SB129 Alabama 2019 Session

Updated Feb 26, 2026

High Interest

Summary

Primary Sponsor: Chris ElliottSenator
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: SB 129 creates the Protect Alabama Small Businesses Act to regulate franchisors and protect franchisees from unfair treatment, including required repurchase and fair market value payments when a franchise ends without good cause.
What This Bill Does
It sets rules for how franchisors and their representatives must conduct business with franchisees, including preventing fraud and unfair practices. It requires franchisors to repurchase a franchise's assets—including inventory, equipment, and goodwill—at fair market value if a franchise ends without good cause, and to allow a continuation of business by waiving noncompete obligations. It also governs sale, transfer, and assignment of franchises, sets standards for consent and approval, provides remedies and damages for violations, and keeps Alabama law as the governing forum for these franchise relationships.

Who It Affects
Franchisees in Alabama who would gain protections against unfair termination, receive fair market value repurchase, and have clearer transfer rights.
Franchisors and their representatives who must follow the new rules, may face new duties and potential penalties for noncompliance.

Key Provisions
Prohibits termination or nonrenewal of a franchise without good cause and provides a 90-day cure period for noncompliance (with exceptions).
Requires the franchisor to repurchase inventory, supplies, goods, fixtures, equipment, and furnishings at fair market value upon termination/nonrenewal/expiration without good cause, and to either purchase goodwill or waive noncompete to allow the franchisee to continue in business.
Mandates fair market value determinations via mutual appraiser; if unresolved, court appointment; damages and possible punitive damages for violations; declaratory judgments allowed.
Governs transfer: franchisor may not unreasonably withhold consent; transfers must be approved within 60 days or deemed approved; non-discriminatory qualifications required for purchasers.
Prohibits certain practices by franchisors (e.g., misrepresentation, coercive waivers, anti-union restrictions, improper use of vendor rebates) and requires good faith and disclosure; prohibits choice-of-law provisions to force out-of-state laws; arbitration permitted if standards are met.
Applies to all franchise agreements and related contracts in Alabama; does not preempt certain other acts; effective immediately upon passage.

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