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Potential Legislation Shifts Touch Franchising Industry

Two current legislation proposals making headway that would affect the franchise industry involve one state and the entire nation.  Senate Bill 610 involving the state of California and The Border Security, Economic Opportunity, and Immigration Modernization Act of 2013 both serve to alter key aspects of operation for franchisors and franchisees alike.

Though still underway, the Senate Bill has passed state senate votes 5 to 2, and is focused on influencing the dynamic of franchisor-franchisee agreements.  Reinforcing good faith and fair dealings obligations between franchisors and franchisees is considered the primary aim of the bill, particularly concerning issues such as how royalty fees are managed and agreements pertaining to them, along with other aspects such as one-sided agreements that favor franchisor benefits, and remedies for violations that could protect franchise partners.  The bill is said to support franchisee participation in franchise systems as well as their ability to take legal action should they feel that good faith has not been respected.

The immigration reform bill affects franchising in a different way.  The bill would set out to amend immigration laws concerning legal work status throughout the U.S. with a focus on verifying the status of workers.  Verification programs through the bill’s approval would require employers to screen applicants to a greater extent as well as enable the hiring of foreign workers for certain jobs only when they have not already been filled by U.S. citizen workers.  Immigration reform in a greater sense is also part of the bill, concerning border security and identity theft matters.

Franchise industry sectors across the board would be involved in the effects of either bill, within California and nationwide where employers are concerned.  The focus on employment processes, including visa verification and allotment requirements (such as a limited number of guest-worker visas available to employers) are the primarily affecting aspects of the nationwide immigration reform bill which will affect businesses of various kinds, including franchise industry operators hiring on small or wider scales.

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