California is known as the home of franchising. Recently, some businesses raised their concerns regarding the California Senate Bill 610 which was introduced by Senator Jackson on February 22, 2013. Also pertained to as “fair franchising”, it is intended to protect franchisees and to benefit employees as well.
While some are thankful for the government’s release of this bill, most businesses believe that the fair franchising bill is far from fair. This bill will lead to reduced product quality and damaged business brand, factors that will certainly hurt small businesses. As a result, business owners’ efforts and hard-earned money will go to waste.
We can see a lot of fast food chain owners revolting, but this legislation greatly affects the hotel industry, too.
The realization that this bill could limit expansion throughout the state is a proof that while it is intended to help business owners, its consequences do the opposite. Looking into the future, we see small businesses closing and owners leaving their future developments behind.
Small businesses are now begging the government to stick with the current franchise model. We can agree that the situation in the hospitality market is balanced and further changes are unnecessary. In fact, it has been helping small business hoteliers build their brand and strengthen the system. This is why we can observe that the occupancy rates of most hotels are increasing.
There are also businesses that are consistently not performing well. This bill will not allow these businesses to be removed from the market, and will thus have a negative impact on the industry and the state of California.