HB134 Alabama 2019 Session

Summary

Primary Sponsor

Andrew Sorrell Auditor

Republican

Session

Regular Session 2019

Title

Protect Alabama Small Businesses Act, regulation of franchisers and representatives in effort to prevent fraud, unfair business practices and abuses on franchisees, penalties

Description

This bill creates the Protect Alabama Small Businesses Act.

This bill would regulate the conduct of franchisors and their representatives in an effort to prevent fraud, unfair business practices, unfair methods of competition, impositions, and other abuses upon franchisees in the state.

This bill would address requirements for the sale, transfer, or assignment of franchises, and for the mandatory repurchase by a franchisor of a franchise or an interest in a franchise, and for the repurchase of certain assets, including inventory, supplies, equipment, goodwill, and furnishings, upon termination, nonrenewal, or expiration of a franchise, except where the termination or nonrenewal is for good cause.

This bill would require the compensation of a franchisee for the fair market value of the business upon termination or nonrenewal without good cause by the franchisor of the franchise.

This bill would provide that all franchise agreements are subject to this act.

Amendment 621 of the Constitution of Alabama of 1901, now appearing as Section 111.05 of the Official Recompilation of the Constitution of Alabama of 1901, as amended, prohibits a general law whose purpose or effect would be to require a new or increased expenditure of local funds from becoming effective with regard to a local governmental entity without enactment by a 2/3 vote unless: it comes within one of a number of specified exceptions; it is approved by the affected entity; or the Legislature appropriates funds, or provides a local source of revenue, to the entity for the purpose.

The purpose or effect of this bill would be to require a new or increased expenditure of local funds within the meaning of the amendment. However, the bill does not require approval of a local governmental entity or enactment by a 2/3 vote to become effective because it comes within one of the specified exceptions contained in the amendment.

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Subjects

Small Business