International Franchise Association Urges Arizona Legislature to Oppose Harmful Franchising Legislation

February 23, 2023

HB 2404 will expand regulation on small businesses, close the door to franchise opportunities in Arizona, and insert the state into private contracts

WASHINGTON, DC/PHOENIX – The International Franchise Association (IFA) today sent a letter to Arizona Speaker of the House Ben Toma and members of the Arizona legislature urging their opposition to HB 2404, legislation that “would create the most onerous franchise law anywhere in the United States,” harming Arizona’s 19,000 franchised businesses and any future franchise opportunity.

Jeff Hanscom, IFA Vice President of State and Local Government Relations and Counsel, writes:

“Arizona currently ranks the third best state in the country for franchising. This measure would harm Arizona’s 19,000 franchise establishments, which generate nearly $20 billion in economic output and employ over 203,000 Arizona residents. As a result of HB 2404, FRANdata estimates Arizona franchise growth would drop from a current rate of 2.2% per year to 1% growth each year, eliminating approximately 136 new Arizona small businesses from ever opening and nearly 1,500 jobs from being created in the franchise sector.”

Hanscom highlights how the legislation would:

  • Undermine current franchise contracts and promote costly litigation between franchisees and franchisors.
  • Result in unsafe and products and services for consumers and workers in Arizona.
  • Insert the state of Arizona as a third party in private contracts by adding a first of its kind provision that creates a private right of action under the Federal Trade Commission Franchise Rule.
  • Cause uneven quality and brand standards – the hallmark of franchising – resulting in fewer loyal customers and shrinking opportunities for new business ventures.
  • Lead to less future development of new franchise locations in Arizona due to the significant risk associated with a regulatory environment.

Read the full letter here.

# # #


About the International Franchise Association:

Celebrating over 60 years of excellence, education, and advocacy, the International Franchise Association (IFA) is the world’s oldest and largest organization representing franchising worldwide. IFA works through its government relations and public policy, media relations, and educational programs to protect, enhance and promote franchising and the approximately 790,492 franchise establishments that support nearly 8.4 million direct jobs, $825.4 billion of economic output for the U.S. economy, and almost 3 percent of the Gross Domestic Product (GDP). IFA members include franchise companies in over 300 different business format categories, individual franchisees, and companies that support the industry in marketing, law, technology, and business development.


Press Contact

Name: Katherine Knight Patterson