Lawmakers in Maine, California, Pennsylvania and Massachusetts have introduced bills that would give owners a lot more leverage
Wall Street Journal 9-30-2013
Elizabeth Garone writes in The Wall Street Journal that lawmakers in Maine, California, Pennsylvania and Massachusetts have introduced bills that would give owners a number of new rights and options—such as allowing them to join and support franchisee associations, and making it easier for them to renew agreements with their franchiser under the current terms.
Most of the bills have been referred to committees and in Maine’s case was held over until next year. What’s more, opponents argue some have only a slim chance of passing.
Garone points out that some observers say the bills have made much more legislative progress than earlier efforts—and they’re pushing for much broader franchisee rights. Part of the reason for the stronger showing is that the bills are backed not just by struggling franchisees with horror stories—as bills in the past often were—but also by successful owners, industry observers say.
“Franchisers have been selling franchises to more sophisticated and wealthy investors, and many franchisees these days own multiple units or even own multiple units across multiple brands,” says Kevin Adler, editor of the Franchising Business & Law Alert. “They are demanding what they see as equitable treatment, and if they don’t get it, sometimes they are turning to legislative solutions.”
Keith Miller, chairman of the Coalition of Franchisee Associations, says profit margins are one of the biggest concerns for this new breed of franchisee. He argues franchisers are increasingly trying to get more revenue out of each store, which means less for owners. These are “franchisees that have worked for years to build their investments and are fearful of those investments being wiped out or reduced in value,” he says.
Read the entire article in The Wall Street Journal