BILL NUMBER: SB 610	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Jackson

                        FEBRUARY 22, 2013

   An act to add Article 2.5 (commencing with Section 20016) to
Chapter 5.5 of Division 8 of the Business and Professions Code,
relating to franchises.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 610, as introduced, Jackson. Franchises.
   The California Franchise Relations Act sets forth certain
requirements related to the termination, nonrenewal, and transfer of
franchises between a franchisor, subfranchisor, and franchisee, as
those terms are defined.
   This bill would require these parties to deal with each other in
good faith, as defined, and prohibit a franchisor or subfranchisor
from restricting the right of a franchisee to join or participate in
an association of franchisees to the extent the restriction is
prohibited by existing law. This bill would authorize a civil action
for a violation of these provisions that includes, but is not limited
to, rescission and an award of costs, reasonable attorney's fees,
and treble damages. This bill would also authorize a franchisor or
subfranchisor who becomes liable to make payments for a violation of
these provisions to recover contributions from any person who, if
sued separately, would also have been liable to make the same
payments.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Article 2.5 (commencing with Section 20016) is added to
Chapter 5.5 of Division 8 of the Business and Professions Code, to
read:

      Article 2.5.  Relationships Between Franchisor or Subfranchisor
and Franchisees


   20016.  Without limiting the other provisions of this chapter, the
following specific rights and prohibitions shall govern the
relations between a franchisor, subfranchisor, and franchisee:
   (a) (1) These parties shall deal with each other in good faith in
the performance and enforcement of the franchise agreement.
   (2) "Good faith" for purposes of this subdivision means honesty in
fact and the observance of reasonable commercial standards of fair
dealing in the trade.
   (b) A franchisor or subfranchisor shall not restrict the right of
a franchisee to join or participate in an association of franchisees
to the extent the restriction is prohibited by Section 31220 of the
Corporations Code.
   20017.  (a) A franchisor or subfranchisor who offers to sell,
sells, fails to renew or transfer, or terminates a franchise in
violation of Section 20016 shall be liable to the subfranchisor or
franchisee, who may sue for damages caused thereby or for rescission
or other relief as the court may deem appropriate.
   (b) The suit authorized pursuant to this section may be brought to
recover the actual damages sustained by the plaintiff together with
the cost of the suit, including reasonable attorney's fees, and the
court may in its discretion increase the award of damages to an
amount not to exceed three times the actual damages sustained.
   (c) A franchisor or subfranchisor who becomes liable to make
payments under this section may recover contributions from any person
who, if sued separately, would have been liable to make the same
payments.