BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  SB 610
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          Date of Hearing:   August 13, 2013

              ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER  
                                     PROTECTION
                               Susan A. Bonilla, Chair
                    SB 610 (Jackson) - As Amended:  June 24, 2013

           SENATE VOTE  :   22-12
           
          SUBJECT  :   Franchises.

           SUMMARY  :   Revises the California Franchise Relations Act (CFRA)  
          to explicitly require franchisors and franchisees to deal with  
          each other in good faith, as defined, in the performance and  
          enforcement of a franchise agreement; prohibits a franchisor  
          from restricting the right of a franchisee to join or  
          participate in an association of franchisees; and authorizes a  
          private right of action for violation of these provisions that  
          may be remedied by injunctive relief, damages, rescission,  
          reasonable costs and/or attorneys' fees.   Specifically,  this  
          bill :   

          1)Requires that franchisors, subfranchisors, and franchisees  
            deal with each other in good faith in the performance and  
            enforcement of the franchise agreement.

          2)Defines good faith to mean honesty in fact and the observance  
            of reasonable commercial standards of fair dealing in the  
            trade. 

          3)Prohibits 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.

          4)Authorizes a franchisee to file suit against a franchisor or  
            subfranchisor who offers to sell, sells, fails to renew or  
            transfer, or terminates a franchise in violation of this bill  
            for temporary and permanent injunctive relief, and for damages  
            caused thereby or for rescission or other relief deemed  
            appropriate by the court; further authorizes the court to  
            award, in its discretion, reasonable costs and attorney's fees  
            to a prevailing plaintiff.

          5)Permits a franchisor or subfranchisor who becomes liable as a  








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            result of a lawsuit by a franchisee to make payments to  
            recover contributions from any person who, if sued separately,  
            would have been liable to make the same payments.

          6)Prohibits a franchisor or subfranchisor from requiring that  
            the franchisee waive any right provided by this bill as a  
            condition of doing business with the franchisor or  
            subfranchisor.

          7)Requires that any waiver by the franchisee of a right under  
            this bill be knowing and voluntary, and not made a condition  
            of doing business with a franchisor or subfranchisor.

          8)Requires that any waiver that is required as a condition of  
            doing business with a franchisor or subfranchisor be presumed  
            involuntary, unconscionable, against public policy, and  
            unenforceable. 

          9)Authorizes the franchisor or subfranchisor to enforce an  
            agreement regarding any waiver of rights under this bill 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.

           EXISTING LAW:  

          1)Creates CFRA which:

             a)   Defines a franchise as a contract between two or more  
               persons by which: 

               i)     a franchisee is granted the right to offer, sell or  
                 distribute goods or services under the plan or system of  
                 the franchisor; 

               ii)    operation of the business is substantially  
                 associated with franchisor's trademark, advertising or  
                 other symbol; and, 

               iii)   a franchise fee is paid by the franchisee. (Business  
                 & Professions Code (BPC) Section 20001)
                  
             b)   Excludes from the definition of a franchise those  
               governed by the Petroleum Marketing Practices Act; lease  
               departments, licenses, or concessions at or with a general  








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               merchandise retail establishment; and, a cooperatively  
               operated nonprofit organization. (BPC 20001)

             c)   Provides that any condition, stipulation or provision  
               waiving compliance with the CFRA is contrary to public  
               policy and void.  (BPC 20010)

             d)   Prohibits termination of a franchise agreement prior to  
               the end of the term, except for good cause, which includes  
               failure to comply with any lawful requirement of the  
               franchise agreement after written notice and a reasonable  
               opportunity (no more than 30 days) to cure.  (BPC 20020)

             e)   Authorizes the immediate termination of a franchise  
               agreement without notice or an opportunity to cure in cases  
               of bankruptcy, abandonment, mutual agreement, material  
               misrepresentation, failure to comply with the law after  
               notice, repeated noncompliance after cure, seizure of the  
               premises by a governmental entity or creditor, conviction  
               of a felony or relevant misdemeanor, failure to pay  
               franchisee fees within five days of overdue notice, and  
               imminent danger to public health or safety. (BPC 20021) 

             f)   Requires a franchisor to notify the franchisee of its  
               intention not to renew a contract at least 180 days prior  
               to the expiration of the franchise in specified  
               circumstances, during which time the franchisee may attempt  
               to find a buyer acceptable to the franchisor.  (BPC 20025)

             g)   Requires a franchisor that terminates or fails to renew  
               a franchise without complying with the CFRA to offer to  
               repurchase the franchisee's resalable current inventory at  
               the lower of the fair wholesale market value or the price  
               paid by the franchisee.  (BPC 20035) 

