New California Joint Liability Bill Will Destroy Local Franchised Restaurants

February 17, 2023

AB 1228 follows failed attempts to impose similar legislation on quick-service restaurants; will eliminate independent business ownership of impacted restaurants

WASHINGTON, Feb. 17, 2023 – The International Franchise Association (IFA) today released the following statement on the introduction of California HB 1228, the Fast-Food Franchisor Responsibility Act, legislation that would establish joint liability between California quick-service franchise brands and their independent franchisees.

“This bill will destroy tens of thousands of local restaurants by eliminating the equity they have built over decades of franchise small business ownership,” said Matthew Haller, IFA president and CEO. “The franchise business model has afforded millions of people the opportunity to pursue the American Dream, especially people of color, women, immigrants and other underrepresented communities. This bill will take away their independence and the livelihood they have dedicated to their business, their employees, and the people they serve – making them simply employees of their brand. Franchising is one of the greatest avenues for upward mobility, generational wealth creation, and first-time business ownership, which stands to all be taken away so organized labor can grow their ranks. 

“California voters have made it clear they don't want government meddling in the restaurants they frequent every day, raising prices and crushing jobs. Bipartisan majorities in the legislature already rejected this bill less than six months ago. There is no compelling case to justify why it is needed now.

“AB 1228 will close the door to opportunity and send aspiring entrepreneurs who want to open a business for themselves but not by themselves to another state. The International Franchise Association will not stop fighting to protect the thousands of small business owners, their employees, and their customers that California is trying to bring down.”

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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.