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Senate committee clears bill barring out‑of‑state choice‑of‑law clauses in Arkansas franchise contracts
Summary
The Senate Insurance & Commerce Committee on a voice vote passed HB 18‑92 to amend the Arkansas Franchise Practices Act and void contract provisions that attempt to apply another state’s law instead of Arkansas law, a change sponsors said protects small franchise owners who work with larger out‑of‑state brands.
The Senate Insurance & Commerce Committee on [date not specified in transcript] passed House Bill 18‑92 to amend the Arkansas Franchise Practices Act and bar contractual provisions that attempt to replace Arkansas law with another state’s law.
Representative Richardson, who presented the bill, told the committee the measure responded to complaints from a Fort Smith small business owner who said larger companies asserted out‑of‑state contracts to avoid paying for brand development work here. "This bill now forces them to acknowledge Arkansas law and fall in line with that," Richardson said.
Chair members noted HB 18‑92 had no recorded opposition in the House and that sponsors reported unanimous support on the House floor. The chair asked for any objections; none were raised. The committee adopted a motion to pass the bill (moved by Senator Teague; seconded by Senator Johnson) and the measure passed on a voice vote.
Why it matters: Sponsors said the change closes a contractual loophole that can deprive Arkansas‑based franchisees of remedies under state law when disputes arise with out‑of‑state franchisors. The bill is intended to protect small businesses that create local brands and then contract with larger entities.
Next steps: The committee passed HB 18‑92 out of committee; the transcript does not specify final House/Senate floor scheduling or an effective date.
