March 31, 2012

Notes on the History of Franchise Legislation

Every decade or so the United States sees attempts to
level the playing field for franchisees and franchisors. One
of the most interesting occurred in the early 1990s when
the State of Iowa passed legislation. McDonald's and a few
other large franchised brands stopped granting franchises 
or rewrites while the law was on the books. This was back
when McDonald's Operators thought opening new stores
was a good thing so a number actively helped McDonald's 
lobby against the bill.

It would be interesting to see franchisors try that tactic in a
populous state like California. However, with out-migration 
California may someday have the population of Iowa.


The primary opponent of any franchisee friendly legislation 
at Federal or State level is the IFA ( International Franchise 
Association.) In fact, this is the main reason for the IFA's 
existence. The big franchisor's lawyers and lobbyists work 
hand in hand to keep the playing field tilted in their direction.


Up until 1997 the IFA did not allow franchisees as members
but brought in a few for appearances and occasionally they'll 
let franchisee serve in a "leadership" role.

A McDonald's Operator currently serves as "chairman".

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