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SB138 ENROLLED
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SB138
DG8QQTN-2
By Senator Roberts
RFD: Fiscal Responsibility and Economic Development
First Read: 14-Jan-26
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First Read: 14-Jan-26
Enrolled, An Act,
Relating to franchises; to prohibit a franchisor from
requiring a franchisee that asserts a sincerely held religious
belief to operate on a religious day under certain
circumstances; and to provide a cause of action for
violations.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. (a) For purposes of this section, the
following terms have the following meanings:
(1)FRANCHISE AGREEMENT. A written agreement or an
amendment or renewal of a written agreement, or in the absence
of a written agreement, a course of practice, in which a
person grants to another person a license to use a trade name,
trademark, service mark, or related characteristic in exchange
for the payment of a franchise fee. The term includes a sales
and service agreement other than a sales and service agreement
regulated by Chapter 20 of Title 8, Code of Alabama 1975, The
Motor Vehicle Franchise Act; Chapter 8A of Tile 28, Code of
Alabama 1975; or Chapter 9 of Title 28, Code of Alabama 1975.
(2) FRANCHISEE. a. A person with which a franchisor has
agreed or permitted, in writing or in practice, to purchase,
sell, or offer for sale a product manufactured, produced,
represented, or distributed by the franchisor in exchange for
the payment of a franchise fee from the franchisee to the
franchisor.
b. The term does not include a person regulated under
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b. The term does not include a person regulated under
Chapter 20 of Title 8, Code of Alabama 1975, The Motor Vehicle
Franchise Act; Chapter 8A of Title 28, Code of Alabama 1975;
Chapter 9 of Title 28, Code of Alabama 1975; or Chapter 15 of
Title 34, Code of Alabama 1975.
(3) FRANCHISOR. a. A person that has agreed with or
permits, in writing or in practice, a franchisee to purchase,
sell, or offer for sale a product manufactured, produced,
assembled, represented, or distributed by the franchisor. The
term includes: (i) the manufacturer, producer, assembler, or
distributor of the product; (ii) an intermediate distributor;
and (iii) an agent, officer, or field or area representative
of the franchisor.
b. The term does not include a person regulated under
Chapter 20 of Title 8, Code of Alabama 1975, The Motor Vehicle
Franchise Act; Chapter 8A of Title 28, Code of Alabama 1975;
Chapter 9 of Title 28, Code of Alabama 1975; or Chapter 15 of
Title 34, Code of Alabama 1975.
(4) ORIGINAL FRANCHISE AGREEMENT. A franchise agreement
that is not a renewal or an amendment. The term includes any
written documents incorporated into the agreement by
reference.
(5) RELIGIOUS DAY OPERATION REQUIREMENT. Any
requirement that has the effect of requiring a franchisee to
operate a franchise on a day when doing so would conflict with
the franchisee's sincerely held religious beliefs.
(b) Except as provided in subsection (c), when a
franchisee asserts a sincerely held religious belief, a
franchisor may not:
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franchisor may not:
(1) Enforce a religious day operation requirement;
(2) Require a franchisee to accept a religious day
operation requirement as part of an amendment to the franchise
agreement; or
(3) Refuse to renew a franchise agreement based on a
franchisee's decision to not comply with a religious day
operation requirement.
(c) Subsection (b) does not apply and a franchisor is
not prohibited from enforcing a religious day operation
requirement when:
(1) The original franchise agreement or franchise
agreement then in effect conspicuously provides for operation
on a day that imposes a religious day operation requirement;
(2) The franchisee agrees through a renewal or an
amendment to the franchise agreement to a religious day
operation requirement; or
(3) The franchisor and the franchisee enter a franchise
agreement expanding the franchisee's number of franchise
locations which contains a religious day operation
requirement.
(d) If a court finds reasonable cause to believe that a
franchisor violated subsection (b), the court may order:
(1) Actual damages, reasonable attorney fees, and costs
to the franchisee;
(2) A permanent or temporary injunction, a temporary
restraining order, or other appropriate order; and
(3) Civil penalties against the franchisor in an amount
not exceeding:
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not exceeding:
a. Ten thousand dollars ($10,000) for a first
violation;
b. Twenty-five thousand dollars ($25,000) for an
additional violation within the five-year period ending on the
day on which the franchisee filed the complaint; or
c. Fifty thousand dollars ($50,000) for an additional
violation within the seven-year period ending on the day on
which the franchisee filed the complaint.
Section 2. This act shall become effective on June 1,
2026.
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2026.
________________________________________________
President and Presiding Officer of the Senate
________________________________________________
Speaker of the House of Representatives
SB138
Senate 12-Feb-26
I hereby certify that the within Act originated in and passed
the Senate.
Patrick Harris,
Secretary.
House of Representatives
Amended and passed: 08-Apr-26
Senate concurred in House amendment 08-Apr-26
By: Senator Roberts
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