Franchisees Ask Calif. Federal Court For Block On AB 5

Law360 (November 18, 2020, 11:55 AM EST) -- Franchisees should be excluded from California's landmark worker classification law because franchise arrangements and employee status are mutually exclusive, business groups representing Dunkin' Donuts and Supercuts franchise owners said in a federal lawsuit filed Tuesday.

Franchisors face a conflict between the state law known as A.B. 5 and federal franchising and trademark rules, according to the suit, filed in San Diego federal court by the Supercuts Franchisee Association, the DD Independent Franchise Owners Association, the International Franchising Association and the Asian American Hotel Owners Association.

The franchisee groups argued franchisors cannot simultaneously comply with the Federal Trade Commission franchise rule, which...

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