Sponsors (119)
The bill increases predictability and affirms franchisee independence to benefit franchisors, franchisees, and consumers, but does so by narrowing franchisor liability — improving business stability at the cost of limiting workers' remedies and shifting more legal and financial risk onto franchisees and potentially taxpayers.
Small-business owners (franchisors and franchisees) gain clearer legal recognition of franchise relationships and affirmation of franchisee independence, reducing contractual and regulatory uncertainty and preserving local managerial control.
Businesses and workers get a clearer statutory standard for when franchisors are jointly liable (focused on sustained, direct control of core employment terms), which should reduce unpredictable litigation and regulatory variability.
Workers at franchise establishments may experience greater job stability if preserved franchising scale and reduced exposure for franchisors helps maintain franchise growth and employment.
Workers (including union members and low- and middle-income employees) may have reduced ability to hold franchisors jointly liable for labor violations, making it harder to obtain remedies or increase collective bargaining leverage.
Small franchise owners could face greater legal and financial responsibility for employment claims, raising operating costs and financial risk for small-business-owners.
Ambiguities in terms like 'sustained' or 'consequential effect' could prompt new rounds of litigation to interpret the law, producing legal costs and continued uncertainty for both businesses and workers.
Based on analysis of 4 sections of legislative text.
Creates a statutory test that a franchisor is a joint employer only if it substantially, directly, and immediately controls core employment terms, and applies this rule to the NLRA and FLSA.
Introduced September 10, 2025 by Kevin Hern · Last progress September 10, 2025
Creates a single, stricter legal test for when a franchisor is treated as a joint employer of a franchisee’s employees under the National Labor Relations Act and the Fair Labor Standards Act. The law defines “substantial direct and immediate control” over core employment terms (wages, benefits, hours, hiring, firing, discipline, supervision, direction) and says a franchisor is a joint employer only if it actually possesses and exercises that substantial control; sporadic, isolated, or de minimis control is excluded. The rule applies going forward and does not affect cases started before the law takes effect.