"Hotel Franchisee Fairness and Market Access Act."

S4202 SCM Statement 6/8/26

SENATE COMMERCE COMMITTEE

STATEMENT TO

SENATE, No.
4202

STATE
OF NEW JERSEY

DATED:
�JUNE 8,
2026

����� The Senate Commerce Committee reports favorably Senate
Bill No. 4202.

����� This
bill establishes the �Hotel Franchisee Fairness and Market Access Act.��
Specifically, the bill aims to establish a more fair and transparent
relationship between a hotel franchisor and a franchisee.�

����� In
the bill, a hotel franchisor cannot require a franchisee to purchase goods or
services that are not directly related to the guest experience as a condition
of entering into, renewing, extending, or continuing a franchise agreement,
unless the franchisee provides prior written consent.� A franchisee may also
choose the source of non-guest facing goods or services, provided that the
goods and services meet reasonable, operational standards.� A hotel franchisor
is not to impose penalties, fees, termination, or non-renewal for a
franchisee�s refusal to purchase goods or services.

����� Additionally,
a hotel franchisor is to fully disclose to franchisees any rebate, commission,
or fee received from vendors based on franchisee purchases.� Any amounts
attributable to a franchisee are to be returned through an itemized reduction
in franchise fees or direct payment within 60 days.� The required disclosures
are to be provided annually and maintained for no less than five years.

����� Under
the bill, a hotel franchisor is not to authorize a hotel of the same brand or
chain scale within a franchisee�s protected territory without written consent
or reasonable compensation.� Additionally, a franchisee is to be compensated
for guest stays booked using loyalty points.� The compensation is to be no less
than the lowest publicly available room rate for the applicable room and dates
or the published redemption value, whichever is greater.� A hotel franchisor is
also not to impose a material change to a franchise agreement through manuals,
policies, or standards without franchisee consent, except where directly
related to health or safety.� Moreover, a hotel franchisor cannot require or
attempt to require a franchisee to undertake a material capital expenditure,
renovation, improvement, equipment replacement, or relocation unless certain
circumstances arise.

����� A
hotel franchisor also cannot, under the bill, (1) prohibit, restrict, penalize,
or retaliate against a franchisee for listing or selling guest rooms through a
legitimate third-party lodging platform; or (2) impose or enforce any post-term
restriction on the franchisee, or on any owner; officer; director; member;
manager; partner; or employee of the franchisee, that prohibits or materially
restricts the person, for more than six months after termination, cancellation,
or non-renewal of the franchise agreement, from owning; operating; being
employed by; providing services to; or participating in any lawful business or
commercial activity.

����� Lastly,
a franchisee may bring a civil action for violations of the bill and seek
injunctive relief, damages, attorneys� fees, and costs.� The Attorney General
may enforce the provisions of the bill on behalf of the State.