In light of the ongoing discussions around California's SB 919 bill, we have a message to the legislature. We deeply appreciate your commitment to fostering a thriving franchise environment. We know that you have the best intentions for new business creation and franchisee protection in our state. However, we urge careful consideration of three key points. Firstly, the current bill risks exposing franchisees to serious privacy concerns, mandating the release of sensitive information to the public. Secondly, the requirement for real-time data disclosure imposes an impossible administrative burden, threatening the ability for franchise brokers to operate in California. Finally, the bill's treatment of changes in broker services and compensation as "material" complicates compliance without benefiting potential franchisees. Let's work together to refine SB 919 to protect franchisees, support business growth, and ensure the law is practical and effective. Thank you for your attention to these important matters. #franchisebrokersassociation #franchiseba #sabrinawall #franchiseindustry #businessindustry #franchisecommunity #franchisesupport #stayinformed #franchiseregulations #leadership #franchise #franchisor #franchisee #franchisealert #protectfranchising #californiaSB919 #SB919 #CA919 #brokerdisclosure #brokerdisclosurerule #california919 #franchiserule #franchiselaw #franchiseawareness #franchiselaws #californiabusiness #californiabroker #californiafranchisebroker
To be blunt (first time I've ever been blunt in a franchise conversation-ahem), the argument against more regulation from the broker side is that it's about franchise candidates not knowing (unless they have to), how much a broker makes for a successful match of would-be franchisee and a franchisor. That said, I like Sabrina a lot. I know she cares about the industry.
As both the CEO of Summa Franchise Consulting (supporting brands in every category) and a Franchisor of multiple brands across categories, I see 2 major challenges with the actual legislation as written. First, it would appear that any 'third-party seller' is going to have an additional (and probably substantial) burden under this legistlation. Second, this proposed legislation is exceptionally broad as to who a 'third-party seller' may be, if this becomes law. Clearly, we are all interested in eliminating unethical and illegal behavior in our industry. Personally, I have a lot of concerns about the manner that this is being approached and the way in which the bill has been written. I have heard that the FTC is considering this as the basis for a modified FTC rule to cover 'third-party sellers' which would be based on this proposed law. For those of you who do not have a copy of the current bill submitted by California State Senator Umberg, here is a link to the proposed legislation (provided by LegiScan): https://legiscan.com/CA/text/SB919/id/3012242
Managing Director at MSA Worldwide, Member IFA Board of Directors, Author, Lecturer, University Professor, Litigation Expert, Social Franchisor
4moThere is a review ongoing of changes to the FDD. I just want to understand - Are you suggesting that the FTC remove the information in item 20 that “risks exposing franchisees to serious privacy concerns, mandating the release of sensitive information to the public” by continuing to include the identical information you want to remove in future FDDs? Are you also suggesting that the amount of commission, possible continuing royalty and even equity participation might not impact a brokers recommendation to a prospective franchisee? Seriously, are you saying brokers are saints or are most of them normal humans? Exactly how does not having this information benefit prospective franchisees?