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Bill passes Senate that would regulate franchise agreements

Brandon Moseley

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The Alabama state Senate passed a bill Thursday to regulate franchise agreements. Many businesses are locally owned and operated but are part of a national chain. Those contracts are generally written by the franchisor that owns the brand in their home state.

Senate Bill 129, the Protect Alabama Small Business Act, is sponsored by State Sen. Chris Elliott, R-Fairhope.

SB129 would regulate private franchise contracts by codifying them in to Alabama state law. In case of disagreement between the franchisor and franchisee, the case would have to be litigated in the Alabama Court system rather than in the state of the franchisor.

The House companion bill, HB352, is sponsored by State Rep. Connie Rowe, R-Jasper.

The Alabama business community is bitterly divided on this issue.

Dom Gentile owns Jan Pro franchises in Birmingham and Huntsville, but his contract is such that he controls the Alabama franchise rights and could franchise out to other cities in Alabama.

“I am a franchisee and a franchisor,” Gentile told the Alabama Political Reporter. “The franchise agreement allows the franchiser to protect the brand. I don’t want to sell franchises if I can’t protect the quality of the brand.”

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The Alabama Franchisee Association supports the legislation and argues that franchisees need protection from unjust terminations and non-renewals without good cause, protection from unjust restrictions on sales and transfers, protecting the franchisees’ rights to pursue legal dispute with their franchisor in an Alabama Court under Alabama law and requiring that franchisors and franchisees must act in good faith and in a commercially reasonable manner.

The International Franchise Association opposes the legislation.

“This legislation undermines the very key to franchising – a brand’s standards of safety, quality and operation. These brand standards signal to consumers they can expect the same safety, consistency and quality of a product or service regardless of the business location. By placing these brand standards at risk, SB129 and HB352 will actually hurt the majority of Alabama’s existing franchise small business owners and their customers.”

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This letter was signed by more than 80 franchise brands, including Hilton, Chicken Salad Chick, The UPS Store, and McDonald’s.

“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,” Elliott, who is sponsoring SB129. wrote. “It has been a ‘take it or leave it’ proposition, with franchisees having to take on more and more at each contract renewal.”

“I hope state legislators listen to all franchise owners and not just a disgruntled few, and vote against HB352, the ‘Protect Alabama Small Business Act.’ The only thing Alabama small business owners like me need to be protected from is this bill,” said Daniel Morgan, the owner of Express Pros in Birmingham.

“I recently met Darrel Bush, whose family had operated the Huddle House in Wetumpka for more than 25 years,” Elliott wrote. “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.”

“The legislation basically upends the franchise system,” said David Barr, the owner of 18 Alabama KFCs and Taco Bells. “If it passes, it will wrap small businesses in reams of red tape and fundamentally redefine the entire franchise model. Practices that have worked for decades will suddenly become illegal. In particular, there will be new restrictions on when – and whether – brands and small businesses can part ways. This is a huge payday for trial lawyers, who will be able to file bogus lawsuits to their heart’s content.”

The International Franchise Association points to economic analysis by FRANdata claiming that if this legislation is enacted, from 2019-2022 427 franchise businesses will not open, 4,500 jobs will not be created, and Alabama will lose $352.2 million in economic activity and that over the next 14 years, the trend: 1,141 franchise businesses will not open, 12,000 jobs will not be created, and Alabama will lose $942.1 million in economic activity — nearly a billion dollars taken from Alabama’s economy.

Gentile, a former Republican candidate for U.S. Senate, told APR that Republicans are supposed to be for small government and for less regulation.

There were 12,400 franchises operating in Alabama in 2018. 128,800 Alabamians work for a franchise, for a total 2018 payroll of $4 billion, which is up 5.4 percent from 2017. Franchises in Alabama have a total economic output of $10.2 billion. 76 percent of Alabamians have a favorable view of franchises.

SB129 was passed by the Senate on a 21 to 2 vote. It is now awaiting action by the Alabama House of Representatives.

It’s House companion bill, HB352, received a favorable report from the House Commerce and Small Business Committee. It is waiting for action by the full House of Representatives.

For coverage of the public hearing on this:

Committee considers legislation to regulate franchise agreements

Brandon Moseley is a senior reporter with eight and a half years at Alabama Political Reporter. You can email him at [email protected] or follow him on Facebook. Brandon is a native of Moody, Alabama, a graduate of Auburn University, and a seventh generation Alabamian.

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Alabama lawmaker pre-files legislation to allow removal of Confederate monuments

If passed, the measure would permit counties and cities to relocate historic monuments currently located on public property.

