Massachusetts franchisees were given an opportunity to appeal to lawmakers June 29 as the state contemplates passing legislation that will reinforce fair dealing in franchisee-franchisor business contracts. Franchisees complain that power has shifted into the hands of franchisors over the past three decades, giving them power to terminate contracts at will, limiting court remedies and grouping franchises too closely to make profit. Powerful franchisors and the International Franchise Association oppose the new bill, arguing that more regulation will result in harm to the state economy. For more on this continue reading the following article from Blue MauMau.
Franchisees and a few franchisor advocates gathered on June 29 to be heard at the Massachusetts’ Committee on Community and Small Businesses. In a filled room, franchisees plead with state senators and representatives to provide fundamental protection from wayward franchisors.Their beef? Franchise owner-operators say that franchisors currently terminate their local businesses at will, set up competing stores too close, and prohibit them from taking their franchisor to court. Massachusetts has introduced two bills that aim to change the relationship between franchisors and the state’s franchised businesses.
An attorney who represents both franchisees and franchisors, Seth Stadfeld, thinks that the conflict is essentially one over power. Franchisees argue that the relationship, with the protection of the law, has moved almost completely to the franchisors over the past three decades. Franchised business owners want protection, while franchising firms want lawmakers to not mess with a good thing — for them. “Control is the name of the game, and control stems from rights,” declares Boston-based attorney Stadfeld. “Rights right now are really on the side of who has the power in the contract. Franchisors don’t want to lose a stitch of that power through any regulation. That’s what this fight is about.â€