Sponsors (159)
The bill trades greater legal clarity and protection for franchisor/franchisee autonomy and lower litigation risk for a narrowing of avenues to hold franchisors accountable, which improves predictability for small businesses but risks weakening labor protections for workers.
Franchise owners (franchisees) and franchisors will have clearer recognition of franchisee independence and face reduced joint‑employer exposure, lowering legal liability and compliance costs for small businesses.
Franchisors (and franchisees) get clearer, more predictable rules limiting when a franchisor is a joint employer, reducing litigation risk and regulatory uncertainty.
Employees, employers, and unions gain a more predictable legal standard for joint‑employer status in franchising disputes, improving case clarity and legal planning.
Low‑wage and other workers in franchised businesses may lose an important pathway to hold franchisors jointly responsible for labor violations, weakening worker protections and remedies.
Franchisors could face reduced legal exposure to labor claims and may restructure contracts or practices to stay below a 'substantial' control threshold, further limiting accountability for workplace harms.
Labor unions and enforcement agencies may have reduced leverage to address systemic labor issues in large franchised chains, making industry‑wide remedies harder to achieve.
Based on analysis of 4 sections of legislative text.
Establishes a franchising-specific joint‑employer test under the NLRA and FLSA requiring 'substantial direct and immediate control' over essential employment terms to find franchisor joint‑employer liability.
Official title: To preserve the franchise business model.
Introduced September 10, 2025 by Kevin Hern · Last progress September 10, 2025
Creates a franchising-specific test under the National Labor Relations Act and Fair Labor Standards Act that narrows when a franchisor can be treated as a joint employer. The bill defines franchising terms by reference to existing FTC rules and requires a finding of "substantial direct and immediate control" over one or more essential terms and conditions of employment before a franchisor may be treated as a joint employer; it excludes routine or sporadic franchisor activities and is not retroactive.