Brandon Moseley

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A Confederate monument in Birmingham's Linn Park was removed. As have monuments and memorials in Mobile and on the campus of the University of Alabama.

Alabama State Rep. Juandalynn Givan, D-Birmingham, introduced legislation this week in advance of the 2021 legislative session that, if passed, would permit counties and cities to relocate historic monuments currently located on public property. Givan’s bill, HB8, would also provide for the relocation of historic memorials to sites appropriate for public display.

“Across the state of Alabama, citizens are calling for the removal of prominently placed statues and monuments that are insensitive or offensive to the communities that surround them,” Givan said. “City and county governments must be able to address the demands of their citizens. This legislation provides a tool for local governments to safely remove these artifacts so that they can be moved to a site more appropriate for preserving or displaying the historical monument.”

Removing the monuments and historical markers is currently illegal under Alabama’s Memorial Preservation Act, which the state Legislature passed in 2017. Givan has been an outspoken opponent of that Republican-sponsored legislation. In 2018, Givan introduced a measure to repeal the bill that barred the removal of monuments.

“I believe HB8 can achieve bipartisan support,” Givan said. “My bill seeks to balance the wishes of the people. It respects the will of communities that want the monuments removed. It also respects those who wish to preserve history. With this legislation, Confederate monuments could be relocated to a public site, like Confederate Memorial Park, whose purpose and mission is to interpret and tell these stories. When the Legislature convenes, I hope to have the support of both the House of Representatives and the Senate.”

If enacted, HB8 would permit county and municipal governments to remove memorial monuments, including permanent statues, portraits and markers, located on public property in their jurisdictions. It would require a transfer of ownership of the removed monuments to the Alabama Department of Archives and History or the Alabama Historical Commission. Finally, the bill would instruct Archives and History or the Historical Commission to maintain and display monuments removed by local authorities in a location accessible for public display.

The Southern Poverty Law Center, which keeps track of Confederate monuments and memorials across the country, released an update to its Whose Heritage report, which tracks symbols of the Confederacy on public land across the United States. They report at least 30 Confederate symbols have been removed or relocated since George Floyd’s death on May 25, 2020.

These include 24 monuments removed, 5 monuments relocated and the Mississippi state flag replaced. Since the Charleston church shooting in 2015, 115 total symbols have been removed from public spaces. These include 87 monuments that have been removed or relocated from public spaces. At least 78 monuments were removed and nine were relocated.

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SPLC says there are still nearly 1,800 Confederate symbols on public land, and 739 of those symbols are monuments. The SPLC has prepared an “action guide” to help community activists target Confederate historical markers and memorials for removal.

President Donald Trump has denounced what he calls “cancel culture” that seeks to remove historical monuments and statutes.

“There is a growing danger that threatens every blessing our ancestors fought so hard for, struggled, they bled to secure,” Trump said. “Our nation is witnessing a merciless campaign to wipe out our history, defame our heroes, erase our values, and indoctrinate our children.”

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Marsh’s budget hearing compared to revenge porn

Bill Britt

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Senate President Pro Tem Del Marsh, R-Anniston, has scheduled a general fund budget hearing for early July — purportedly to prepare for the 2021 Legislative Session that begins in February.

But that is not the real reason for the budget hearing, according to Senate insiders who spoke on the condition of anonymity to avoid provoking Marsh. The actual purpose of public hearings, according to multiple sources, is to try to find a way to embarrass Gov. Kay Ivey.

In a press release from his office, Marsh says the budget meetings will focus on funding prison reform and rural broadband.

However, an agenda circulated for a July 9 budget committee meeting obtained by APR makes no mention of broadband and focuses entirely on the Ivey administration’s spending.

In the press release, Marsh said that the budget hearing is needed to address “a potential $2 billion-dollar prison reform proposal.”

But according to the Governor’s Office and published reports about Ivey’s prison reform plan, there is no mention of a $2 billion proposal as Marsh claims.

He also states that the other reason for the hearings is to address “a stunning lack of rural broadband investment.” However, broadband is not an item on the agenda.

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Marsh’s enmity toward Ivey was on full display in the days after the governor revealed his “Wish list” in May, to spend federal relief money on a variety of projects only vaguely related to the economic crisis caused by the COVID-19 pandemic.

According to those who regularly interact with the Senate, he is still angry that Ivey exposed his plan to appropriate nearly $1.9 billion in federal relief money to finance pet projects, which included spending $200 million on a new State House.

The money the state received under the CARES Act was to be allocated to shore up business, citizens’ interests and institutions ravage by the shutdown due to the spread of COVID-19.

