Governor Brown’s SB 610 Veto Leaves Small Businesses Vulnerable to Abuse by Corporate Franchisors

Sacramento, CA – California small business owners who are franchisees expressed disappointment in Governor Brown’s veto of SB 610, a bill that would have enabled businesses who invest in California jobs to operate under a fair set of rules.

“We are disappointed that Governor Brown ignored the small business owners who have invested our life savings and life’s work into creating California jobs, and instead sided with the giant corporate franchisors with his veto of SB 610 (Jackson),” said Keith Miller, Chairman of the national Coalition of Franchisee Associations.

California small business owners face widespread abuses under lop-sided corporate franchise agreements. As passed by the state legislature, SB 610 would have protected franchisees from losing the equity they’ve invested through the practice of “churning,” whereby franchisors take advantage of minor infractions to terminate franchise agreements, seize stores and resell them to higher bidders for the corporate franchisor’s profit. SB 610 would have also offered franchisees the right to pass on their franchise to their children or sell it to qualified buyers. The bill would also have protected franchisees from retaliation when they join franchisee associations to work through common problems and share ideas to make their businesses successful.

“California’s small business franchisees are disappointed in Governor Browns’ veto, but we are proud of the work we’ve done to bring this critical legislation this far. The majority of Assembly members and Senators recognized that California’s economy will be stronger when franchisees can operate under a fair system that rewards investment in California jobs,” said Kathryn Slater-Carter, a franchisee who had one of her McDonald’s restaurants taken away by the corporation at the end of her franchise term. “We will continue working to strengthen a growing sector of our economy because the success of franchisees is critical to California’s future.”

# # #

Comments are closed.