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Subcommittee advances bill limiting post‑term noncompetes for franchisees
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Summary
HB 696, to govern Virginia franchise agreements sold in-state and to restrict certain post‑termination noncompete clauses, was reported out 9–0; franchisee witnesses urged stronger protections while the International Franchise Association opposed the bill as written.
Delegate Helmer told the subcommittee HB 696 would require that franchise agreements sold in Virginia be governed by Virginia law and would disallow certain post‑termination noncompete clauses that prevent franchisees from re-entering similar businesses for a period after contract termination. "This just levels the playing field a bit for our small businesses," Helmer said.
Small-business franchisee Michael Doherty described buying franchises with personal assets at risk and urged protections that address sophisticated tools franchisors use to limit resale or competition. Matthew Cagle of the International Franchise Association opposed the bill as drafted, saying broad prohibitions could increase litigation and harm brand standards and asked to work on targeted amendments.
The subcommittee reported HB 696 out by a vote of 9–0.