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First, Marsh denied the existence of a “wish list,” then he said Ivey asked for it, and finally, he took ownership of the list and said he thought $200 million for a new State House is a “good idea.”

For weeks after the debacle, Marsh aided by some Senate Republicans tried to spin what happened without success.

Marsh had also wanted to use $800 million in CARES Act funds to build out rural broadband and had reportedly hoped to use the budget meeting to push his broadband plan forward.

Ivey blocked his plan to use CARES Act funds for pork projects and convinced the Legislature to reject Marsh’s preferred budget in favor of Ivey’s executive amendment.

“First Ivey made him look greedy and foolish and then she turned most of the Legislature against him,” said one of APR‘s sources.

Recently, Ivey was once again a step ahead of Marsh when just days after he announced his July budget hearings to consider broadband expansion, Ivey released her plan to spend $300 million on rural broadband, stealing his thunder.

According to APR‘s Senate sources, Ivey’s latest move was another blow to Marsh’s ego.

“Del, [Marsh] has power, but he’s never had to deal with a governor who knows how to counter him,” said another Senate insider.

Another regular observer of Marsh said, his latest move to hold budget hearings is akin to “revenge porn.”

“She dumped him, and now he wants to get even, sounds a lot like revenge porn to me,” the source said.

At the July hearing, Ivey Administration officials will be questioned on CARES Act spending, budgets for the department of corrections and pardons and parole.

Finance Director, Kelly Butler, will testify to what CARES funds have been spent and what remains.

ADOC Commissioner Jeff Dunn will be queried on several issues, including hiring, overtime pay, prison construction, and Holman prison’s status and personnel.

Pardons and Paroles Commissioner, Charles Graddick, will face the committee to discuss personnel costs, equipment purchases with an “emphasis upon computers, software, vehicles, office furniture and other substantial expenditures,” according to the document.

Lastly, the committee will question Personnel Department Director, Jackie Graham, to give an account for DOC and ABP&P personnel growth plans.

While it is wholly within the Legislature’s purview to approve and exercise oversight of government spending, this is not what the budget hearings are about according to APR’s sources.

According to several Senate insiders and others with knowledge of Marsh’s thinking, this is a move to paint Ivey’s administration as “out of control on spending.”

“This is a trap Marsh hopes to use for PR, but what if there’s nothing to see, how does he spin it,” asked an individual with close ties to the administration. “She’s kicked his tail before; she’ll likely do it again,” the source said.

 

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House

Senate pro tem requests general fund committee begin hearings in July

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Senate President Pro Tempore Del Marsh, R-Anniston, announced today that he has asked Senate Finance and Taxation General Fund Committee Chairman Greg Albritton, R-Range, to begin holding General Fund Committee meetings in preparation for the next session.

In an effort to be better prepared because of uncertainty in state revenue as a result of COVID-19 pandemic Senator Albritton has agreed with Senator Marsh and has invited Legislative Services, the Department of Finance, Pardons and Paroles, Corrections and the Personnel Department to provide updates to the committee.

“Typically, we begin this process closer to sessions however because of uncertainty about state income and possibility of special sessions, we felt like it was important to get started much earlier than usual in this process,” Senator Albritton said. “The Legislature has done an excellent job managing our budgets over the past few years. So much so that Alabama was able to weather the storm of the COVID-19 shutdown this year with little impact to our vital state services. We understand that we will not have final revenue projections until after July 15th, but we must continue to do our due diligence and ensure that we use taxpayer money sensibly.”

“We want to make sure that all public money is being used wisely, now and in the future,” Senator Marsh said. “We have many pressing issues facing the state such as a potential $2 billion-dollar prison reform proposal and a stunning lack of rural broadband investment which need to be addressed whenever the Legislature is back in session and it is our duty to make sure we are prepared and kept up to speed on these matters. Furthermore, the taxpayers deserve a clear and transparent view of how their money is being used.”

The hearings are scheduled to begin July 9 in the Alabama State House.

 

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Governor

Part-time employee in lieutenant governor’s office tests positive for COVID-19

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A part-time employee in Lieutenant Governor Will Ainsworth’s office, who the office said works only a handful of hours each week, tested positive for COVID-19 on Sunday, according to a press statement.

The employee, whose work area is separated from the rest of the staff, last worked in the office on the morning of Thursday, June 18.

All members of the office staff have been tested or are in the process of being tested for COVID-19 in response, and, thus far, no additional positive results have been reported.

In addition, the State House suite has been thoroughly cleaned and will remain closed until all employees’ test results have been returned.

Employees are working remotely from home, and phones are being answered in order to continue providing services to the citizens who need them.

 

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