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House approves franchise disclosure bill requiring Sunday-open disclosure in agreements
Summary
First substitute HB441 requires franchisors to disclose contractual requirements that compel franchisees to operate on legal holidays such as Sunday; sponsors said the bill promotes transparency and fairness for franchisees and it passed the House.
The House on Feb. 20 passed first substitute House Bill 441, a proposal that would require franchisors to disclose, in original franchise agreements, any requirement that franchisees remain open on days that are legal holidays under state law — including Sunday.
Representative Ken Ivory, sponsor, said the measure "simply requires that if a franchisor is going to require that a franchisee remain open on Sunday ... it simply requires that there's disclosure in the original franchise agreement." Ivory and backers described the issue as one of contract transparency and fairness for franchisees who invest personal savings based on representations made when they buy a franchise.
Supporters argued that the bill strengthens free-market principles by enhancing transparency, allowing prospective franchisees to make informed decisions. Representative Steve Eliason, citing prior experience auditing franchisors, said the bill protects franchisees from ex post changes in operating requirements that can impose hardship.
The House adopted the first substitute and recorded final passage; the clerk reported the bill passed with 64 yes votes and 0 no votes in the transcript. Sponsors said the statute clarifies state law treatment of franchise agreements but does not prohibit franchisors from including operating-hour requirements in contracts.
