Why This Matters for Business Owners

Franchisee Stories

Jaspreet Dhillon, 7-Eleven

I’ve spent years building my business, pouring countless hours and nearly everything I have into making it work. But because I own a franchise, my family’s livelihood and my employees’ jobs could be taken away on a whim, and there’s little I could do about it.

I am not alone. There are more than 80,000 franchised enterprises in California, employing nearly a million people. Increasingly franchise owners are seeing our rights slip away as lopsided franchise agreements protect the interests of multi-national franchisors rather than small business owners.

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The Problem

Imbalance of Power

One of the largest sectors of business in California is franchise ownership, but the large, multinational corporations that offer franchises are much more powerful than our local California small business owners whose life work and life savings are at stake.

Some franchise agreements limit franchisees ability to sell their franchise or even pass their business on to their heirs.

UNFAIR AGREEMENTS

Increasingly in this sector, the multinational corporations are creating agreements that severely disadvantage California franchisees and in some cases even open the door for predatory behavior, such as “churning” – the practice of a corporation alleging that a franchisee has broken the agreement, which then enables the out of state corporate office to seize the franchise and resell at a profit.

THIS MATTERS

We care about the relationship between franchisors and franchisees for good reason. All too often, we have found that the franchisee suffers terms and conditions that are too onerous imposed by their direct employer – the large out of state corporation. These small business owners needs protections that will help secure their livelihood.

SB 610's Solution

SB 610 (Jackson) helps ensure more fair relations between franchisors and franchisees.

The purpose of the bill is to allow these small business owners to operate their stores with greater flexibility. and peace of mind.

With greater protections from unfair corporate practices and costs, these small businesses will have the ability to treat their workers right.

More specifically, SB 610 would:

PROTECT FRANCHISEES’ The bill would protect franchisees' ability ability to pass their business on to an heir or to sell it to qualified buyers.
REQUIRE FAIR TERMINATION SB 610 would require that a franchise agreement be based upon substantial and material breach of any lawful requirement of the franchise agreement.
ENSURE FAIR RECOURSE SB 610 stipulates that, in the event that a franchisor terminates a franchisee in violation of the provisions laid above, the franchisee has the following options: to be reinstated as a franchisee with damages caused by the violation paid by the franchisor, or to receive the fair market value of the business and franchise assets.

STAND UP FOR FRANCHISE OWNERS

Add your name on the right, and we'll send this message to Governor Brown:

Dear Governor Brown,

I urge you to sign into law SB 610 (Jackson) – an important bill that will give franchisees fair ground rules. The franchisee is often bound by unfair agreements, suffering terms and conditions that are too onerous. These small business owners need protections that will help secure their livelihood.

SB 610 will allow these small business owners to operate their stores with greater flexibility, and peace of mind – giving them greater protections from unfair corporate practices and costs.

Please sign SB 610.

Sincerely,
[Your name]

Email Governor Brown

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