IFA Supports Recently Introduced Legislation in Rhode Island to Undo the State Franchise Law

PROVIDENCE, R.I. (Blue MauMau) - Rhode Island State Sen. Daniel Connors recently introduced Senate Bill 2592 in an attempt to undo the "cure period" and "good cause" provisions of the Rhode Island Fair Dealership Act that was enacted in 2007.

The International Franchise Association (IFA) has planned a Rhode Island Franchising Day set for March 19th, to show support of Connors bill. The IFA event will begin at 1:30 pm, at the Greater Providence Chamber of Commerce, with meetings at the state house to follow.

Rhode Island legislators in 2007 tightened the state’s laws governing franchise contracts when they approved the Rhode Island Fair Dealership Act, which extends the amount of notice franchisors must give franchisees before making significant changes in their agreement—including terminations.

Both the state House and Senate approved the bill within a couple of weeks in late May, 2007. The state’s governor refused to sign or veto the measure, which went into effect on June 14, 2007. Legislators in the state announced its passage in August, nearly two months later.

That hasn’t stopped the measure from gaining considerable attention. Rhode Island’s is the first state law of its kind since Iowa passed one in 1992. The law is similar to a 24-year-old Wisconsin law, attorneys say.

The 90-day notice that franchisors must give under the new law is up from 30 days, and it also requires that franchisees be given 60 days to remedy any issues that led to a termination. Legislators argued that the 90 days are needed to give the franchisee more time to sell inventory, identify new products or enter into a new agreement.

Read the attached document that contains the IFA's Talking Points on the RI Fair Dealership Act.