IFA STATEMENT ON CALIFORNIA AB-5 PASSAGE AND APPROVAL

September 18, 2019

FOR IMMEDIATE RELEASE

Contact:
Jenna Weisbord, 310-995-0839
[email protected]
@franchising411

(WASHINGTON, SEPT.18, 2019) – The International Franchise Association (IFA) today released the following statement on the passage and gubernatorial approval of California’s Assembly Bill 5, or AB-5.

“With this bill’s passage, California has upended an entire business model and thrown thousands of small business owners’ livelihoods into flux. AB-5’s overly broad language makes franchising’s future uncertain in California.

“Over the coming months, IFA will exercise all possible options, including continuing to lobby the California legislature for a common-sense exemption from this misguided policy, while partnering in coalitions with other affected industries to pursue other challenges to the law,” said Matt Haller, IFA’s Senior Vice President of Government Relations and Public Policy.

Through its codification and wide-ranging application of the so-called ABC Test, AB-5 could potentially turn franchising – where an independent owner licenses a brand name and an operating system from an established brand – into a corporate model, where the independent owners and their employees are effectively absorbed into a single company.

California’s nearly 76,000 franchise businesses employ nearly 729,000 people and create nearly $70 billion in economic output.

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About the International Franchise Association
Celebrating 58 years of excellence, education and advocacy, the International Franchise Association is the world's oldest and largest organization representing franchising worldwide. IFA works through its government relations and public policy, media relations and educational programs to protect, enhance and promote franchising and the more than 733,000 franchise establishments that support nearly 7.6 million direct jobs, $674.3 billion of economic output for the U.S. economy and 2.5 percent of the Gross Domestic Product (GDP). IFA members include franchise companies in over 300 different business format categories, individual franchisees and companies that support the industry in marketing, law, technology and business development.