          2)Creates the California Franchise Investment Law (CFIL), which:

             a)   Makes it a violation of the CFIL for any franchisor,  
               directly or indirectly, through any officer, agent or  
               employee, to restrict or inhibit the right of franchisees  
               to join a trade association or to prohibit the right of  
               free association among franchisees for any lawful purposes.  
                (Corporations (CORP) Code Section 31220)

             b)   Provides that any person who offers or sells a franchise  








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               in violation of specified sections of the CFIL or in  
               violation of any provision that provides an exemption from  
               the requirements of the CFIL, as specified, shall be liable  
               to the franchisee or subfranchisor, who may sue for damages  
               caused thereby, and if the violation is willful, the  
               franchisee may also sue for rescission, unless, in  
               specified cases, the defendant proves that the plaintiff  
               knew the facts concerning the untruth or omission, or that  
               the defendant exercised reasonable care and did not know,  
               or, if he/she had exercised reasonable care, would not have  
               known, of the untruth or omission. (CORP 31300)

             c)   Allows any person who violates the right to free  
               association to be sued in the superior court in the county  
               in which the defendant resides or where a franchise  
               affected by the violation does business, for temporary and  
               permanent injunctive relief and for damages, if any, and  
               the costs of suit, including reasonable attorneys' fees.   
               Further provides that a plaintiff shall not be required to  
               allege or prove that actual damages have been suffered in  
               order to obtain injunctive relief.  (CORP 31302.5)

             d)   Prohibits an action from being maintained to enforce any  
               liability for violation of the right of free association  
               unless it is brought within two years after the violation  
               upon which it is based or within one year after the  
               discovery by the plaintiff of the facts constituting such  
               violation, whichever occurs first. (CORP 31302.5)

             e)   Except as explicitly provided, prohibits civil liability  
               in favor of any private party against any person by  
               implication from or as a result of the violation of any  
               provision of CFIL or any rule or order thereunder. (CORP  
               31306)

           FISCAL EFFECT  :   None.  This bill has been tagged non-fiscal by  
          the Legislative Council. 

           COMMENTS  :   

           1)Purpose of this bill  .  This bill aims to shift the balance of  
            power in franchisor-franchisee relationships by creating a  
            'right to good faith' in performance and enforcement of the  
            franchise contract, and providing a private right of action  
            with explicit remedies to enforce these and other rights. This  








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            bill is sponsored by the American Association of Franchisees  
            and Dealers.

           2)Author's statement  .  According to the author, "Franchisees  
            strongly believe that their business relationship is one-sided  
            in favor of franchisors?Franchisees suggest that this  
            disparity could be significantly lessened by several revisions  
            to the [CFRA]. SB 610 would implement two of their reform  
            proposals: 1) allowing franchisees to associate freely with  
            fellow franchisees in their system, and 2) by assuring that  
            each of the parties deal in good faith. This bill allows  
            franchisees a limited private right of action to seek  
            temporary and permanent injunctive relief and damages for  
            violations of these provisions." 
             
             The author also cites an excerpt from a court decision by the  
            California Court of Appeal (2nd Dist.), which described the  
            franchise dynamic as follows:

               "The relationship between franchisor and franchisee is  
               characterized by a prevailing, although not universal,  
               inequality of economic resources between the contracting  
               parties. Franchisees typically, but not always, are small  
               businessmen or businesswomen or people seeking to make the  
               transition from being wage earners and for whom the  
               franchise is their very first business. Franchisors  
               typically, but not always, are large corporations. The  
               agreements themselves tend to reflect this gross bargaining  
               disparity. Usually they are form contracts the franchisor  
               prepared and offered to franchisees on a  
               take-it-or-leave-it basis. (Emerson,  Franchising and the  
               Collective Rights of Franchisees  (1990) 43 V and L. Rev.  
               1503, 1509 & fn. 21.) . . . Some courts and commentators  
               have stressed the bargaining disparity between franchisors  
               and franchisees is so great that franchise agreements  
               exhibit many of the attributes of an adhesion contract and  
               some of the terms of those contracts may be unconscionable.  
                Postal Instant Press v. Sealy, 43 Cal. App. 4th 1704,  
               1715-1717 (1996.)"   
             
