Learn the Facts
Florida is home to more than 40,000 small business locations owned and operated by local franchisees, who provide over 404,000 jobs to Floridians. These business owners affiliate with nationally known brand names – but they chose to take a risk, invest their personal finances, and create opportunities within communities here in Florida.
The Franchisor/Franchisee Relationship
- Invest hundreds of thousands of dollars in their businesses
- Employ Floridians
- Are committed to and support Florida communities
- Pay sales and property taxes here in Florida
- Corporate brands
- Pay none of these taxes
- Directly employ few workers in Florida
- Do not risk financial loss from shutting down a local store
The Protect Florida Small Business Act, sponsored by Sen. Jack Latvala (SB 750), will bring fairness to the relationship between corporations and the Floridians who own and work in franchise establishments. The rights of Florida business owners to protect their investment in Florida will be balanced against the big corporate brands’ ability to protect their trademarks and business model.
This legislation will address three key areas:
- Protection from unjust terminations
- Protections from unjust restrictions on sales & transfers
- Protection from non-renewal of their agreement
Protection from Unjust Terminations
- Current Florida law allows corporate franchisors to terminate a franchise without good cause.
- This means people can lose their jobs and the local economy suffers just because the corporation made a decision on its own.
- Under the proposed legislation, corporate franchisors may continue to oversee the integrity of their brand, but they will have to provide a just reason for any terminations.
- It’s important to note that this legislation would only apply to renewals and new franchise contracts after the bills effect date – not existing ones.
Protections from Unjust Restrictions on Sales & Transfers
- Corporate franchisors now enjoy unlimited power to restrict the sale or transfer of a franchise – even though the franchise is actually being run by the small business owner who operates it.
- The legislation will allow franchise owners to sell or transfer their franchise to another individual, as long as that person is qualified under the corporation’s franchise standards.
- If a franchisee can identify another person to run the franchise that fulfills the prerequisites deemed by the franchisor to be qualified, they should be able to transfer or sell their business to them.
Protections from Non-Renewal of their Agreement
- When a small business owner decides to purchase a franchise opportunity it is for a set term. Typically these terms last 10 years. After investing, growing and operating that business in Florida at the end of the term there is no certainty that they will be renewed by their franchisor.
- This legislation will provide a small business owner the opportunity to renew the agreement and continue to operate their location in your local community.