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Log In / Register | Dec 19, 2014

Franchisees and the Right of Free Association

In eight U.S. states today, franchisees have the right of free association. As a franchisee, these laws allow you to communicate with other franchisees—and form groups—in order to deal with franchisors.

Franchisee association advantages

A major advantage of a franchisee association is strength in numbers. Often, a group of franchisees can make a point with the franchisor that will get lost if made only by an individual. Plus, an association can speak to issues that individual franchisees might fear raising.

The right of free association

States that guarantee the right of free association ensure that franchisors will not take retaliatory action against franchisees for forming an association or participating in its activities. Of course, franchisors rarely take such action. It can backfire easily, especially when franchisees have banded together to advance their interests.

Franchise associations have the right to be listed in the franchisor's franchise disclosure document (FDD). Most associations are independent from the franchisor and should be distinguished from franchise advisory councils, which are usually appointed by the franchisor.

Franchisee association accomplishments

Franchisee associations have accomplished significant changes in systems. For example, KFC's association participates in advertising. Other associations have worked to change burdensome franchisor programs. Last year, our firm sued on behalf of an association to compel the franchisor to take steps to ease the way for our clients to sell the businesses, and we got a favorable result.

Be sure to contact a franchise attorney if you have any questions about your rights of free association or the activities of an existing franchise association.

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