Bill Summary
The "Franchisee Freedom Act" is proposed legislation aimed at enhancing the rights of franchisees in the United States. It establishes a private right of action for individuals harmed by violations of the Franchise Rule as outlined by the Federal Trade Commission (FTC).
Key provisions of the Act include:
1. **Private Right of Action**: Individuals who suffer harm from violations of the FTC's Franchise Rule or the Act itself can seek actual damages, equitable relief (such as contract rescission), and reimbursement for reasonable attorneys' fees and costs.
2. **Jurisdiction and Venue**: Legal actions under this Act can be initiated in either the United States District Court where the claimant resides or in a relevant state court.
3. **Right of Association**: Franchisors are prohibited from restricting franchisees' rights to associate with one another or participate in trade associations. The Act also protects franchisees from retaliation for exercising these rights.
Overall, the Act aims to empower franchisees, ensuring they have legal recourse against unfair practices and can freely associate for collective interests.
Possible Impacts
Here are three examples of how the "Franchisee Freedom Act" could affect people:
1. **Empowerment of Franchisees**: The Act provides franchisees with a private right of action against franchisors who violate the Franchise Rule. This means that franchisees who feel wronged or harmed by unfair practices can take legal action to seek actual damages, potentially leading to greater accountability among franchisors. For example, if a franchisor fails to disclose important information or engages in deceptive practices, a franchisee can sue for damages, which could help protect their investment and livelihood.
2. **Increased Association and Collaboration**: The provision that prohibits franchisors from restricting franchisees' ability to associate with one another or participate in trade associations empowers franchisees to collaborate and share best practices. This could lead to stronger networks among franchisees, allowing them to advocate for their interests collectively, negotiate better terms, and share resources. As a result, franchisees may experience improved business conditions and greater support in addressing common challenges.
3. **Legal and Financial Implications for Franchisors**: With the introduction of a private right of action, franchisors may face increased legal risks and costs associated with compliance. They may need to invest more in training and ensuring compliance with franchise regulations to avoid lawsuits from franchisees. Additionally, if franchisees successfully sue for damages or equitable relief, franchisors could incur significant financial liabilities, which could impact their business operations and overall profitability. This might lead to changes in how franchisors operate and interact with their franchisees.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4614 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 4614
To provide a private right of action for persons harmed by violations
of the Franchise Rule of the Federal Trade Commission, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 22, 2025
Ms. Schakowsky (for herself, Mr. Johnson of Georgia, and Mr. Huffman)
introduced the following bill; which was referred to the Committee on
the Judiciary
_______________________________________________________________________
A BILL
To provide a private right of action for persons harmed by violations
of the Franchise Rule of the Federal Trade Commission, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Franchisee Freedom Act''.
SEC. 2. PRIVATE RIGHT OF ACTION.
(a) In General.--Notwithstanding any other provision of law, any
person found to have committed any violation of part 436 of title 16,
Code of Federal Regulations, or section 3 of this Act, shall be liable
to any person harmed by such violation for--
(1) actual damages;
(2) additional equitable relief, including rescission of
any contract and such other equitable relief as a court may
find appropriate; and
(3) reasonable attorneys' fees and costs.
(b) Jurisdiction and Venue.--Jurisdiction and venue of a civil
action under this section shall be concurrent and may be commenced in--
(1) the United States District Court in the district in
which the claimant resides; or
(2) in a State court of competent jurisdiction in the State
in which the claimant resides.
SEC. 3. RIGHT OF ASSOCIATION.
A franchisor may not, directly or indirectly, restrict a franchisee
from associating with other franchisees or from participating in a
trade association, including by retaliating against a franchisee for
associating with other franchisees or participating in a trade
association.
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