Michigan House Bill 5465 was introduced this March and was dormant until two weeks ago, when a hearing was suddenly scheduled for last Wednesday. If enacted, the bill would have granted franchisees a wide latitude in choosing vendors of “equipment, fixtures, supplies and services” in the operation of their businesses. IFA helped mobilize a coalition of various business groups including the Michigan Restaurant Association, Michigan Chamber of Commerce, and Michigan Retail Association to oppose the legislation.
IFA’s Director, State Government Relations, Public Policy & Tax Counsel Dean Heyl traveled to Lansing and testified before the House Regulatory Reform Committee against the bill. Members of the Committee universally understood the need for consistency in a customer’s experience when patronizing a franchise, whether it be eating at a restaurant or staying at a hotel and that this bill would have put a franchise’s brand integrity at risk.
The Chair of the Committee said that there were no foreseeable plans to have a vote on the bill.
The defeat of House Bill 5465 is significant win for the franchise industry. IFA has always taken the position that the occasional disagreements that arise between franchisees and franchisors should be resolved between the parties and not through legislation that will have the likely result of encompassing other franchisees and franchisors not involved with the original dispute.