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Franchise Advocates Challenge Rhode Island Law, March 19 Grassroots Rally in Providence

WASHINGTON, D.C., March 13 – In an effort to defend the franchising industry and its importance to the Rhode Island economy, the International Franchise Association plans to rally the business community March 19 in support of Sen. Daniel P. Connors’ legislation which was introduced to mitigate an anti-franchising measure passed last year. 

“Rhode Island Franchising Day,” a grassroots lobbying event designed to engage local franchised-business owners and advocates in voicing concerns over the Rhode Island Fair Dealership Act, will focus its efforts on educating lawmakers to the necessity of amending the law by passing Connors’ bill.  The event will be conducted at the Greater Providence Chamber of Commerce and include prearranged meetings with legislators at the state house.  Accompanying House language is also expected to be debated this session.

Enacted last year, the act undermines the ability of franchise systems to enforce uniform standards thereby harming companies’ brands, the association said, in addition to increasing litigation over the contractual relationship and termination procedures between franchisors and franchisees, which could result in over-regulation and damage to the Rhode Island economy.  The economic output due to the more than 3,000 franchises operating in Rhode Island is $6.6 billion.  Those establishments also provide nearly 65,000 jobs.

Connors’ bill, S 2592 strikes a number of items from the act, such as the narrow definition of “good cause,” termination and arbitration clauses, and adds language about the repurchase of goods.

The IFA was founded nearly 50 years ago and is the world’s largest trade association formed to promote, enhance, and safeguard the franchising industry from over-regulation.  In the United States, franchised-small businesses are responsible for providing jobs for more than 21 million Americans and contributing more than $2.3 trillion annually to the U.S. economy according a 2008 IFA Educational Foundation study conducted by PricewaterhouseCoopers.

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