           3)Current law regulating the franchisor/franchisee relationship  .  
             A substantial part of California franchise law as a whole is  
            largely embodied in CFIL and CFRA, although certain specific  
            industries (i.e., filling stations) have their own unique  
            provisions as well. 








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          CFIL was enacted in 1970 to regulate franchise investment  
            opportunities in order to protect California investors from  
            potentially fraudulent franchise investments.  CFIL generally  
            requires franchisors to disclose to prospective franchisees  
            the information necessary to make an informed decision about  
            franchise offers, and prohibits the sale of franchises that  
            would lead to fraud or the likelihood that a franchisor's  
            promises would not be fulfilled.  CFIL contains explicit  
            provisions for enforcement generally through damages (payment  
            for economic losses) and rescission (cancellation of the  
            contract).  It also provides for injunctive relief (to require  
            or prohibit a specific action), reasonable costs and  
            attorneys' fees in certain circumstances.  

            CFRA (which excludes petroleum-related franchises, like gas  
            stations) was subsequently enacted in 1980 to govern  
            relationships between franchisors and franchisees after they  
            have entered into contract with each other.  CFRA is designed  
            to prevent unfair practices in the termination, renewal or  
            transfer of a franchise.  CFRA prohibits termination of a  
            franchise agreement except for good cause and only after  
            notice and an opportunity to fix the problem.  It also lays  
            out certain circumstances where immediate termination is  
            permitted, for example: bankruptcy, abandonment, mutual  
            agreement, material misrepresentation, illegal activity,  
            noncompliance with the franchise agreement, failure to pay  
            franchise fees, and imminent danger to the public.  CFRA  
            prohibits nonrenewal of a franchise agreement without 180 days  
            prior notice, and with certain additional protections for the  
            franchisee.  It also provides for the transfer of ownership to  
            surviving spouses or heirs.  CFRA does not contain explicit  
            enforcement provisions except for the buyback of inventory  
            when a franchise is improperly terminated or nonrenewed,  
            although general contract remedies may still be available. 

            In 2012, AB 2305 (Huffman) was introduced to amend both the  
            CFIL and CFRA to add multiple protections for franchisees and  
            prohibitions against unfair practices by franchisors.  Those  
            provisions included the same rights of good faith and free  
            association, as well as the private right of action, contained  
            in SB 610.  It would also have provided protection against  
            distant legal venues, prohibition of termination without good  
            cause, time to cure defects in franchise agreement compliance,  
            12 months' notice of nonrenewal, greater selection of vendors,  








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            a cause of action for dilution by placement of competing  
            franchises in close proximity, a duty of competence on the  
            part of the franchisor, inheritance provisions, requirement of  
            cause for denial of transfer, a relaxation of standards for a  
            cause of action, and the potential award of reasonable court  
            costs and attorney's fees in legal action.  That bill died in  
            the Assembly Business, Professions and Consumer Protection  
            Committee.

           4)Justification for SB 610  .  Supporters of this bill point to  
            both a systemic problem as justification (an imbalance in  
            bargaining power between the franchisor and the franchisee),  
            and a host of specific abuses of that power which make this  
            bill necessary. 

          As noted above, supporters argue that the inherent asymmetry in  
            bargaining power enables franchisors to take unfair advantage  
            of franchisees. Quoting a 1969 treatise on franchises,  
            entitled "Franchising: A Trap for the Trusting", supporters  
            say "At the core of the franchise relationship is the  
            contractual control exercised by the franchisor over every  
            aspect of the franchisee's business?The franchisor controls  
            the site, commissary purchases, purchases from other vendors,  
            methods of business operations, labor practices, quality  
            control, merchandising, and even record keeping.  This control  
            is buttressed by the contractual requirement that the  
            franchisee must obey the commands of the Operating Manual as  
            unilaterally amended from time to time and as expounded by the  
            franchisor's supervisor, on pain of losing the franchise if he  
            disobeys them and under constant threat of such termination.  
            And upon termination, or failure to renew, the franchisee is  
            confronted with the covenant not to compete and forfeiture of  
            his equity in the business." 

