HB352 Alabama 2019 Session

Summary

Primary Sponsor

Connie C. Rowe

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

Summary

HB 352 establishes the Protect Alabama Small Businesses Act to regulate franchisors and protect franchisees in Alabama, including termination, transfer, and fair-value repurchase rules.

What This Bill Does

It regulates franchisors and their representatives to curb fraud, unfair practices, and abuses against franchisees. It requires the franchisor to repurchase the franchise and related assets at fair market value if the franchise ends without good cause, and it allows addressing goodwill and noncompete obligations. It tightens transfer rules, allowing spouses, heirs, or buyers who meet reasonable qualifications to take over, with a defined timeline for approval. It establishes penalties and remedies for violations, including damages, attorney fees, injunctions, and possible punitive damages, and makes all franchise agreements subject to the act.

Who It Affects

• Franchisees: protected from unfair termination, entitled to fair market value repurchase of the business and assets after termination/nonrenewal without good cause, and easier transfer options under stricter rules.
• Franchisors: must comply with new obligations (repurchase requirements, transfer approvals, good-faith dealings) and may face damages, attorney fees, injunctions, and other penalties for violations.

Key Provisions

• Creates the Protect Alabama Small Businesses Act to regulate franchisors and protect franchisees.
• Requires franchisors to repurchase inventory, supplies, goods, fixtures, equipment, and furnishings at fair market value upon termination or nonrenewal without good cause, and to address goodwill or waive noncompete obligations so the franchisee can continue in business.
• Prohibits termination or nonrenewal without good cause, requires a cure period (minimum 90 days) after notice of noncompliance, and allows immediate termination for specified events (insolvency, prolonged nonoperation, legal violations, etc.).
• Provides transfer protections, allowing the spouse, heirs, or estate to participate in ownership, and requiring franchisors to approve transfers to qualified new owners within a set timeframe.
• All franchise agreements are subject to the act; prohibits certain unfair practices (misrepresentation, deceptive acts, vendor kickbacks, unreasonable noncompete terms, etc.) and sets remedies including damages, attorney fees, injunctions, and potential punitive damages.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Small Business