New Jersey 2024-2025 Regular Session

New Jersey Assembly Bill A3495

Introduced
2/5/24  
Refer
2/5/24  
Refer
2/22/24  

Caption

Concerns hospitality franchise agreements.

Impact

If enacted, A3495 would significantly reshape certain business dynamics within the hospitality industry, reinforcing franchisee rights and ensuring that they are protected from unilateral and potentially unfair decisions made by franchisors. The bill aims to facilitate a balance of power in franchise relationships by preventing franchisors from establishing competing outlets within exclusive territories, thereby safeguarding the market position of existing franchisees. Additionally, the emphasis on transparency promotes fair market competition, which might encourage more businesses to consider entering the franchise sector under these newly defined protective guidelines.

Summary

Assembly Bill A3495 focuses on hospitality franchise agreements in New Jersey, aiming to amend the existing Franchise Practices Act. The key provisions emphasize ensuring fair practices within the franchise system, especially concerning transparency in fees and the relationship between franchisors and franchisees. This legislation outlines obligations for franchisors regarding the disclosure of fees, prohibiting them from unreasonably imposing fees or changes on franchisees without adequate communication and approvals from a franchisee advisory committee. Furthermore, the bill affirms the rights of franchisees, especially concerning their operational territories and the quality of goods and services supplied.

Sentiment

The sentiment surrounding A3495 appears largely supportive among franchisee advocates and some legislators, who view the bill as crucial for protecting the rights and interests of franchisees. However, concerns have been raised by some franchisors regarding the potential limitations the bill may impose on their operational flexibility and ability to manage their franchise networks. This has led to a dialogue about the necessity of safeguarding franchisees while balancing the needs and rights of franchisors in the competitive hospitality market.

Contention

Notable points of contention center on specific provisions related to the disclosure of fees and the authority of the franchisee advisory committee. Franchisors express fears that stringent transparency requirements could hinder their operational efficiency and ability to innovate within the franchise model. Additionally, the definition of what constitutes reasonable changes to franchise agreements is a potential area for dispute, with franchisors seeking more leeway versus franchisees advocating for strict adherence to disclosure and fair treatment regulations.

Companion Bills

NJ S2336

Same As Concerns hospitality franchise agreements.

NJ S3165

Carry Over Concerns hospitality franchise agreements.

Previously Filed As

NJ A1958

Concerns hospitality franchise agreements.

NJ S2336

Concerns hospitality franchise agreements.

NJ S3165

Concerns hospitality franchise agreements.

NJ A2752

Revises law concerning the rights and responsibilities of motor vehicle franchisees and franchisors.

NJ A1288

Revises law concerning the rights and responsibilities of motor vehicle franchisees and franchisors.

NJ A4380

Establishes "Motor Vehicle Open Recall Notice and Fair Compensation Act"; revises motor vehicle franchise agreements.

NJ A1064

Prohibits no-poaching agreements in franchise arrangements.

NJ A1387

Prohibits no-poaching agreements in franchise arrangements.

NJ S3309

Establishes "Motor Vehicle Open Recall Notice and Fair Compensation Act"; revises motor vehicle franchise agreements.

NJ S207

Revises "Franchise Practices Act."

Similar Bills

NJ A1958

Concerns hospitality franchise agreements.

NJ S2336

Concerns hospitality franchise agreements.

NJ S3165

Concerns hospitality franchise agreements.

AZ HB2775

Franchises; relationships; definitions

AZ HB2404

Franchises; regulation

MO SB587

Modifies provisions relating to compensation of vehicle franchisees upon termination of a franchise

MO SB1358

Modifies provisions relating to vehicle dealers

UT SB0090

Automobile Franchise Amendments