          Examples of specific abuses alleged by supporters include:  
            refusal to communicate with franchisees; putting new and  
            competing stores in close proximity to the franchisee causing  
            a unreasonable dilution of profits; unfair terms for renewal,  
            including expensive investments in facility upgrades and  
            remodeling; excessive control over advertising rates, building  
            and equipment standards, and franchisee behavior through  
            franchisor-sponsored organizations; excessive, compulsory and  
            distant meetings with heavy associated costs; requirements to  
            use specific and expensive point of sale software; little  
            flexibility in changing prices; use of arguable building and  








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            equipment valuation methods which can reduce the value of a  
            franchise when being sold back to the franchisor; and the  
            continued exaction of royalty payments even after a franchise  
            has gone bankrupt.   

          The counter argument, of course, is that the franchise agreement  
            was freely entered into by both parties, and after extensive  
            disclosures to the franchisee, as required by CFIL.

           5)Key components: good faith, free association, private right of  
            action, waiver protections  . This bill contains four key  
            provisions: creation of a good faith standard; creation of a  
            right of free association; creation of a right of private  
            action for franchisees coupled with explicit legal remedies;  
            and protections against the mandatory waiver of rights.

              a)   Right of good faith in performance and enforcement  .  SB  
               610 requires that parties to a franchise agreement "deal  
               with each other in good faith in the performance and  
               enforcement of the franchise agreement."  "Good faith" is  
               defined in this bill as "honesty in fact and the observance  
               of reasonable commercial standards of fair dealing in the  
               trade." What actually constitutes good faith in such  
               relations can be a complex legal question.

               Good faith is an implied covenant in contract law, which  
               means that it is assumed that both parties enter into the  
               agreement without malicious intent and with a desire for  
               each party to benefit fairly. 

               Generally speaking, legal remedies in a contract law  
               setting are focused on economic compensation that provides  
               the injured party with the nearest equivalent of the  
               benefit of the contract, had it been performed.  

               The Restatement of Contracts, 2d, describes good faith and  
               fair dealing this way: "Subterfuges and evasions violate  
               the obligation of good faith in performance even when the  
               actor believes his conduct to be justified.  But the  
               obligation goes further: bad faith may be overt or may  
               consist of inaction, and fair dealing requires more than  
               honesty.  A complete catalogue of types of bad faith is  
               impossible, but the following types are among those which  
               have been recognized in judicial decisions: evasion of the  
               spirit of the bargain, lack of diligence and slacking off,  








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               willful rendering of imperfect performance, abuse of a  
               power to specify terms, and interference with or failure to  
               cooperate in the other party's performance."  (Rest.2d,  
               Contracts Section 205, comment (d).)   

               Presumably, a court wishing to construe the meaning of  
               'good faith' contained in this bill would look to  
               California's own Uniform Commercial Code (UCC) for  
               guidance. The UCC recognizes an obligation of good faith in  
               the performance and enforcement of every contract or duty,  
               and defines good faith in a merchant context as "honesty in  
               fact and the observance of reasonable commercial standards  
               of fair dealing in the trade." (UCC Section 2-103(1)(b))   
               Conversely, "bad faith" generally describes behavior that  
               violates community standards of decency, fairness or  
               reasonableness. 

               Despite the existence of this implied obligation under  
               current law, supporters argue that the covenant is usually  
               beat out by explicit provisions in the contract. In other  
               words, supporters argue that franchise contracts are  
               written primarily to benefit the franchisor, and that the  
               covenant of good faith and fair dealing is often little  
               help against the explicit language of a valid contractual  
               agreement.  However, that subordination is undermined if  
               the covenant is no longer implied in common law but  
               commanded in statute. 
                
