3.0.0 470 2023-01-11T13:34:25Z 2023-01-11T13:34:25Z House HR 2017-01-12 115 [Congressional Record Volume 163, Number 8 (Thursday, January 12, 2017)]From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]By Mr. ELLISON:H.R. 470.Congresshas the power to enact this legislation pursuantto the following:Article I, Section 8, Clause 1 and 3.[Page H472]]]> hsju00 Judiciary Committee House Standing hsju10 Constitution and Limited Government Subcommittee Referred to 2017-02-06T22:34:28Z Referred to 2017-01-12T15:02:50Z 2017-02-06 hsju10 Constitution and Limited Government Subcommittee 1 House committee actions Referred to the Subcommittee on the Constitution and Civil Justice. Committee 2017-01-12 Referred to the House Committee on the Judiciary. IntroReferral H11100 2 House floor actions hsju00 Judiciary Committee 2017-01-12 Introduced in House IntroReferral Intro-H 9 Library of Congress 2017-01-12 Introduced in House IntroReferral 1000 9 Library of Congress E000288 Rep. Ellison, Keith [D-MN-5] Keith Ellison D MN 5 N H001068 Rep. Huffman, Jared [D-CA-2] Jared Huffman D CA 2 2017-01-12 True C000714 Rep. Conyers, John, Jr. [D-MI-13] JOHN CONYERS D MI 13 2017-01-12 True M001143 Rep. McCollum, Betty [D-MN-4] BETTY MCCOLLUM D MN 4 2017-01-12 True Commerce Business ethics Business records Civil actions and liability Contracts and agency Fraud offenses and financial crimes Government information and archives Retail and wholesale trades Service industries Small business State and local government operations Commerce 00 2017-01-12 Introduced in House 2017-03-01T20:38:36Z Fair Franchise Act of 2017

This bill prohibits any franchise seller, in connection with any disclosure document, notice, or report required by any federal, state, or local law, from making an untrue statement of material fact or failing to state a material fact or any other fact that would render any required statement or disclosure either untrue or misleading.

A franchise seller is also prohibited from failing to furnish any prospective franchisee with:

  • all information required to be disclosed by law;
  • a written statement on whether the franchise agreement involved contains a right to renew it; and
  • certain historical financial performance data in the disclosure document.

Nor may a franchise seller make any oral or written claim or representation to a prospective franchisee that is inconsistent with, or that contradicts, the disclosure document.

A franchisor or subfranchisor, in connection with the performance, enforcement, renewal, or termination of any franchise agreement, must not:

  • engage in any act or pattern of conduct that operates as a fraud upon any person;
  • hinder, prohibit, or penalize the free association of franchisees for any lawful purpose;
  • discriminate against a franchisee by imposing requirements not imposed on other similarly situated franchisees or otherwise retaliate against any franchisee for membership or participation in a franchisee association;
  • charge excessive and unreasonable renewal fees;
  • enforce a provision in a franchise agreement requiring the parties to submit to arbitration unless certain conditions are met;
  • terminate, cancel, or fail to renew a franchise for failure or refusal of the franchisee because it failed or refused to perform specified activities;
  • restrict a franchisee from associating with other franchisees or from joining, leading, or otherwise participating in a trade or other association;
  • require or prohibit any change in management of any franchise except for good cause; or
  • impose on a franchisee a standard of conduct or performance unless the franchisor sustains the burden of proving the standard to be reasonable, necessary, and uniformly enforced.

This bill specifies requirements concerning minimum standards of conduct (good faith and due care) for each party to a franchise agreement. The bill also prohibits:

  • requiring inclusion in a franchise agreement of a term or condition which violates this bill or relieves a person from a duty or liability under it, or
  • any waiver of compliance with this bill.

A franchisee may assign a franchise interest to a transferee, provided the transferee satisfies reasonable qualifications applied by the franchisor in the offer and sale of franchises.

The bill also:

  • requires specified renewal, termination, and transfer protection for franchisees;
  • specifies requirements concerning legal actions brought by franchisees injured or damaged by violations of this bill; and
  • authorizes legal actions by state attorneys general on behalf of state residents for alleged violation of it.
]]> Fair Franchise Act of 2017 Display Title Fair Franchise Act of 2017 Official Title as Introduced To establish minimum standards of fair conduct in franchise sales and franchise business relationships, and for other purposes. Introduced in House IH Short Titles as Introduced Fair Franchise Act of 2017 Introduced in House 2017-01-12T05:00:00Z https://www.govinfo.gov/content/pkg/BILLS-115hr470ih/xml/BILLS-115hr470ih.xml 2017-02-06 Referred to the Subcommittee on the Constitution and Civil Justice. text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain. Congressional Research Service, Library of Congress This file contains bill summaries and statuses for federal legislation. A bill summary describes the most significant provisions of a piece of legislation and details the effects the legislative text may have on current law and federal programs. Bill summaries are authored by the Congressional Research Service (CRS) of the Library of Congress. As stated in Public Law 91-510 (2 USC 166 (d)(6)), one of the duties of CRS is "to prepare summaries and digests of bills and resolutions of a public general nature introduced in the Senate or House of Representatives". For more information, refer to the User Guide that accompanies this file.