Americans for Tax Reform is opposing the Protect Alabama Small Business Act.
Senate Bill 129 would regulate the relationships between franchisors and their Alabama franchisees.
ATR sent a letter to members of the Alabama House of Representatives urging legislators to oppose Senate Bill 129 and its House companion bill HB352. ATR argues in the letter that SB 129 would increase regulation and economic costs in the state.
The Alabama Senate passed Senate Bill 129 (as substituted) on May 9.
In their letter, ATR wrote:
“On behalf of Americans for Tax Reform and our supporters across Alabama, I urge you to vote NO on HB 352 and SB 129 (as substituted). If you talk to business owners today, many will tell you that the onerous and costly regulations are just as much, if not more of a problem than burdensome taxes. Yet HB 352 and SB 129 would make that problem worse by raising the regulatory cost of doing business in Alabama. Furthermore, this bill is a non-solution in search of a problem.”
SB129 is sponsored by State Sen. Chris Elliott, R-Fairhope. HB352 is sponsored by State Rep. Connie Rowe, R-Jasper.
In addition to ATR, more than 80 franchise brands, including McDonalds, Hilton, and the UPS Store, also signed a letter opposing the pending legislation. They claim that franchises would be less likely to site new locations within the state of Alabama and could cost the state around $1 billion in lost economic output going forward.
SB129/HB352 would regulate private franchise contracts by codifying them into 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 business community is wildly divided on this issue with the Alabama Franchisee Association supporting the legislation and opponents, led by the influential n Franchise Association opposing the bills. Opponents have created a website to fight the legislation.
Supporters argue that the legislation is needed to protect franchisees from unfair franchise agreements being forced on them and to prevent unjust termination of the franchise agreement.
To read the full letter in full, click here.
The House could consider SB129 or HB352 as early as Tuesday. If the House were to pass SB129 without amending it, it would go the governor’s desk. HB352, however, would still have to go to the Senate for their consideration.
