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The Future Of Franchise Laws

A look ahead at franchise legislation that could be considered by the new Congress

Washington, DC, has settled into the groove of governing again, and that may mean new life for franchising legislation. This session, Congressmen Howard Coble (R-NC) and John Conyers (D-MI) plan to reintroduce the Small Business Franchise Act. Among other things, the bill would require franchisors to inform current franchisees of any expansion plans into their territories that might affect their businesses. It would also enable franchisees to pursue encroachments in federal courts, taking the burden of initiating legal action off the federal government.

As president and founder of the American Franchisee Association, Susan P. Kezios has pushed hard for the bill, arguing that it would cause franchisors to behave more reasonably and fairly. "There's nothing in the Coble-Conyers bill that doesn't already exist in some state statute, " Kezios says. "Even the encroachment provision comes from Iowa. The duty of good faith came from Washington state. The transfer provisions came from New Jersey. It's not like we created something out of thin air here."

When it was introduced in 1999, the Coble-Conyers bill never even made it to the House floor for a vote. David J. Kaufmann, a senior partner at New York City law firm Kaufmann, Feiner, Yamin, Gildin & Robbins LLP, which represents some of the nation's largest franchise systems, says it won't go much further this year. "When it comes to spouting reasons for supporting ill-conceived legislative proposals like the Small Business Franchise Act, franchisee advocates are frequently in error but apparently never in doubt," he says.

Recently, we asked Kezios and Kaufmann to talk with us about the prospects for franchising legislation in the new Congress.

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