that franchisees should unite and be organized in the common cause in working for better, fairer franchising models. Informed of the Kansas legislation by members of AAFD, Purvin said he had not reviewed the legislation but would do so at his first opportunity.

In answer to Capaldo’s email, Purvin did give a detailed history of AAFD’s political agenda set by its Franchisee Leadership Council, now made up of approximately 50 affiliated associations of AAFD. He outlined AAFD’s actions during the push for federal legislation under Congressman LaFalce, and the Coble-Conyers Bill that followed.  He also reviewed the role of the American Franchisee Association under Susan Kezios in 1993, stating it was well-organized but not well-funded or supported.  Although the Iowa bill was a success, Purvin noted that franchisors effectively boycotted that state, so that its legislation had been largely rescinded.  And, with AFA’s agenda placed on legislation, he said the AAFD chose to set its course to build fair franchising standards through a collaborative process in negotiation with franchisors, and that they had no desire to compete with AFA at that time.

But Purvin expressed that with “the apparent demise of the AFA, the AAFD Franchisee Leadership Council is free to reconsider its approach to legislative change. He stated, “Because of our focus on private Fair Franchising Standards and promoting collectively bargained franchise agreements (that effectively self-regulate on a system by system basis), the AAFD's Legislative Affairs committee has been fairly dormant.  But that is a decision of the FLC, and we can become active in an instant.” 

Others Responses, or Lack Thereof

In response to the newly introduced Kansas legislation, David French, vice president of Government Relations of the International Franchise Association, said, “We oppose the bill. We think the bill would create the same environment for franchising that Iowa experienced in the early 1990s, and we don’t think that would be very constructive,” referring to franchisors boycotting the state. He said that the IFA was watching it very closely, and they had communicated their opposition to the Committee.”  French said IFA had the same response to the Senate and House bills in Tennessee.

But the IFA seemed rather indifferent to the bills when it came to their importance or in soliciting support from its membership. According to French, IFA at this time did not plan to announce or discuss the state legislation activity at the general sessions of the IFA convention in Las Vegas next week, since they had already communicated to their members about the bills.  But he said they will be the focusing on the new proposed federal legislation regarding the Employee Free Choice Act, H.R. 800, which deals with employees’ workplace privacy rights, through the National Labor Relations Act. According to French, “It cuts right to the heart of franchising and franchisee opportunities.” 

So far, to the surprise of many in the community, the American Franchisee Association has been silent on the issue of the proposed state legislation.  But according to Mr. Bluemaumau a response is pending.