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PODCAST: California State Senate Debate on SB610 Franchise Bill

SACRAMENTO—Late yesterday afternoon California's state senate voted 23 to 9 in favor of Senate Bill 610. The franchise protection bill now moves on to Governor Jerry Brown's office.

The debate over the bill was one in which numerous state senators stood up to be counted. Republicans tended to favor arguments of the International Franchise Association while the state's Democrats tended to champion small business franchisee points.

California state senators debate on Good Faith in Franchising SB610

Senator Hannah-Beth Jackson1. Sen. Hannah-Beth Jackson (D-Santa Barbara). Favor.
"Current law allows franchisors to put franchisees out of business for even the most minor violations of the franchisor’s operating manual. Operating manuals can be unilaterally altered by the franchisor during the term of the contract, allowing franchisors to effectively rewrite the terms of the contract."

2. Sen. Mike Morrell (R-Palm Desert). Oppose
"SB610 violates basic property rights...The franchisor owns the property. The franchisee is granted the privilege of operating a business under his tent...This bill weakens contracts and the rule of law..."
Richard Roth3. Sen. Richard Roth (D-Riverside). Favor.
"Why shouldn't there be a reasonable limitation on the ability of a franchisor to terminate a franchisee?... Is there anything unfair about merely requiring that a small business owner, a franchisee, have materially breached the franchise agreement before his or her franchise is terminated and he or she loses his or her life savings?"
California State Senator Ted Gaines4. Ted Gaines (R-Redding). Oppose.
"I supported it initially in the senate but now am in opposition... There doesn't seem to be clarity from franchisees in terms of whether we need this legislation... There doesn't seem to be a definition of 'material and substantial breach,' which I concluded would actually cause more litigation, not less."
Senator Darrell Steinberg (D-Sacramento)5. Sen. Darrell Steinberg (D-Sacramento). Favor.
"The bill itself is narrower than when it came through the first time. There's no reason to change your vote... The term 'substantial and material breach' is in fact the doctrine of contract law."
 
6. Sen. Hannah-Beth Jackson concludes.

By clicking on the arrow below, you can listen to the 23 minute session of senators debating the bill on the senate floor. (You must have JavaScript to see the arrow and play the audio stream. Apple's iOS cannot see it.) You can also download the mp3 file to listen to it as a Podcast.

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