It’s safe to say that a large part of Florida’s thriving economy is fueled by franchised businesses, which provide some of our most common services — fast food, auto repairs, haircuts, and so on. Without committed business owners, who take on the responsibility of growing small local businesses associated with big national chains, we would miss out on countless staples of everyday life.
Even though their business signs carry the names of global brands, they are actually local operations owned by friends and neighbors who have invested their time and money in pursuit of their dreams. They operate in good faith in cooperation with the national brands, yet they’re not always treated with the same kind of good faith in return.
To operate a franchise business, owners devote hundreds of thousands of dollars on the franchise agreement, equipment and supplies, employees, advertising, and so much more. Right now, Florida provides few legal safeguards for the small-business men and businesswomen who choose to invest their hard-earned personal resources in a franchise business opportunity. I hope to change that.
Through my position as a member of the Florida Legislature, I have filed legislation promoting fair business relations between franchisors and franchisees, which will ultimately result in new business development and job creation for our state. The Small Business Parity Act is designed to help achieve a more level playing field for those who invest their personal time, money, and energy to build local businesses. It will bring important new reforms to the 40,000 small franchise operations in Florida who provide more than 400,000 jobs for our state’s residents.
Currently, a corporation can terminate its franchise agreement — and effectively drive the operator out of business — with the snap of a finger. They don’t even need to have a valid cause. They can do it simply because it’s better for them, regardless of the consequences on the hometown business owner. That is grossly unfair and imposes a tremendous burden on a well-intended entrepreneur. My legislation would help these franchise owners protect their growing businesses, providing a more even balance in the franchise relationship.
Along with providing this balance, the legislation has numerous provisions to ensure that local Florida businesses are treated fairly. It would stop a corporation from refusing to renew a franchise agreement unless the operator fails to substantially comply with the franchise agreement; it allows operators to sell or transfer their franchise to a qualified person; and it permits Florida franchise operators the right to pursue legal disputes with their franchisor in a Florida court and under Florida law.
My proposed legislation defends small-business owners and their dreams, without burdening the large corporations when they act in good faith. These are common-sense approaches that embody reasonable business practices. Florida business owners should be able to safeguard their investment and their livelihood. We may not notice the work put into these businesses behind the scenes, but we should step to the front now to shield them and their ability to continue providing jobs and fueling Florida’s economy.
Almost half of all states in the country have enacted similar measures to balance the partnership between small-business owners and their corporate brands. Florida should join the growing list of states doing the right thing by passing the Small Business Parity Act.
Florida state Rep. Heather Fitzenhagen is a Republican representing the Fort Myers area. She is sponsoring HB 1219, the Small Business Parity Act.