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

Summary

The Senate Commerce Committee of the State of New Jersey, in a statement dated June 8, 2026, reports favorably Senate Bill No. 4202, which establishes the "Hotel Franchisee Fairness and Market Access Act." A hotel franchisor may not require a franchisee to buy goods or services not directly related to the guest experience without prior written consent, and must disclose vendor rebates, commissions or fees and return amounts attributable to a franchisee within 60 days. Franchisees are to be compensated for loyalty-point stays and protected from same-brand hotels in their territory without consent or reasonable compensation. Post-term restrictions over six months are barred, and franchisees may bring a civil action.

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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 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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