Georgia General Assembly Unanimously Approves Law Codifying Franchise Relationships as Contractual Business Relationships
FOR IMMEDIATE RELEASE
GEORGIA GENERAL ASSEMBLY UNANIMOUSLY APPROVES LAW CODIFYING FRANCHISE RELATIONSHIPS AS CONTRACTUAL BUSINESS RELATIONSHIPS
WASHINGTON, April 2, 2012 – The International Franchise Association today applauded the Georgia General Assembly for unanimously passing IFA-backed legislation that codifies franchisee/franchisor relationships as contractual business relationships, saying the bill represents a landmark decision for other states to follow to improve the business environment for franchising.
"We applaud Georgia legislators for being the first state to formally recognize that the franchisee/franchisor relationship represents a contractual business relationship, not an employment relationship," said IFA Senior Vice President of Government Relations & Public Policy Judith Thorman. "As a result of this law, franchising will continue to thrive as a growing economic force in the Georgia economy across many business lines including restaurants, hotels, automotive, health care, business and personal services, and real estate, among other business sectors."
Upon the Governor's signature of the bill, Georgia will be the first state in the country to adopt such a law. State Senator Tim Golden and Assemblyman Chuck Martin were the cosponsors of HB 548, which unanimously passed the Senate on March 26 and the House on Feb. 28.
"IFA will continue to educate lawmakers in other states about the importance of clarifying state franchise laws regarding the independent contractor status of franchisees, given the huge economic impact of franchising to local economies," said Thorman.
The legislation is a result of IFA's ongoing work with the American Legislative Exchange Council (ALEC), which recently adopted as official policy a Resolution on the Misapplication of Employee Classification Laws, recognizing that business format franchising is a major contributor to the United States economy and that franchising is a contractual business relationship, not akin to an employment relationship.
Noting the tremendous positive effect business format franchising has on the U.S. economy, ALEC passed the resolution, which was the basis for Georgia HB 548. The ALEC resolution states that any "legislation or regulations which would improperly classify franchisees as 'employees' is a misinterpretation of labor and contract policy and deprives franchise investors of valuable economic opportunities."
About the International Franchise Association
The International Franchise Association is the world's oldest and largest organization representing franchising worldwide. Celebrating over 50 years of excellence, education and advocacy, IFA works through its government relations and public policy, media relations and educational programs to protect, enhance and promote franchising. Through its media awareness campaign highlighting the theme, Franchising: Building Local Businesses, One Opportunity at a Time, IFA promotes the economic impact of the more than 825,000 franchise establishments, which support nearly 18 million jobs and $2.1 trillion of economic output for the U.S. economy. IFA members include franchise companies in over 300 different business format categories, individual franchisees and companies that support the industry in marketing, law and business development.