Coming on the heels of Assembly Bill 257, which was placed on temporary hold until the November 2024 election, Assemblymember Chris Holden introduced Assembly Bill 1228 in February, aiming to change liability rules for franchised eateries in the quick-service restaurant industry.
AB 1228 aims to require fast food franchisors and franchisees to share all civil liability for violations of laws and regulations — a concept that has restaurant franchisors concerned about an industry already taxed with rules and regulations.
The proposed bill argues that the quick-service restaurant industry has shown a history of past law violations such as wage theft, sexual harassment, discrimination and other monetary and physical workplace violations, and that by combining liability, franchisors will take more responsibility to achieve compliance with employer laws.
The No on AB 1228 coalition fears that, if passed, AB 1228 will shut down local restaurants, incentivize potentially frivolous lawsuits and lead to higher food costs to the consumer. The coalition argues that California is home to some of the most scrutinous laws for quick-service and restaurant industry employees and businesses, and that AB 1228 is wholly unnecessary.
Ali Nekumanesh, president at Eagle Management Business Consulting and executive vice president of Deli Delicious Franchising Inc., agrees, and fears the bill unfairly singles out the quick-service and franchising industries.
“I don’t believe Mr. Holden...
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