Franchisee Freedom Act

The Franchisee Freedom Act creates a private civil remedy for individuals harmed by violations of the Federal Trade Commission’s Franchise Rule (16 C.F.R. Part 436) and for violations of Section 3 of the Act itself. Victims can recover actual damages, certain equitable relief (including rescission of contracts), and reasonable attorneys’ fees and costs. The bill allows lawsuits to be brought in either federal district court (in the claimant’s district) or in state court with competent jurisdiction in the claimant’s state, creating concurrent federal/state jurisdiction. In addition, the bill establishes a new standard prohibiting franchisors from restricting franchisees’ ability to associate with other franchisees or with trade associations, and from retaliating against franchisees for such associations. In short, the act expands private remedies for Franchise Rule violations and strengthens protections for franchisees’ freedom to organize and collaborate with peers, while giving courts flexibility to hear these claims in either federal or state courts.