               The key element of the good faith requirement is its  
               breadth - it could be applied to any number of situations  
               (as the Restatement 2d noted above, "a complete catalogue  
               of types of bad faith is impossible"). This is viewed as an  
               advantage to supporters, who view it as a kind of  
               all-purpose requirement for franchisors to act properly,  
               giving franchisees new leverage in the context of a  
               franchise agreement where the written terms can be very  
               open-ended and quite one-sided. In conjunction with the  
               newly added private right of action and legal remedies, a  
               franchisee that feels unfairly treated would have a new  
               legal tool to seek redress in situations where the  
               franchise agreement itself provides no obvious remedy.   
               Supporters note that the states of Iowa, Hawaii and  
               Washington have enacted similar laws requiring parties to  
               franchise agreements to deal with each another in good  
               faith, although it is not known how those statutes have  








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               been applied or construed. 

               Unfortunately, opponents view a statutory application of  
               the same principle as an invitation to contractual anarchy.  
               It is unclear, they contend, how a court will go about  
               making a decision when an allegation of bad faith is  
               brought because of conduct that was specifically authorized  
               in a valid franchise agreement - does that mean that the  
               good faith requirement trumps the express language of the  
               agreement? What standard, for example, would a court apply  
               to determine a 'good faith' number of required weekly  
               bathroom cleanings under the Operations Manual, if a  
                                                                             franchisee chose to dispute it? Would a judge be empowered  
               to rewrite or suspend terms of the contract, whether  
               directly or indirectly, and then hold the parties  
               accountable to the new standards for the life of the  
               contract?  This breadth and the uncertainty it introduces,  
               is a constant theme in opponent communications. 

              b)   The right of free association  .  This bill prohibits  
               franchisors from restricting the right of a franchisee to  
               join or participate in an association of franchisees.   
               However, such a restriction already exists in the CFIL  
               (CORP 31220).  The only practical difference this provision  
               may have is that the new remedies created by this bill,  
               which are slightly broader than those in the CPIL for this  
               right, would be applicable.

              c)   A private right of action  . The third major component of  
               this bill is the creation of a private right of action for  
               the franchisee.  This would permit the franchisee to file a  
               lawsuit against the franchisor alleging a violation of law  
               and seeking a legal remedy from the court if the franchisor  
               offers to sell, sells, fails to renew or transfer, or  
               terminates a franchise in violation of the rights to good  
               faith and association.  The remedies available include an  
               injunction (an order of the court to require or prohibit a  
               particular action), monetary damages, rescission  
               (cancellation of the contract), or "other relief deemed  
               appropriate by the court."  A prevailing franchisee could  
               also seek reasonable court costs and attorney's fees, at  
               the court's discretion.

             Under contract law, the injured party usually should not end  
               up in a better financial position after the breach.  This  








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               is different from tort law, which is applied in other types  
               of relationships where one individual may breach a duty of  
               care to another, causing them to be personally injured and  
               thereby creating a cause of action to seek economic damages  
               (health care costs, lost wages, etc.) and noneconomic  
               damages (pain and suffering, punitive damages, etc), among  
               other things. The law of torts exists to compensate a  
               victim for an injury, but also serves to punish the  
               defendant and discourage others from negligent or  
               intentionally harmful behavior in the future.

               According to one franchise attorney, the remedies currently  
               available under CFRA are limited.  Other supporters have  
               said that standard contract remedies can be sought, but  
               those are often limited and do not encompass noneconomic  
               damages more commonly found in tort law (i.e., emotional  
               distress). One federal court decision limited the amount of  
               damages of a wrongly terminated franchisee to requiring a  
               buyback of the franchisee's inventory.  In comparison, the  
               CFIL already contains a private right of action, although  
               the available remedies are narrower.  This bill provides  
               CFRA with broad, clear remedies.  

               Supporters contend that these remedies make enforcement of  
               the entire CFRA far more effective, and help rectify the  
               imbalance of bargaining power and resources between the  
               franchisor and franchisee. They also argue that franchisors  
               already have multiple enforcement mechanisms at their  
               disposal, often within the franchise agreement itself.  
               Opponents argue that the private right of action, and even  
               the attorney's fees provision, are unfairly constructed to  
               be available only to the franchisee, which is illogical  
               given that the underlying right of good faith applies  
               equally to both parties. 

              d)   Waiver provisions  . Finally, this bill makes clear that  
               franchise agreements cannot require franchisees to waive  
               any of their rights under CFRA as a condition of doing  
               business with the franchisor, unless the franchisee does so  
               knowingly and voluntarily. Any such waivers would be  
               presumed involuntary unless proven otherwise. A similar  
               prohibition on mandatory waivers exists in the CFIL.
                
