California legislature passes bill making it harder to terminate franchising agreements
The California legislature approved a law Aug. 8 that will make it harder for franchisors to terminate franchising agreements with franchisees, according to MSNBC.com. The bill will now return to the Senate for final approval.
Business organizations like the International Franchise Association (IFA) and the California Chamber of Commerce had urged the legislature not to pass the law, saying it would obstruct franchisors’ ability to maintain a consistent level of quality across all of its franchised locations. But a coalition of franchisees argued the bill would provide their small businesses with much-needed protections against domination by large corporations.
The labor union SEIU also supported the bill, apparently hoping that franchisees would be more willing to increase wages and benefits for their workers if doing so didn’t put them under threat of having their franchising agreements ended. The organization Fight For 15, which represents protesting fast food workers and receives support from SEIU, praised SB 610 in a statement released shortly after the Assembly’s vote.
Topics: Franchising & Growth