H.R. 4614: Franchisee Freedom Act

The proposed bill, known as the Franchisee Freedom Act, aims to enhance the rights of franchisees by providing a legal framework for them to seek damages if they experience harm due to violations of federal regulations pertaining to franchises. Below are the main components of the bill:

Private Right of Action

Under this bill, franchisees who are harmed by a franchisor's violation of specific federal franchise laws would have the right to take legal action against the franchisor. This includes the following provisions:

• Actual Damages: Franchisees can claim compensation for actual economic losses they suffered due to the violation.
• Equitable Relief: Courts may order additional remedies, which could include canceling or reversing contracts related to the franchise.
• Attorney Fees: Franchisees may also seek reimbursement for reasonable attorney fees and associated legal costs.

Jurisdiction and Venue

The bill specifies where legal actions can be filed. Franchisees can initiate lawsuits in:

• The U.S. District Court located in the district where the franchisee resides.
• A state court that has the proper authority in the state where the franchisee resides.

Right of Association

The bill prohibits franchisors from restricting their franchisees' rights to associate with one another. Specifically, franchisors cannot:

• Prevent franchisees from forming groups or organizations (trade associations).
• Retaliate against franchisees for their participation in such associations or for collaborating with other franchisees.

Overall, the Franchisee Freedom Act aims to strengthen the legal protections available to franchisees, enabling them to hold franchisors accountable for unfair practices and fostering cooperative relationships among franchisees.

Relevant Companies

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