           6)Arguments in support  .  According to the American Association  
            of Franchisees & Dealers, "Modern franchise relationships are  








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            most always governed by one-sided 'take it or leave it'  
            adhesion contracts that elicit substantial monetary investment  
            from franchise owners, but severely limit a franchisees'  
            rights in the franchise relationship. Creating a statutory  
            affirmative duty of good faith in franchise relationships will  
            inhibit the enforcement of one-sided franchise agreements in  
            an abusive manner.  Long term, the best opportunity to create  
            a level playing field in franchise relationships is to  
            encourage effective franchisee associations with sufficient  
            leverage to negotiate franchise agreements and relationships  
            that respect the legitimate interests of both franchisors and  
            franchisees.  The two prongs of [SB 610], and the included  
            remedies for violations, will provide significant safeguards  
            against abuse in franchise relationships."

          According to the Pacific Management Consulting Group, which  
            provides chain restaurant analysis and consulting, "SB 610  
            creates an affirmative right for franchisees to freely  
            associate via associations but most crucially, allows for  
            defined franchisee remedies at law should the relationship run  
            aground.  It creates an affirmative duty of good faith for  
            both franchisees and franchisors. This is needed because  
            franchise contracts have become one sided contracts, and  
            franchisees have few rights.  California's franchise code was  
            last updated in 1986 and needs updating. 

          "?The opponents of SB 610 have noted that any regulation is too  
            much, and that SB 610 would destroy the ability of the  
            franchisor to maintain brand strategies.  That is simply not  
            true?They also maintain that California franchise development  
            would come to a halt, but they can't answer why then Dunkin  
            Donuts is now marching into California with a hoped for one  
            thousand (1000) franchise stores. And they can't answer why  
            franchising hasn't come to a halt in Iowa, Washington and  
            Hawai'i, which have [a] similar good faith franchising law on  
            the books."

            The Coalition of Franchisee Associations also contends that  
            "This will not 'unravel' franchise agreements or weaken brand  
            standards as opponents claim.  In fact, similar language  
            exists today in Iowa (Sec. 523H.10), Hawaii (Sec 482E-6), and  
            Washington (Section 19.100.180) Franchising continues to grow  
            in those states, brand standards are enforced the same, and  
            there is no increase in lawsuits."









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           7)Arguments in opposition  . A broad coalition of opponents  
            writes: "SB 610 seeks to introduce ambiguity into the  
            franchise contractual relationship by layering on an amorphous  
            concept of 'good faith' and 'commercial reasonableness in the  
            trade'. The concept of 'good faith' was created in the [UCC]  
            to fill in the blanks on short form contracts for the sale of  
            goods. However, in the context of detailed franchise contracts  
            which govern complex and ongoing business relationships, it  
            provides no benefit and creates uncertainty as to the  
            enforceability of the contracts and standards.

          "This, coupled with the one-sided attorney's fees provision,  
            make this bill a lucrative option for a non-performing  
            franchise to sue a franchisor if the franchisee later does not  
            want to abide by the contract and the terms to which they  
            knowingly agreed. This will lead to costly litigation and  
            reduce the ability to settle disputes between the parties, and  
            inferior products and services being delivered to consumers.   
            Further, the sweeping liability provisions in SB 610 has the  
            potential to create unlimited damages, not only contract  
            damages, but tort damages that could mean punitive or other  
            damages as well. The duty of good faith is so ill-defined that  
            any kind of claimed violation or minor problem could result in  
            substantial damages for franchise businesses, ultimately  
            harming the brand equity for franchisors and franchisees  
            maintaining the brand standards.  On top of all that, the  
            attorney's fees provision provides an instant incentive to  
            file suit and ask questions later.

          "California law and the Federal Trade Commission require  
            extensive disclosure documents be provided to franchisees  
            before entering into a franchise agreement, so both parties  
            know what is expected of each other.  Allowing substandard  
            franchisees the ability to allege the franchisor's failure to  
            follow some amorphous standard instead of adhering to their  
            contractual terms will have a significant negative impact on  
            franchisors and franchisees who work hard every day to ensure  
            the integrity of the brands they represent." 

