Governor Signs Small Business Franchise Protection Bill

SACRAMENTO, CA – Governor Jerry Brown signed legislation jointly authored by Assemblymember Bill Dodd (D-Napa) and several other legislators to protect small business owners who operate franchises. The bill was supported by a coalition of franchise owners and employee advocacy groups who reached a historic compromise with the association representing the major corporate chains.

“This bill provides a more stable future for small business franchise owners and their employees,” said Assemblymember Dodd. “As a small business owner for over 25 years, I believe the State of California needs to support our small businesses, and I’m proud to have partnered with a bipartisan group of legislators to make this bill a reality.”

AB 525 modifies certain provisions in the California Franchise Relations Act and increases the protections franchise business owners have regarding major chains terminating their franchise agreements. Existing law allowed parent companies the ability to revoke existing contracts over minor issues. Around the state there have been instances of small business franchisees being terminated for unfair or arbitrary reasons by their corporate parents due to small infractions.

“It’s important franchise chains are able to uphold their standards, but small business owners shouldn’t face the loss of their franchise and livelihood over minor issues,” Dodd said. “This bill strikes that balance, and we will see small businesses and their employees benefit as a result of the Governor’s signature.”

Dodd jointly authored AB 525 with a bipartisan group of legislators, including Assembly Majority Leader Chris Holden (D-Pasadena), Assembly Speaker Toni Atkins (D-San Diego) and Assemblymember Scott Wilk (R-Santa Clarita).

Assemblymember Bill Dodd represents the 4th Assembly District, which includes all or portions of Napa, Sonoma, Lake, Solano, Yolo, and Colusa Counties.

CONTACT: Ezrah Chaaban, (916) 319-2004