For a while, franchising hearings were all the rage in the House Small Business Committee, as grievance after grievance echoed through the halls. Then-chair Rep. John J. LaFalce (D-NY) welcomed wronged franchisees to Capitol Hill with open arms. But LaFalce's successor, Rep. Jan Meyers (R-KS), drew those days to a halt--complete silence on the franchising issue ensued.
And what of the latest round of musical chairs in the House Small Business Committee? The committee's new chair, Rep. James Talent (R-MO), promises to follow in the footsteps of the retired Rep. Meyers, who placed franchising hearings immediately and firmly at the bottom of her priority list. "I agree with Ms. Meyers that there is no reason to be suspect of franchising arrangements," says Talent. He adds that although he doesn't believe all franchise arrangements are fair, he thinks they are better dealt with at the state level. "I don't see this as being a priority for the committee," he says.
Though Talent acknowledges that he could, like LaFalce, "put people before the committee who could tell you some horror stories--and there are some [horror stories] on both sides, to be sure," he just doesn't see franchise regulation as a responsibility of the federal government. "I'm generally not very hospitable to new federal regulations," Talent says. "There's also a tremendous danger of increasing the cost of franchising to the point where we foreclose an option that has been a tremendous avenue of upward advancement for many people. We don't want to make that arrangement so expensive or risky that companies don't engage in [franchising] anymore."
Even Rep. LaFalce, now serving his second term as ranking minority member of the Small Business Committee, has chosen to refocus his energies away from the franchising issue. With no one to hold the franchising regulation torch, several industry watchers wonder whether federal franchise regulation, poised just a few years ago to cross the bridge from concept to reality, has breathed its last.
Perhaps the situation isn't quite so definitive. "This doesn't strike me as the death of federal regulation," says Andrew A. Caffey, a franchise attorney in the Washington, DC, area. "But the issue is going into deep sleep for a while."
Whatever the climate, LaFalce will, at the very least,
reintroduce his franchising bills this session, says Dean Sagar, an
aide to LaFalce. "There's more a sense of holding the
line, maintaining a base
of people who are knowledgeable, until such a time that the issue can move again," says Sagar, who predicts "two years with very little motion."
And after the two years? "If the Democrats retake Congress, then I suppose we can expect a series of franchise hearings again," with or without LaFalce, says Caffey. "Mr. LaFalce is not the first champion of franchisee interests in Congress, and he won't be the last. I wouldn't be surprised if another congressional leader steps forward and suggests that it is time to once again look at franchising."