BILL NUMBER: SB 610	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JUNE 24, 2013
	AMENDED IN SENATE  MAY 9, 2013
	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.  Existing law provides that any
condition purporting to bind any person to waive compliance with the
act is contrary to public policy and void. 
   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   The 
bill would authorize a 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  temporary and permanent injunctive relief, and
 damages caused thereby, or for rescission or other relief
deemed appropriate by the court.  This   The
 bill would additionally authorize a court in its discretion to
award reasonable costs and attorney's fees to a prevailing plaintiff.
 This   The  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.  The bill would prohibit a franchisor or
subfranchisor   from requiring a franchisee to waive its
rights as a condition of doing business with the franchisor or
subfranchisor, and would provide that any waiver that is required as
a condition of doing business shall be presumed unenforceable. The
bill would authorize a franchisor or subfranchisor to enforce a
waiver of rights under these provisions only if the waiver is
knowing, voluntary, and not made as a condition of doing business
with the franchisor or subfranchisor. 
   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 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 temporary and permanent injunctive relief, and  for
damages caused thereby, or for rescission or other relief deemed
appropriate by the court. In addition, the court may in its
discretion award reasonable costs and attorney's fees to a prevailing
plaintiff.
   (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. 
   20018.  A franchisor or subfranchisor shall not require that the
franchisee waive any right provided for in this article as a
condition of doing business with the franchisor or subfranchisor. Any
waiver by the franchisee of a right under this article shall be
knowing and voluntary, and not made a condition of doing business
with a franchisor or subfranchisor. Any waiver that is required as a
condition of doing business with a franchisor or subfranchisor shall
be presumed involuntary, unconscionable, against public policy, and
unenforceable. The franchisor or subfranchisor may enforce an
agreement regarding any waiver of rights under this article if the
franchisor or subfranchisor shows that the agreement was knowing,
voluntary, and not made a condition of doing business with the
franchisor or subfranchisor.