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Franchisor Attorney Speaks on Franchisee Bills

While recent California and Massachusetts proposed bills initiated by  franchisees have been unsuccessful in getting passage, one franchisor attorney expects to see them resurface for future consideration. And, he reminds, Vermont’s similar bill will be voted on later this year.

Thomas J. Kent, Jr. of Fox Rothschild LLP points in an OpEd for Lexology  Thomas_J_Kent_Jr_.jpgthat all three adopt a central theme of the Universal Franchisee Bill of Rights that “has crystallized debate on several fundamental differences between franchisors, franchisees and their respective industry trade associations.”

Taken as a whole, Kent feels the proposed legislation in Massachusetts and Vermont are not as comprehensive as California’s Level the Playing Field for Small Businesses Act. But he states  there are many similarities.

For example, the bills all contain provisions that would afford franchisees protection from “encroachment” by franchisors. In the Vermont and California bills, franchisees would have a cause of action against a franchisor for placing a new outlet in “unreasonable proximity” of an existing location if the new outlet has an adverse effect on gross sales.

The attorney says another common theme is freedom of association.

That is, the bills provide that franchisees would be free from prohibitions from associating with trade associations and that franchisors could not retaliate against franchisees for such association.

Kent said his law firm will continue to monitor the legislative activity.

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