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House Co-Sponsorship Memoranda

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House of Representatives
Session of 2017 - 2018 Regular Session


Posted: May 4, 2017 09:11 AM
From: Representative Mary Jo Daley
To: All House members
Subject: Co-Sponsorship Memo - Fair Credit Practices for Franchises
In the near future, I plan to introduce legislation that would provide franchisee’s the right to choose which payment processing provider they wish to use. Similar legislation has been introduced in New York and Hawaii.

Pennsylvania does not have an adequate franchise law that protects franchisees from unfair trade practices. One of these unfair practices is forcing a franchisee to use specific payment processing providers, whose fees may exceed the market rate. This has shown to be a hardship for many small franchise businesses. This legislation would provide franchisees the right to negotiate for more agreeable rates with different payment processing providers.

Specifically, my legislation amends Title 12 (Commerce and Trade) of the PaC.S. by adding Chapter 55 (Franchises). In this chapter a franchisor is provided the right to establish reasonable and specific written standards regarding the nature and quality of a payment processing service or a provider of payment processing services to be used. The franchisor is prohibited from restricting the franchisee from choosing which payment processing provider they wish to use, so long as the quality standard is met. A violation of this will constitute and unfair method of competition and unfair or deceptive act or practice within the Unfair Trade Practices and Consumer Protection Law and will be subject to penalties contained within that law.

Colleagues, please join me in protecting small business franchises by co-sponsoring this important legislation.

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Introduced as HB1591