NEW JERSEY FRANCHISE REFORM BILL TAKES A STEP FORWARD

ONE VERSION OF a proposed New Jersey bill that would reshape hotel franchising in the state has passed out of committee in the Assembly but efforts
reportedly are under way to amend it to address opponents’ concerns. The Senate version of the bill remains in committee.

The American Hotel & Lodging Association, a long-time critic of the proposed legislation, called the Assembly Committee on Commerce, Economic Development and
Agriculture’s passage of the bill a “dangerous step forward.” Supporters of the bill, including AAHOA as well as sponsors of the bill, did not respond to
requests for comment in time for this article.

What’s at stake

The bills, A3495 in the Assembly and S2336 in the Senate, were introduced at the beginning of the year to replace the original legislation that stalled in the
state’s legislature last year. It is essentially the same as its prior incarnation. Specifically, the provisions include restricting non-competes that are longer
than six months; prohibiting requiring a relocation or capital investment greater than $25,000 more than once every five years unless hotel franchisers can
establish a return on the investment; requiring a franchiser that receives “any rebate, commission, kickback, services, other consideration or anything of
value” to fully disclose them to the franchisee and turn them over to the franchisee; putting restrictions on mandatory sourcing of goods or resources; and
prohibiting suspending, restricting or preventing access to franchise services.