On July 8, Rep. Peter Daley, D-Fayette, introduced new legislation, HB 1620, aimed at overhauling the legal landscape of franchising and franchise relationships in Pennsylvania. Concerned that Pennsylvania’s current laws do not go far enough to protect franchisees from unfair practices in the sale and operation of their franchised businesses, HB 1620 seeks to improve Pennsylvania’s franchise law by providing a comprehensive regulatory structure focused on the major areas of contention between franchisees and franchisors. In doing so, HB 1620 fundamentally changes a number of key principles that have marked the commercial relationships of Pennsylvania franchises for the past 40 years.
This article reviews certain of the changes proposed by HB 1620, exploring how the system of franchising in Pennsylvania would change under HB 1620. It focuses in particular on the principles of good faith and fair dealing, fiduciary duty and covenants not to compete both as they presently exist under Pennsylvania law and as they are contemplated in HB 1620.
Good Faith and Fair Dealing
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