ATLANTA, Ga., May 25 – New Jersey lawmakers today voted in favor of legislation to help restore balance to the relationship between hotel Franchisors and Franchisees, advancing a bill backed by the Asian American Hotel Owners Association (AAHOA) that would ensure greater fairness in the system and strengthen protections for franchise businesses.
New Jersey’s Assembly Bill 1958, which passed the Assembly today, supports AAHOA’s four core pillars of franchise advocacy to reform rules for mandated vendors, rebates, loyalty programs and new fees. AAHOA represents more than 60% of U.S. hotel owners and nearly half of all New Jersey hotel owners, accounting for $4.3 billion in annual wages, salaries and other compensation.
“New Jersey has long been a state with a strong 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.”
AAHOA believes that widespread dissatisfaction with the state of franchising highlights the need for reforms that restore balance in the relationship between Franchisors and the Franchisee owners of branded hotels.
“Large corporate franchisors and their agents like the American Hotel & Lodging Association spent time and money to oppose this legislation to protect the brands at the expense of the hardworking men and women on the front lines of the hospitality industry,” said AAHOA Treasurer Kamalesh Patel. “We appreciate that the state Assembly saw through their smokescreen and took a stand in favor of fair franchising practices that support small businesses and New Jersey’s hospitality industry.”
Assembly Bill 1958 advances AAHOA’s four core pillars for hotel industry Franchisees:
- Fully disclosing the tens of millions of dollars in vendor rebates derived from hotelier Franchisee purchases, and returning them to the Franchisees for the betterment of the system,
- Fairly compensating Franchisees for all loyalty program discounted sales and free reward nights,
- Limiting mandated vendors for non-trademarked products to encourage fair pricing and competition, and
- Avoiding unilaterally imposed and arbitrary franchise fees without proper disclosure and approval.
- AAHOA members testified in favor of the bill in May 2022 and May 2023.
“Today we celebrate serving as the true and only voice of our hotelier franchisee 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. To our New Jersey leaders and members, hats off for your ongoing tireless efforts to make this happen at the Assembly level.”
For more than two decades, AAHOA has been championing fair franchising initiatives, especially as it relates to its educational primer, AAHOA’s 12 Points of Fair Franchising, which serves as a important educational resource to assist members with better understanding the terms of their franchise agreements and relationships with franchisors. AAHOA underscored the educational aspects of the 12 Points with its recent educational webinar series related to each of the 12 Points of Fair Franchising.