- Front Page
- Biz Tools
The Franchise Owner's most trusted news source
The Iowa Franchise Investment Act
In 1992, Iowa enacted a comprehensive franchise law that protected the franchise owner and insured that the authority, rights and responsibilities of the business were fairly shared between the two parties. The Iowa law said that:
Many franchisors stopped all franchising in Iowa until the law was repealed. Both McDonalds and Holiday Inns (when Michael Leven was president) sued the State of Iowa challenging the constitutionality of the law, “quarantined” the state and cancelled all new projects in order to prevent the spread of the law to other states. At least 70 other franchisors withdrew completely from Iowa. Leven said, “we cannot risk a law like this being duplicated and have other states follow suit.”
Gradually, under the intense lobbying efforts of the Iowa Coalition for Responsible Franchising (consisting of the largest franchise companies), the Iowa Franchise Investment Act was revised and weakened.