IFA and CFA Square off in Rhode Island

Submitted by Jim Coen on Fri, 2008/05/02 - 02:43.

An organization that largely represents franchisors is trying to revoke Rhode Island's fair franchise law as a coalition of franchise owners fights to preserve the law. In one corner is heavyweight International Franchise Association (IFA). It sent letters to the law's sponsors - State Senator Daniel Connors, State Representative and House Majority Leader Gerald Fox and key legislative leaders, voicing strong support a proposal to rescind the Rhode Island Fair Dealership Act that was passed in 2007.

ifapage The IFA claims on its website to be the only association serving as the voice for franchising in the United States. IFA's membership encompasses some 1,300 franchisors, 500 suppliers and over 10,000 franchisee members.

In the other corner you have the challenger, Coalition of Franchisee Associations. The CFA is a coalition of brand specific franchisee associations focused on strengthening the franchisee community and representing over 15,000 franchisees. Its franchise owning members employ over 1.5 million individuals.

This is a fascinating title match in the making. A lot is at stake in both corners.

by Jim Coen, 877-469-3002, Blog: Lets Talk Franchising, Jim Coen is the Executive Director of the New England Franchise Association

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RI Congressmen Launch 'Sensible' Act to Replace Fair Law

Submitted by Bob Frankman on Sat, 2008/05/10 - 11:20.

Matt Shay, president of the International Franchise Association,  a lobbying group for franchisors, has written the state congressmen to repeal the original fair franchise law.

In response to the overly-broad Fair Dealership Act of 2007, Rhode Island State Sen. Daniel Connors (D) and House Majority Leader Gordon Fox (D) filed SB 2592 and HB 8150, respectively, to undo burdensome provisions of the current law.  - IFA Insider

The new Sensible Franchise Act would replace the existing but Fair Franchise law. Shay says the sensible bill prevents the enforcement of franchise system standards and not specifying what "good cause" means.

Sensible/Reprehensible

Submitted by Mufflerman on Sat, 2008/05/10 - 12:28.

The Rhode Island Fair Dealership Act--the law incorporates the following provisions:  

  • “Notice Period” provision - requires the franchisor to give the franchisee at least 90 days written notice prior to termination of their contract. 
  • “Cure Period” provision - provides the franchisee 60 days to remedy any claimed deficiencies from the termination notice.  
  • “Good Cause” provision – specifically defines “good cause” for franchisor’s termination of franchise agreement as:

- Failure to comply with reasonable requirements of the franchise agreement.
- Bad faith in carrying out the terms of the agreement.

So the existing act DOES define “good cause” which is precisely why the IFA is trying to have it replaced, ironically by something they have chosen to call the “Sensible Act”.  Clearly, the IFA will lobby hard against anything that grants franchisees the right to avoid swift termination.  What about the current provisions is so "burdensome" to the IFA?

Sensible?  How about Reprehensible?

CFA Response?

Submitted by Guest on Fri, 2008/05/02 - 08:38.

Does the CFA have a web site?

Has the CFA issued any communication refuting the claims of the IFA or promoted their view of this Act?

CFA response

Submitted by Mufflerman on Fri, 2008/05/02 - 09:12.

The CFA's position is detailed on this site under "legal"

http://www.bluemaumau.org/rhode_island_senate_bill_2592cfa

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