Sponsors (149)
The bill reduces litigation risk and regulatory uncertainty for franchisors and franchisees and preserves local owner autonomy, but does so by narrowing joint‑employer exposure in ways that weaken workers' ability to hold franchisors accountable and may shift costs onto small franchise owners.
Small-business franchise owners and franchisors face substantially lower risk of being treated as joint employers, reducing litigation exposure, compliance costs, and regulatory uncertainty.
Franchisees are affirmed as independent business owners with control over day-to-day operations and labor relations, preserving entrepreneurial autonomy for local owners.
The bill clarifies franchisor responsibilities to set and enforce uniform quality and marketing standards, helping protect brand value and consumer expectations.
Low‑wage employees and union members will have reduced ability to hold franchisors jointly responsible for labor violations, and franchisors may restructure relationships to evade liability, weakening worker protections and remedies.
Labor unions and enforcement agencies will have less leverage to address systemic labor issues across franchised chains, making it harder to enforce workplace standards at scale.
Some franchisees could shoulder higher operational and compliance costs (quality control, marketing enforcement) and increased business risk if franchisors' reduced liability shifts more responsibilities to local owners.
Based on analysis of 4 sections of legislative text.
Narrows joint‑employer liability for franchisors under the NLRA and FLSA by requiring "substantial direct and immediate control" over key employment terms.
Amends federal labor laws to create a narrower, franchise‑specific joint‑employer test so franchisors are a joint employer only when they exercise "substantial direct and immediate control" over essential terms and conditions of a franchisee’s employees. The change adds definitions for franchising and essential employment terms, applies the same rule to the NLRA and FLSA, and excludes pre‑enactment proceedings from the new rule.
Official title: To preserve the franchise business model.
Introduced September 10, 2025 by Kevin Hern · Last progress September 10, 2025