Rhode Island Senate Bill 2592/CFA
In an effort to protect the interests of franchisees from inequitable franchise agreements, the Coalition of Franchisee Associations (CFA) opposes Rhode Island Senate Bill 2592.
CFA is a coalition of franchisee associations focused on strengthening the franchisee community; we represent over 15,000 franchisees employing over 1.5 million individuals. CFA members consist of franchisee organizations providing products and services ranging from food items to automotive repairs. CFA opposes SB 2592 in that it weakens franchisee’s positions relating to contract terminations by diminishing the intent of The Rhode Island Fair Dealership Act (hereinafter “Act”).
The Act became effective in June 2007 and addresses the concern that franchisors have inherently superior economic and bargaining power in franchise negotiations. The law “levels the playing field” in contract negotiations by protecting franchisees from unfair terminations. Specifically, 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.SB 2592 would lessen the notice period and eliminate both the cure period and good cause requirement, leaving franchisees susceptible to questionable terminations with no time to correct assumed discrepancies. CFA believes that small business owners should be given ample notice of a contract termination and the opportunity to remedy any problems before losing their businesses.
- Bad faith in carrying out the terms of the agreement.
CFA respectfully requests that the Rhode Island legislature preserve the intent and integrity of The Rhode Island Fair Dealership Act by opposing SB 2592. On behalf of our members and the millions of individuals they employ, we thank you for your consideration of our concerns.
Coalition of Franchisee Associations
1750 K Street, NW Suite 450
Washington D.C. 20006
(202)416-0270
- Franchise topic:
In this corner you have:
Heavyweight: International Franchise Association (IFA) which sent letters to the bills' sponsors State Senator Daniel Connors and State Representative and House Majority Leader Gerald Fox, as well as to key legislative leaders voicing strong support for the proposals to rescind the Act. The IFA claims on their 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 (CFA) which is a coalition of brand specific franchisee associations focused on strengthening the franchisee community; representing over 15,000 franchisees and employing over 1.5 million individuals.
This is a facinating title match in the making.
A lot is at stake in both corners.
Jim Coen
877-469-3002
Blog: Lets Talk Franchising
Jim Coen is the Executive Director of the New England Franchise Association
Jim Coen
877-469-3002
Blog: Lets Talk Franchising
Executive Director of the New England Franchise Association
President, Dunkin Donuts Independent Franchise Owners (DDIFO, Inc.)
FORGETABOUTIT!--
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
Richard, please expand on your thoughts.
Thanking you in advance for any consideration you give this matter,
FuwaFuwaUsagi
FuwaFuwaUsagi
"Never underestimate the power of stupid people in large numbers."
Except for way back in the 1960s, whenever franchisees get/try to get a state to enact a franchise relationship control statute, the IFA successfully squelches it/gets it repealed.
People who think that Rhode Island has different prospects for franchise relationship control are delusional. Even if they were successful in getting it through, it would only apply in Rhode Island - wherever that is - South Pacific? Is it a territory?
Talk about the flea crawling up the elephant's hind leg with assault on its mind!!
--
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
Richard,
It's the IFA that is trying to pass the legislation, not franchisees.
The Coalition of Franchisee Associations is opposing the new legislation on behalf of their constituents.
a nut case. Thanks Mufflerman. I have a post op appointment next Monday. Maybe after that I won't be on these damn Rush Limbaugh pills. Ah - the price one must pay for a new back!--
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
both suggest.
This seems to be like the Iowa situation when encroachment and other relationship aspects were the subject of a statute enacted by the Iowa legislature (at the behest of Andrew Selden, representing the KFC franchisees).
The statute slipped in under the IFA radar, and the IFA went back in, in their customary Seamus Muldoon sensitivity mode, and threatened Iowa into changing the law back to where franchisors could do what the IFA wants here.
If that is what is happening here, them my remarks may not be off the edge at all. Franchisees don't get relief from the enactment of relationship laws.
I re-adopt my subtle remarks about Rhode Island that were previously posted. --
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
Richard,
Having endured two back surgeries, including an unsuccessful one in January, I literally FEEL your pain. It does appear that Rhode Island is following the "Iowa model" and your skepticism regarding the outcome is duly noted. Regarding both our spines and legislation that helps protect franchisees, I am reminded of a quote from one of my favorite movies, Diner:
"If you don't have good dreams, all you have are nightmares"
Wishing you a speedy recovery....
Chris
I appreciate all the TLC I can get--
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
Richard, what is your sense about why the gas station dealers got relationship protection, in the early 50's? And how has that worked out for them?
Michael Webster PhD LLB
Franchise News
Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"
If you start with the FTC TBA cases, and proceed from there through all the other hard core abuse cases involving how the refiners dealt with the retailers - not only in the tying situations - and you take into account that these were the years when markets were local, not global, and the globality of a market was usually one town/one county/sometimes even one intersection, you can apreciate why that was the heyday of antirust enforcement, government and private.
Since then, internationalism and Chicago School economics have held sway, and the local concerns no longer have value. Small business people lost out to big box retailers, who are now losing out to the Internet.
The world has changed. The 50s were between Korea and Viet Nam. I remember getting a Ford Grant to study the antitrust laws of what was then being called the European Common Market (Rome Treaty of 1956), the implimenting regs for Article 65-66 (the antitrust laws) were just being published in 1961.
Those were heady days. Vertical antitrust restraints were being evaluated under the Schwinn case doctrine - no ownership = no right to restrict the terms of resale - simple common law property rights approach. White Motor had not yet come down (rule of reason approach to non price fixing vertical restraints).
The timing may not have been this exact, but that was how things were moving. The PMPA was the last gasp, right after the Automobile Dealer Franchise Act that came out of the O'Mahoney hearings in 1956.
I feel like a bloody relic.--
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School