AHLA resistance halts progress of anti-franchise bill in NJ Senate

Wednesday, January 10, 2024

Chip Rogers, President & CEO of the American Hotel & Lodging Association (AHLA), issued a statement today in response to the stalling of legislation in the New Jersey State Senate that posed a threat to the hotel industry’s franchise model.

Rogers commended the New Jersey state senators for their decision to let S3165/A1958 stall during the recent legislative session. He emphasized that the proposed legislation would have significantly restricted hotels’ ability to uphold quality, service, and safety standards that guests rely on. Furthermore, it would have jeopardized the successful hotel industry franchise model, responsible for creating millions of jobs and enabling numerous Americans to realize their entrepreneurial dreams.

Looking ahead, Rogers expressed AHLA’s commitment to collaborating with lawmakers to safeguard the hotel industry from similar legislative threats. He underscored the potential consequences, warning that such measures could drive reputable hotels out of New Jersey, resulting in the loss of thousands of jobs for the state.

Providing background information, it was highlighted that the New Jersey General Assembly passed A1958 in May 2023, but the bill failed to receive a hearing in the state senate. The legislation was criticized for unfairly singling out the hotel industry and inserting the government into franchisor-franchisee business relationships. Additionally, it was noted that the legislation would have imposed severe limitations on franchisors in enforcing brand standards, potentially leading to the discontinuation of loyalty point programs in New Jersey. Moreover, the proposal conflicted with federal trademark law, opening the door to costly legal disputes between hotel brands and owners.

The current hotel franchise model, as emphasized, empowers small-business owners to rapidly expand their enterprises by leveraging well-known and trusted hotel brand names. Statistics were provided to illustrate the significance of the franchise model, with over 50% of all U.S. hotels being franchised, supporting over 2.5 million jobs in 2023, and contributing nearly $25 billion in state and local tax revenue.

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