Dean Heyl
speaker
359 appearances
1 recordings
1 series
first heard May 2013
last heard May 2013
Dean Heyl’s voice in public audio — every appearance, attributed to the second.
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Appearances
and allowing for franchisees to sue franchisors on the basis of a good faith claim.
Now, on its surface, that sounds like a really good idea.
Who could be against good faith?
However, the problem that lies in this is that with a statutory definition, good faith, this isn't a fungible term that you can throw in there and just say, okay, we now have good faith.
The way this bill is written is
it would undermine the franchise agreement that exists between franchisees and franchisors.
And what would allow is any time a franchisee views that their franchise agreement's terms, even those terms that they've been agreed to, were outside what would be accepted as good faith, it gives them an opportunity to sue.
Now, the downside of this for franchisees is this.
You have a franchisor...
who believes a franchisee is not living up to the standards agreed to on a franchise agreement, that franchisor may be put into a position of saying, look, it's not worth the litigation cost for me to go to court on this potentially from the franchisee perspective because they're afraid of a franchisee lawsuit to enforce some of those standards.
Well, then what happens is the brand integrity begins to erode and
Because the franchisor, even though they believe they may be right, and they probably are in certain circumstances, they won't be able to enforce the brand integrity standards that are crucial for all franchisees.
And so that's why we're really concerned about Senate Bill 610.
Now, it passed the Senate, and when I say passed, it squeaked out of the Senate.
It came on a 22-12 vote.
It needed 21 votes to make it across.
Now...
The advantage that we have is that the assembly is an area that we are hoping that we'll be able to have a dual referral onto the committees, the Judiciary Committee and also the business and professions.
And even if we don't get that dual referral, we are still confident that the more the legislature learns about this bill, the more concerned they will be about it.
Now, you know, some folks said, well, it had bipartisan support.
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