Today, with the multiple recent legislative and judicial non-franchisor favorable developments relating to franchising, many are saying that the franchise model is headed for trouble. But others disagree. Some recent developments could mark the beginning of a period of change, and one that will clearly not be beneficial for franchisors; it may not be so favorable to some franchisees in the long run, either. Some franchisees may not be happy with the concept that their franchisors may be joint employers or vicariously liable for their franchisees’ sins. On the issue of relationship legislation, and, more specifically, the recent amendments to the California Franchise Relationship Act (CFRA), it will not be likely that any franchisee would be opposed to it.
California Amendment
At the state level, there have been various franchise relationship bills brought before numerous state legislatures in the past two decades. The one thing most of them had in common: They failed to become law. The CFRA is the outlier because the California Legislature recently approved amendments to this act. In the California Senate, the vote on the bill was 24 in favor, nine against. Not exactly a close vote. As of the date of this column, the bill had not been signed into law by Governor Jerry Brown.
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