Keith Miller: Florida’s small businesses need protections in state law

Two Orlando residents are out $8 million after a large, out-of-state corporation forced their local businesses to shut down.

The local entrepreneurs were originally enticed by the corporation to open 10 Mexican-themed fast food restaurants in the Orlando area. The California-based corporation used unrealistic sales projections and profit margins to convince the group to sign on to the deal.

However, after only three years in business, they were forced to walk away and left with no state legal protections to recover their $8 million in investments and their businesses were sold for just 35 percent of their original purchase amount. Additionally, the investors secured loans from the Small Business Association (SBA), a federal program that uses taxpayer dollars to assist and support small business growth.

Since it was a California-based corporation and Florida does not currently have laws on the books to protect our own small-business owners and their investments, these Floridians were bound by California law which favored the corporation.

Florida cannot continue to lose our small businesses, their investments, or risk taxpayer dollars due to unfair corporate franchisor practices.

It is an all-too-common story where local business owners are at the mercy of the more powerful corporations and are taken advantage of. In this instance, the California-based corporation was issuing directives to the Florida owners based on California demographics and sales patterns which simply did not fit the Florida locations. When these locations were unable to comply with the unreasonable demands, and sales goals, they were left with no choice but to walk away from their businesses, leaving behind millions of dollars in property, equipment and supplies.

Owning and operating a successful business is challenging enough without the constant stress and fear that everything you’ve worked for can be taken away in the blink of an eye. 23 other states have already enacted laws to provide greater protection for small business franchise owners and Florida should do the same.

Similarly situated businesses in Florida, such as automobile dealers, agricultural equipment dealers and beer distributors are protected under Florida law.

In Florida, there are more than 40,000 small businesses owned and operated by franchisees who provide over 404,000 jobs and generate $35 billion in economic activity annually.

State Sen. Jack Latvala and State Rep. Jason Brodeur have introduced “The Protect Florida Small Business Act,” legislation that will provide protections to Florida’s small-business owners. Florida citizens can log on to www.ProtectFLBusiness.com to support passage of this important legislation.

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Keith Miller is the Chairman of the Coalition of Franchisee Associations (CFA), an organization founded in 2007 to provide a forum for franchisees to share best practices, knowledge, resources and training. Mr. Miller and the CFA are supporting this legislation and giving a voice to the individual franchisee owners who are at risk of speaking out themselves.