IFA Successfully Lobbies Rhode Island to Change Franchise Law

Blue MauMau:

The International Franchise Association has been successful in its attempts to water-down the Rhode Island Fair Dealership Act that was enacted in May of last year to protect franchise owners from problem franchisors. State Senator Daniel Connors (D) sponsored and helped the amendedments pass both chambers. The new act is expected to be signed by Governor Donald Carcieri (R) later this week.

The Rhode Island Fair Dealership Act (pdf), the first state law of its kind since Iowa passed a fair franchise law in 1992, has several sections that the IFA targeted to change. Franchisors had been required to provide Rhode Island franchisees and dealers (a type of franchise owner) with a 90 days written notice before termination, cancellation or non-renewal of a franchise license and at least 60 days to cure or fix non-conformance to a franchise’s (dealership’s) operating standards unless it is a health problem in which the franchise owner or dealer has only 24 hours to cure it.

The new amendment (pdf) that the IFA pushed shows such state requirements completely crossed out. However, according to the IFA Insider newsletter, the law will now require “60 days written notice for termination, cancellation or non-renewal” of a franchise agreement and 30 days in which to cure any non-conformance issues. That is whittled down 30 days.

Despite lobbying efforts and the successful passing of the amendment, the Rhode Island Dealership Act has remained largely intact.

David French, Vice President of Government Relations for the IFA told Blue MauMau, “The amendment has been passed by the House and Senate. We are getting the bill ready for the governor’s signature. I expect it to be on the glide path to completion within the next four or five days.”