New Jersey legislature in favor of franchise-related legislation

Lawmakers in New Jersey on Thursday voted in favor of legislation to help restore balance in the relationship between hotel franchisors and franchisees, advancing a bill supported by the Asian American Hotel Owners Association (AAHOA).  

New Jersey’s Assembly Bill 1958 will ensure more fairness in the system and strengthen protections for franchise businesses, AAHOA said in a statement.  

“Today, we celebrate serving as the true voice of our hotelier franchise members in New Jersey,” said AAHOA President and CEO Laura Lee Blake. “Our sincere thanks to Assembly Member Raj Mukherji for championing these efforts and to each of the 40 additional members of the Assembly who voted in favor of A 1958.” 

AAHOA members testified in favor of the bill this March and May 2022.  

On Thursday, The Assembly passed the bill in favor of AAHOA’s four main pillars of franchisee advocacy. These four pillars represent the primary issues AAHOA advocates for on behalf of member hoteliers.  

The four main pillars are: 

  • Mandated vendors — Limiting brands from mandating specific vendors to enable competitive pricing. Brands, however, can control lists of approved vendors to ensure compliance with brand and product standards, particularly in the case of trademarked items.  
  • Rebates — Complete disclosure of all vendor rebates and return them to the franchisees for the improvement of the system. 
  • Loyalty programs — Fair compensation of franchisees for all loyalty programs discounted sales and free reward nights. 
  • New fees — Avoid unilaterally imposed and arbitrary franchise fees without proper disclosure and approval.  

For over 20 years, AAHOA has been championing fair franchising initiatives, particularly as it relates to its educational primer, AAHOA’s 12 points of fair franchising, which serves as a resource to help members with a better understanding of the terms of their franchise agreements and relationships with franchisors.  

Earlier this year, Marriott International and Choice Hotels International withdrew support from AAHOA over the association’s 12 points of fair franchising.  

In a statement, AAHOA said widespread dissatisfaction with the condition of franchising reflects the need for reforms to restore balance between franchisors and franchisees of branded hotels. 

“New Jersey has long been a state with a string entrepreneurial culture that has been welcoming to immigrants, including many AAHOA members,” said AAHOA Chairman Bharat Patel. “The state Assembly recognized that and took a step toward making New Jersey a better place for small businesses with today’s vote to advance fair franchising principles. New Jersey can be an example to the nation for supporting franchising practices that allow hotel owners to achieve the American dream.”