Schakowsky Introduces Legislation to Empower Franchise Owners

February 1, 2022
Press Release

WASHINGTON— Today, Congresswoman Jan Schakowsky (D-IL), a Senior Chief Deputy Whip and Chair of the Consumer Protection and Commerce Subcommittee of the House Energy and Commerce Committee, introduced the Franchisee Freedom Act. This legislation ensures that small business owners who enter into franchise agreements with big corporations will be afforded the opportunity to address claims against the franchisor, putting them on a level playing field.

Congresswoman Schakowsky stated, ”When many try to create their own American dream, they turn to franchisors as partners in their journey. Unfortunately, due to a weak rule and weaker enforcement of The Federal Trade Commission’s Franchise Rule that dream often turns into a nightmare, one in which they’re under the thumb of a predatory corporation, the franchisors. That’s why franchisees need this legislation, which provides small business owners harmed by violations of the Franchise Rule with the means to recover for the harm done.”

Several organizations voiced their support for this legislation:

“To put it simply, it’s time that bad actors in the industry be held accountable for FTC Franchise Rule violations, and for franchise buyers to have the right to take action and be made whole. I applaud Chair Schakowsky for introducing this critical legislation to ensure an even playing field and protect small business,” said Keith R. Miller, Principal, Franchisee Advocacy Consulting.

“In these trying times small business owners need help and a more level playing field in the franchisee/franchisor relationship. Let’s make small business a priority and give them the option of a private right of action. Thank you, Chair Schakowsky, for introducing this important legislation,” added Bharat Patel, Treasurer, Asian American Hotel Owners Association.

“Franchisees, who frequently make ‘bet the farm’ investments based upon false representations, have not been afforded a private right to redress claims, while Securities investors have enjoyed a private right of action under Federal securities law to address claims for almost ninety years. I am grateful to Chair Schakowsky for seeing this imbalance and introducing this important legislation,” stated Robert L. Purvin, Jr., Chair and CEO, American Association of Franchisees & Dealers.

A copy of the legislation is available HERE.