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 The legislation, known as SB 610 and the subject of a fierce
lobbying battle between the opposing sides, would have changed the
standard required to end a franchise agreement from "good cause" to
a "substantial and material breach".
The bill also would have required a franchisor that terminates an
agreement without a material breach to compensate the franchisees
for the fair value of their businesses or to provide them an
opportunity to sell.
At present, California law only requires franchisors that terminate
or fail to renew a franchise agreement to offer to repurchase a
franchisee's inventory.
"While the 'good cause' standard is common and well understood, the
standard provided in this bill is new and untested," Brown said in
his veto message.
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Brown said the opposing sides in the battle over the legislation
held polarized positions. "It is in the best interest of all that a
concerted effort be made to reach a more collaborative solution," he
added.
(Reporting by Lisa Baertlein in Los Angeles; Editing by Lisa Von
Ahn)
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