National Franchise Legislation

National Franchise Legislation

Peter Lagarias has also participated in drafting and advocating for franchise legislation at the federal level.

In 1995, Lagarias was a delegate at the White House Conference on Small Business, advocating for additional rights for franchisees.

In 1996, Lagarias submitted written comments to the proposed modification of the FTC Franchise Disclosure Trade Regulation Rule. This Rule, however, was subsequently modified by the Federal Trade Commission, effective in 1998, providing additional disclosure requirements aiding franchisees. The Rule, however, does not provide for a federal private claim for relief for failures to disclose, misrepresentations or material omissions in the franchise sales process which harm franchisees. Hence there remains work to be done through federal legislation.

In 1998 and 1999, Lagarias advocated for the Small Business Franchise Act at the United States Capitol in Washington D.C.

Legislative Changes

The text of an enacted statute, for which Lagarias testified in support, reads:

California Business & Professions Code Section 20040.5:

20040.5. A provision in a franchise agreement restricting venue to a forum outside this state is void with respect to any claim arising under or relating to a franchise agreement involving a franchise business operating within this state.

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