Lawmakers Push for Franchise Independence With New Bill | Entrepreneur

"Changes to joint-employer rules have caused costly uncertainty in the industry for too long,"

"The American Franchise Act aims to restore stability by clarifying that franchisors and franchisees operate as independent employers while safeguarding workers through established labor standards."

"This legislation recognizes that franchisees are small businesses and their independence must be protected by federal law,"

"The American Franchise Act allows franchisors to properly support their franchisees, who are often first-time business owners from all walks of life, without the fear of an overly broad joint employer standard undermining the unique benefits of the franchise relationship."

The American Franchise Act seeks to resolve uncertainty over the application of federal labor law to franchisors and franchisees by establishing that franchisors and franchisees are independent employers while preserving statutory worker protections. The bill was introduced by 14 House members, including Don Davis (D-NC) and Kevin Hern (R-OK). The measure would formally recognize franchisees as independent business owners rather than employees of parent brands. The International Franchise Association, representing more than 830,000 franchise businesses, endorsed the bill as protecting franchisee independence and enabling franchisors to support franchisees without an overly broad joint-employer standard. The legislation targets inconsistencies in the joint-employer test under the NLRA and FLSA.

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