           8)Related legislation  . AB 1141 (Dahle) would enact the Small  
            Business Investment Protection Act of 2013 to incorporate some  
            of the good faith and rights association provisions of SB 610  
            as well as changes to the right to terminate a franchise  
            agreement. AB 1141 was held in the Assembly Judiciary  
            Committee. 








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           9)Previous legislation  . AB 2305 (Huffman) of 2012 would have  
            enacted The Level Playing Field for Small Business Act of 2012  
            to revise the rights and responsibilities of franchisors and  
            franchisees as well as the rules that govern the franchise  
            relationship in California. AB 2305 was held in the Assembly  
            Business, Professions and Consumer Protection Committee. 

           10)Double-referral  .  This bill was heard in the Assembly  
            Judiciary Committee on June 18, 2013, and was passed out on a  
            7 to 2 vote. 

           REGISTERED SUPPORT / OPPOSITION  :

           Support 
           
          American Association of Franchisees and Dealers
          C & S Restaurants, Inc. 
          Coalition of Franchisee Associations 
               (Asian American Hotel Owners Association, Buffalo Wings  
               National Franchisee Association, Domino's Franchisee  
               Association, Dunkin' Donuts Independent Franchise Owners,  
               Edible Arrangements Independent Franchise Association,  
               Independent Association of Massage Envy Regional  
               Developers, Independent Coalition of Franchise Owners,  
               Independent Hardee's Franchisee Association, Independent  
               Organization of Little Caesars Franchisees, Long John  
               Silver's Franchisee Association, Meineke Dealers  
               Association, National Coalition of Associations of 7-Eleven  
               Franchisees, National Franchisee Association, North  
               American Association of SUBWAY Franchisees, Pharmacy  
               Franchisees and Owners Association, San Francisco -  
               Monterey Bay 7-11 Franchise Owners Association, Service  
               Station Franchise Association, Supercuts Franchisee  
               Association)
          Lagarias Law Offices
          Pacific Management Consulting Group
          Perris Valley Chamber of Commerce
          Pinnacle Real Estate Holdings, Inc.
          QSR Express, Inc.
          Service Station Franchise Association
          712 individuals
           
            Opposition 
           








                                                                  SB 610
                                                                  Page  15

          AAMCO
          ACFN Franchised, Inc.
          Allied PRA
          Always Best Care Senior Services
          AmeriSpec & Furniture Medic
          Aussie Pet Mobile, Inc.
          Bottle & Bottega
          BP America (AM PM)
          BrightStar Care
          California Chamber of Commerce 
          California Closets
          California Grocers Association 
          California Manufacturers & Technology Association
          California Retailers Association 
          Civil Justice Association of California
          FASTSIGNS International
          Fatburger
          FirstService Brands
          FOCUS Brands 
               (Auntie Anne's, Carvel, Cinnabon, Moe' Southwest Grill,  
          Schlotsky's)
          Franchise Services, Inc. 
          FranNet
          Go Mini's Moving & Portable Storage
          Golden Corral - Tracy, CA
          Home Instead Senior Care
          Interim Health Care
          International Franchise Association 
          Jani-King
          Keepsake Companions Inc.
          KidsPark
          Max Muscle Sports Nutrition
          menchie's
          Merry Maids
          Mr. Rooter of Sonoma County
          MSA Worldwide
          No Frill Franchising, Inc. - Instant Imprints
          Postal Instant Press
          Renaissance Executive Forums
          Right At Home
          Round Table Pizza
          Scooter's Jungle
          ServiceMaster Clean
          Sizzler USA
          Sky Zone Franchise Group, LLC








                                                                  SB 610
                                                                  Page  16

          Star Franchise Association
          The Dwyer Group 
               (AirServ, Glass Doctor, The Grounds Guys, Mr. Appliance,  
               Mr. Electric, Mr. Rooter, Portland Glass, Rainbow  
               International)
          The Entrepreneur Authority, Auburn CA
          The Johnny Rockets Group, Inc.
          The UPS Store, Inc.
          Two Men And A Truck
          West's Insurance Agency
          2 individuals

           Analysis Prepared by  :    Hank Dempsey / B.,P. & C.P. / (916)  
          319-3301