The Florida senate is putting forth a bill to limit franchisor ability to renew, terminate, or refuse franchisee transfer. The bill written by Senator Latvala purposes, per the bill, to create laws, unless under good cause and/or certain circumstances and notice, prohibiting franchisors from:
- terminating a franchise
- refusing to renew a franchise
- denying ownership of a franchise after the death of the franchisee
- preventing a franchisee from selling or transferring a franchise, assets of the franchise business, or an interest in the franchisee
- intentionally misrepresenting or failing to disclose specified information;
The bill being considered in for Florida is not unique. Many states have laws regarding the termination, renewal, and transfer of the franchise.
The law carries some teeth providing that violations constitute a misdemeanor of the second degree; providing penalties; providing that a person may be awarded certain damages, attorney fees, and other costs under specified circumstances; providing that certain actions are deemed unfair and deceptive; authorizing the Department of Legal Affairs by itself or jointly with the Department of Agriculture and Consumer Services to sue a franchisor on behalf of certain persons for specified violations.
The bill also provides remedies for a franchisee or an aggrieved or injured person under certain circumstances; authorizes punitive damages under certain circumstances; authorizes the Department of Legal Affairs or the state attorney to bring an action for injunctive relief or other civil relief under certain circumstances; and clarifies that specified remedies are in addition to existing remedies.
This bill is not law and will not be law until and unless enacted. However, this highlights the need to review state laws prior to not renewing, terminating, or denying franchisee transfers. As mentioned, many states already have laws regarding renewal, termination, and franchisee transfers.