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California Bill Would Grant Increased Contract Rights to Franchise Owners

  

A California bill would grant small operators of fast food and other franchises increased contract rights.

Franchise operators in California would be granted increased contract rights under a bill making its way through the state legislature.

Kathryn Slater-Carter is a Bay Area McDonald’s franchise owner. She says the bill would give franchisees the right to sell their businesses to qualified buyers without corporate interference and it would help prevent cancellations for minor breaches of contract.

“To protect the franchisee from capricious and abusive terminations by the franchisor without a just and good cause,” says Slater-Carter.

Critics of the legislation say current law should not be changed because well run franchises can suffer when poorly run franchises are allowed to continue.

“It allows underperforming franchisees to operate in a manner where the franchisor cannot police the standard,” says Dean Heyl with the International Franchise Association.

The Senate has passed the bill. The full Assembly is expected to take it up soon.