BILL NUMBER: SB 610	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 8, 2013

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 amended, 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   franchisee to
bring an action against a franchisor or subfranchisor who offers to
sell, sells, fails to renew or transfer, or terminates a franchise in
violation of these provisions for damages caused thereby, or for
rescission or other relief deemed appropriate by the court. This bill
would additionally authorize a court in its discretion to increase
the award of damages to an amount not to exceed 3 times the actual
damages sustained and to award reasonable costs and attorney's fees
to a prevailing plaintiff  . 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.

    20017.    (a) A franchisee may bring an action
against a franchisor or subfranchisor who offers to sell, sells,
fails to renew or transfer, or terminates a franchise in violation of
Section 20016 for damages caused thereby, or for rescission or other
relief deemed appropriate by the court. In addition, the court may
in its discretion increase the award of damages to an amount not to
exceed three times the actual damages sustained and may award
reasonable costs and attorney's fees to a prevailing plaintiff. 

   (c) 
    (b)  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.