Senate Commerce Committee Statement — Senate Bill No. 4202 (New Jersey, June 8, 2026)

Summary

Senate Commerce Committee Statement to Senate, No. 4202, dated June 8, 2026, reporting favorably Senate Bill No. 4202, which establishes the “Hotel Franchisee Fairness and Market Access Act.” Under the bill, a hotel franchisor cannot require a franchisee to purchase goods or services not directly related to the guest experience as a condition of a franchise agreement unless the franchisee provides prior written consent, and is to fully disclose any rebate, commission, or fee received from vendors based on franchisee purchases. A franchisee is to be compensated for guest stays booked using loyalty points. A franchisee may bring a civil action for violations and seek injunctive relief, damages, attorneys’ fees, and costs, and the Attorney General may enforce the bill on behalf of the State.

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     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
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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.


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