Asian American hotel owners lead changes in New Jersey Franchise Act

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Members of the AAOHA Leadership – From left Asvin Patel, Kenish Patel, Prakash Shah, Mayuri Patel, Dushyant Patel, Rajesh Patel, Laura Lee, President, Maulesh Patel, Neel Parikh, Raj Parikh, Bhavesh Patel, Anil Patel, MZ Patel, Mayur Chedda, Mehul Chedda, Bhavesh Chauhan, Jaymin Patel and Raj Bhagia. Photo Courtesy: Mahendra (MZ) Patel

The Asian American Hotel Owners Association (AAHOA), the world’s largest hotel owners association, whose membership is overwhelmingly Indian-American, led a successful effort in New Jersey to introduce Assembly Bill 1958 that seeks to change the state’s Franchise Practice Act for the hospitality industry.

According to a 2021 Oxford Economics research study, quoted by AAHOA in its press release, New Jersey AAHOA Members own 45.4% of the hotels in the state, employ more than 72,000 workers, contribute $7.3 billion to the state’s GDP, and pay more than $2 billion in federal, state, and local taxes.

More than 30 experienced hotel owners and leaders from the hospitality industry and AAHOA, who have worked with hotel franchises and have experience in the hotel industry spanning decades, gathered in New Jersey State Assembly for introduction of Assembly Bill 1958 on Thursday, May 12, 2022. Several AAHOA Members from the Mid-Atlantic region also shared their personal experiences related to provisions of the bill during the hearing.

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Some of the changes among the many, include the restriction of non-competes for longer than six months, prohibits requiring a relocation or capital investment greater than $25,000 more than once every five years unless hotel franchisors can establish a return on the investment, requires a franchisor that receives “any rebate, commission, kickback, services, other consideration or anything of value” to fully disclose them to the franchisee and turn them over to the franchisee, puts restrictions on mandatory sourcing of goods or resources, and prohibits suspending, restricting, or preventing access to franchise services.

The legislation has been sponsored by New Jersey Assemblyman Raj Mukherji (District 33, Hudson), Robert J. Karabinchak (District 18, Middlesex), and Ronald S. Dancer (District 12, Burlington, Middlesex, Monmouth, and Ocean) and cosponsored by William W. Spearman (District 5, Camden and Gloucester).

The Assembly Judiciary hearing was attended by prominent hotel owners and leaders from AAHOA, including Mid Atlantic Regional Director Mahendra (MZ) Patel, Past Chair Bhavesh Patel (2017-2018), and President & CEO Laura Lee Blake.

“New Jersey hotel owners carried the day, and the passage of this bill out of Committee was a truly great start to the new day we are building for AAHOA,” Blake is quoted saying in the press release.

“It truly is a new day for AAHOA, a new start for our organization, and I am proud of our team’s efforts in New Jersey and for standing up for America’s hotel owners,” said AAHOA Chairman Neal Patel. “As they say, action speaks louder than words – by participating, speaking out, and sharing our personal stories, AAHOA demonstrated that we are the one and only voice for America’s hotel owners.”

According to the press release, AAHOA’s 20,000 members own 60% of the hotels in the United States and are responsible for 1.7% of the nation’s GDP. More than one million employees work at AAHOA member-owned hotels, earning $47 billion annually, and member-owned hotels support 4.2 million U.S. jobs across all sectors of the hospitality industry.

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