SB376: SB376 "Georgia Restaurant Franchise Relations Act"; enact

Currently, Georgia law does not have a specific statute governing the relationship between restaurant franchisors (the companies that license a brand and business system) and franchisees (the local owners who operate under that brand). This bill would create the 'Georgia Restaurant Franchise Relations Act' inside the state's trade practices code. The bill would require franchisors to have 'good cause' before terminating a franchise, generally meaning the franchisee gets at least 90 days' notice and a chance to fix a problem. It lists specific situations, such as bankruptcy, fraud, or a felony conviction, where a franchisor could terminate immediately without that notice period. It also lets a franchise continue automatically if the franchisor allows the franchisee to keep operating 30 days past the contract's end, bars franchisors from treating franchise-owned locations worse than their own company-owned locations, voids contract clauses that pick another state's law or require lawsuits to be filed elsewhere, and gives a deceased franchisee's family or heirs the right to keep running the franchise for at least six months. Violations would count as unfair trade practices under Georgia's existing Fair Business Practices Act, and harmed individuals could sue. The law would take effect July 1, 2025, applying to franchises entered into or renewed on or after that date.

• Bars a franchisor from terminating a restaurant franchise before its contract term ends unless there is 'good cause,' generally requiring 90 days' notice and a chance to fix the problem.
• Lists specific events, such as bankruptcy, felony conviction, or fraud, that let a franchisor terminate immediately without the usual notice and cure period.
• Automatically renews a franchise agreement on the same terms if the franchisor lets the franchisee keep operating 30 or more days after the contract expires.
• Prohibits a franchisor from imposing tougher standards on franchise-owned locations than on the company's own outlets in the same state.
• Voids contract clauses that require disputes to follow another state's law or be filed in a specific court chosen by the franchisor.
• Requires franchisors to let a deceased franchisee's spouse, heirs, or estate keep running the franchise, without new training or qualification requirements, for at least six months.

The bill affects restaurant franchisors (the corporate brand owners) and restaurant franchisees (the local business owners who operate under a franchise agreement) in Georgia, as well as franchisees' surviving family members or heirs and arbitrators handling franchise disputes under the Fair Business Practices Act.

Restaurant franchise owners in Georgia would gain specific legal protections against sudden termination, unequal treatment compared to company-owned stores, and out-of-state legal jockeying in contracts. Franchise brands would face new limits on how and when they can end or refuse to renew agreements with local operators.

• Code Section 10-1-961 defines key terms including 'franchise,' 'franchisee,' 'franchisor,' and 'franchise fee,' setting thresholds (such as fees under $100 annually) that exclude certain arrangements from coverage.
• Code Section 10-1-965 requires 'good cause' and at least 90 days' notice to cure a problem before a franchisor can terminate a franchise, and bars cutting off supply during the cure period if the franchisor is the sole supplier.
• Code Section 10-1-967 lists events, like bankruptcy, felony conviction, or material misrepresentation, that allow immediate termination without a cure period.
• Code Section 10-1-968 allows franchisors and franchisees to agree to binding arbitration, provided arbitration standards meet the chapter's requirements and arbitrators are drawn from an impartial list such as the American Arbitration Association.
• Code Section 10-1-969 deems a franchise automatically renewed on the same terms if the franchisor allows continued operation 30 or more days past the contract's expiration.
• Code Section 10-1-975 bars franchisors from imposing higher standards or otherwise treating franchise locations differently from company-owned locations.
• Code Section 10-1-976 voids contract terms requiring another state's law to apply or setting a specific venue for disputes.
• Code Section 10-1-977 protects a deceased franchisee's surviving spouse, heirs, or estate from losing the franchise and from new training requirements for six months, while they must still meet existing standards.

1. 2025-04-04Senate Read and Referred (Senate)
2. 2025-04-04Senate Hopper (Senate)

• Randy Robertson (R, SD-029)Primary sponsor

• franchise law
• restaurant industry
• small business protections
• consumer trade practices
• contract law