NLRB Proposes New Rule to Revert Franchisor Liabilities to Franchisees Publication: Blue Mau Mau
Posted on Blog September 21, 2015
On July 23, 2015, Representative Keith Ellison of Minnesota introduced two related bills to improve franchising in the United States: the Small Business Administrative (SBA) Franchise Loan Transparency Act of 2015 (H.R. 3195) and the Fair Franchise Act of 2015 (H.R. 3196). Franchising is the sector of the retail and business industry that has experienced the greatest growth consecutively for the last five years according to the International Franchise Association. The Franchise Loan Transparency Act requires franchisors to make additional financial performance disclosures in federally required franchise disclosure documents and to share financial information provided to the lender to franchisees. The Fair Franchising Act of 2015 establishes a statutory framework for unfair and deceptive trade practices, regulates renewal, transfer and termination of franchise agreements, and creates a federal private cause of action for all statutory violations. If passed, these bills will substantially alter the course of franchise relationships and equalize the playing field, which has to date been tipped in favor of franchisors. The Fair Franchising Act is supported by a variety of franchisee associations, including the Coalition of Franchisee Associations (CFA), Edible Arrangements Independent Franchise Association, Independent Organization of Little Caesar Franchisees, the International Association of Kumon Franchisees, Meineke Dealers Association, North American Association of Subway Franchisees, and Service Station Franchisee Association. Full text versions of each bill are available electronically through the Library of Congress Website at http://thomas.loc.gov.