We need a level playing field for franchise owners in Alabama
I knew it had happened to me, so I concluded it was happening to others.
I’m a small business owner, and for years I owned and operated small catastrophe-restoration franchises in Mobile and Baldwin Counties. If your home or store had fire or water damage, my team and I would come in and restore your shop or house.
It was hard work: there’s nothing clean or easy about ripping out walls that are rotting from mold, or painstakingly assessing the best way to remove fire-damaged cabinets while preserving the integrity of a kitchen’s interior. But it was rewarding, too: I was providing for my family, my team was giving great service to our customers and we were creating jobs.
Unfortunately, it turned out that my franchisor was not interested in the long-term success of my business. They were interested in corporate profits, regardless of how it impacted the small business owners who operated their franchises.
I wanted to believe that this inequity was limited to my particular franchisor, but, sadly, it is not.
I learned that Alabama is a state without a franchisee-protection law. Through contact with the Alabama Franchisee Association, I learned that scores of Alabama businesses — both small and large — have essentially no rights and no protections. It has been a “take it or leave it” proposition, with franchisees having to take on more and more at each contract renewal.
I recently met Darrel Bush, whose family had operated the Huddle House in Wetumpka for more than 25 years. As the years went by, unreasonably-priced building and equipment upgrades were added to the extensions of the original contract, and the Bush family had no choice but to agree to the franchisor’s demands in order to stay afloat. Ultimately, the Bush family had to shut down its franchise. Huddle House is now looking to construct a new location, just down the road from the one the Bush family operated for a quarter-century.
None of this is right. Thankfully, I’m out of the franchisee business now, but I’m taking a stand for Alabama business owners with the introduction of the Protect Alabama Small Businesses Act, co-sponsored by Representative Connie Rowe of Jasper, in the Alabama legislature.
The Protect Small Businesses Act will create the level playing field that small business owners – particularly, our small franchisee owners – desperately need.
The bill provides three things:
- Protection from unjust terminations and non-renewals without good cause. Franchisees should be compensated for fair market value for their investments.
- Protection from unjust restrictions on sales and transfers.
- Most importantly, the bill protects the right to sue in Alabama courts. Often, franchisors construct contracts that only allow for disputes to be settled in courts in New York City or Los Angles, where court costs and attorney’s fees are prohibitively expensive for small business owners in Alabama. If you’re 25 years old and working 80 hours a week to make your first Taco Bell franchisee profitable, you don’t have the time or money to battle Big Law hired-guns in a lower Manhattan courtroom, if a contract dispute arises.
I hope you will join me in protecting these Alabama family businesses, their employees, and our communities. Too many people have been harmed by one-sided agreements where the goalposts move quickly, and the deck is always stacked in favor of the large, out-of-state franchisors.
Chris Elliott represents Baldwin County in the Alabama State Senate, where he serves as Vice-Chairman of the Senate Committee on Governmental Affairs. Follow him on Twitter for legislative updates: @SenatorElliott