CA Passes Nation’s Toughest Franchise Law

On Jan. 1 the nation’s toughest franchisee-protection law will go into effect, says a post from Davis Wright Tremain. Under the amended California Franchise Relations Act (CFRA), there are a number of significant changes. Among them: most terminations will require the franchisor to meet a “good cause” standard and allow the franchisee at least 60 days to cure the breach, as opposed to the current 30 days. The bill introduces the word “substantially” into a crucial definition, the writers note, and as a result California franchisees “may feel empowered to challenge terminations to test the boundaries of substantial compliance in court.” The bill passed thanks to an alliance of some strange bedfellows, they add. It was heavily lobbied by a group normally at odds with franchisees: the Service Employees International Union (SEIU).