California State Assembly passes the Fast Food Franchisor Responsibility ActCalifornia State Assembly passes the Fast Food Franchisor Responsibility Act

Joanna Fantozzi

The California State Assembly passed AB 1228 — also known as the Fast Food Franchisor Responsibility Act — on Wednesday. The controversial bill would hold both franchisors and franchisees jointly responsible for working conditions in their stories, and was created on the heels of the postponement of the California FAST Act, a similar bill that has proven to be equally unpopular with restaurant operators.

The text of the Fast Food Franchisor Responsibility Act was originally a part of the FAST Act but was stripped out of the bill before it got to Gov. Gavin Newsom’s desk. The legislation was introduced as a separate bill in February by Assemblymember Chris Holden, and would require fast food restaurant companies to share civil liability with their franchisees for any violations of labor laws or standards. If there is an issue with a franchisee breaking any labor laws, the franchisor would have the opportunity to remedy any violation before civil action would commence.

According to the the proposed bill, the act was introduced to remedy the alleged trend of labor law violations in the quick-service industry, which includes wage theft, sexual harassment, discrimination, and workplace injuries and violence. According to Assemblymember Holden, franchisee-owned restaurants exhibit higher levels of noncompliance with minimum wage violations than do company-owned restaurants (a hypothesis that has been uphold by university research) and the law is designed to require franchisors to take responsibly for these issues.  

Related:The latest in the FAST Act saga

"We have the ability to do more for fast food employees by focusing on the relationship between franchisors and their franchisees," Holden said in a statement about the bill in April. "Let's make it easier for franchisees to pay, support, and protect their employees."

Not surprisingly, the bill has proven to be unpopular with the restaurant franchise community, and the International Franchise Association claims that 92% of franchised restaurant owners oppose AB 1228.

“California voters have made it clear they do not want a government takeover of their local restaurants, yet Assemblymembers today voted in favor of special interests against the will of their constituents,” Jeff Hanscom, IFA vice president of state and local government relations said in a statement. “AB 1228 has the potential to destroy tens of thousands of local franchised restaurants by taking away their independence in favor of corporate control and more government intervention.”

Related:California’s controversial FAST Act might be on pause until 2024 election

The bill will next be voted on by the California State Senate, and if passed would head to Gov. Newsom’s desk with the potential to be signed into law.

Contact Joanna at [email protected]