The Legal Issues That Could Change Franchising Forever
Franchising usually makes it into the mainstream press when Taco Bell jams a new snack chip into its burritos. But in the past year, franchising has been making front-page news for other reasons: Several issues that have been simmering for years came to a head, pitting franchisors against franchisees and labor advocates against both.
The results of those conflicts—and their ultimate consequences for franchising as a whole—aren’t at all clear, obscured by hyperbole, legalese and a lack of guidance from regulators. Whether these issues will reshape franchising for the better, as some argue, destroy franchising as we know it—or change nothing at all—remains to be seen. Whatever the case, the legal and political fights are worth watching.
The most publicized spat was the passage of California Senate Bill 610, commonly known as the fair franchising act, which, to a large degree, stemmed from a dispute between McDonald’s and a franchisee. Kathryn Slater-Carter and her husband, Ed, had operated two McDonald’s locations in Daly City, Calif., since 1983. In 2011, corporate headquarters notified them that the franchise agreement for their unit in the Serramonte Center mall would not be renewed upon its expiration in 2014, but that the company would continue the lease, enabling Slater-Carter
