Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Franchisee Protection topic
No spam. Unsubscribe anytime.
Committee backs franchisee-protection measure after owners say buy-in promised Sunday closures were reversed
Summary
The committee passed and recommended HB 441 after franchise owners described being sold a business model that allowed them a day of worship off but later faced contract or operations-manual changes requiring Sunday openings; the panel adopted a first substitute and later recommended the bill with an 8-3 committee vote on final passage.
The House Business, Labor and Commerce Standing Committee adopted and later recommended favorably HB 441, the Franchisee Protection Act, after franchise owners testified they were sold opportunities that they said guaranteed a day off for worship or family and later faced corporate changes that required Sunday operations.
Representative Mike Ivory, sponsor of HB 441, said the bill is intended to ensure transparency for prospective franchisees. "It just simply says that if someone is going to invest their life savings or leave a corporate job for a franchise business opportunity, it needs to be clearly disclosed," Ivory said. A first substitute added clarifying language and excluded existing hotel and automobile franchise codes that are, by nature, operated seven days a week.
Several franchise owners of the same brand of bakery testified the brand originally allowed owners to remain closed on Sundays. One owner said the franchise was sold to a private-equity group that later amended the operations manual to require Sundays or otherwise threaten nonrenewal; she testified she had "dumped all my savings into this" and that the change threatened her ability to keep her family business. Another owner said closing Sunday is her only weekly day to avoid texts and emails and to worship.
Industry associations opposed the bill. Melva Sine, president of the Utah Restaurant Association, told the committee that most franchise agreements already state contracting terms including hours of operation and that operations manuals are updated routinely. The International Franchise Association's Jeff Hanscomb warned lawmakers the bill is overly broad and "a blatant insertion of the state legislature into the private contractual negotiations between two consenting parties." He said franchise agreements commonly allow an operations manual to be updated during the life of a long-term agreement.
Representative Ballard moved that the committee recommend HB 441 favorably. The committee first adopted the first substitute by voice vote and then recommended HB 441 favorably; later in the meeting a roll-call-style tally recorded the committee decision with eight members voting yes and three voting no (8-3). Sponsors said the bill is intended to provide disclosure so prospective franchisees can evaluate whether a business model fits their family's needs before investing.
