California Governor Signs Franchise Bill into Legislation

Washington, D.C. (Oct. 12, 2015) — Gov. Jerry Brown of California signed a new franchise protection law, CFA-sponsored AB 525, Sunday afternoon that gives franchise owners in California the strongest rights in the United States.

“We thank Governor Brown for signing AB 525 and taking this step to better protect the rights and investments of the California franchise owners,” said Keith Miller, chairman of the Coalition of Franchisee Associations (CFA). “This journey started almost five years ago, when then Assemblyman Jared Huffman introduced a comprehensive franchise bill. While not everything wished for was achieved, the legislation signed is a significant achievement. It will give franchisees more rights against termination. It will add transparency to the transfer process. It will put meaningful remedies for improper terminations or non renewals. And most importantly, it acknowledges that franchisees own the equipment and fixtures in their business, and that franchisors must purchase them to take possession upon termination or expiration of the franchise agreement.”

Earlier this year, the CFA and the International Franchise Association (IFA) announced they had worked together to find agreement on several amendments to the bill that would help to ensure that franchising remains an important part of the California economy.“The process of bringing the legislation into existence is a hallmark of a sea change in the franchising industry. With the CFA working together with the IFA to balance and strengthen the law’s provisions to protect the rights of both business owners and brand stewards, franchising can be seen as the powerful entrepreneurial vehicle and leading national jobs generator that it has become. Franchisees are finally being recognized and protected as the serious investors that they are,” said CFA Vice Chairman Rob Branca.

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