Franchise Protection Act advances after testimony from franchisees and industry groups

The Taxation Committee voted to recommend first-substitute House Bill 441, the Franchise Protection Act, after testimony from franchise owners and industry representatives and a discussion of potential ambiguities in the bill’s language.

Representative Ivory said the bill aims to increase transparency in franchise relationships where large franchisors or successor owners attempt to change operational terms that earlier franchisees were sold on, particularly the ability to close on Sundays. "This simply promotes transparency," the sponsor said, framing the bill as protecting small-business franchisees who invested under representations about operations.

Franchisee Alyssa Jensen described her experience operating bakeries in Lehi and Orem, saying her family bought franchises with the option to be closed on Sundays and that she received a recent threat of contract nonrenewal. "This is our livelihood," she said, asking the committee to protect franchisees’ ability to keep a day of rest for religious reasons.

Jeff Hanscomb of the International Franchise Association testified in opposition and urged the committee to reject the measure. He argued operations manuals and the possibility of updates were transparent in original franchise agreements and warned the bill would affect thousands of franchise locations in Utah and create ambiguity, including by using undefined terms such as "deeply held religious belief." He also said the bill would create uneven treatment between existing and future franchisees.

Kelly Clayton, an owner of Nothing Bundt Cakes locations, supported the bill and said owners were promised variances for Utah locations and that private equity owners are prioritizing returns over small-business concerns. She said owners needed the protection to preserve their livelihoods and staff schedules.

Committee members expressed sympathy for franchisees but also flagged ambiguities the sponsor agreed to fix by working with members on amendments — for example, how transfers and resale of franchise locations should be treated and how to avoid duress sales that force franchisees into rushed transactions. With amendments promised to address those concerns, the committee voted to pass the first substitute to the floor with a favorable recommendation; the sponsor and committee chairs asked to continue work on wording before floor consideration.