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Franchise Protection: Clear Employment Rules for Franchisees

This Act aims to protect the franchise business model by clearly defining when a franchisor can be considered a joint employer of a franchisee's employees. These changes are intended to prevent franchisors from being held liable for the personnel decisions of franchisees, which could negatively impact the growth and stability of small franchise businesses. As a result, citizens operating franchises will gain greater legal certainty in managing their employees.
Key points
The Act specifies that a franchisor is a joint employer only if it has direct and substantial control over essential terms and conditions of employment, such as wages, benefits, hours, hiring, discharge, discipline, supervision, and direction of the franchisee's employees.
It clarifies that standard franchisor activities, like setting operating hours, minimum safety standards, or offering training materials, do not make them a joint employer.
The changes aim to provide stability and predictability for franchisees, protecting their independence in personnel management and reducing legal risks for franchisors, which may foster job creation.
article Official text account_balance Process page
Introduced
Citizen Poll
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Additional Information
Print number: 119_HR_5267
Sponsor: Rep. Hern, Kevin [R-OK-1]
Process start date: 2025-09-10
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Summarized by: gemini-2.5-flash-preview-05-20
Source data: api.congress.gov
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OFFICIAL LEGAL TITLE

American Franchise Act

FREQUENTLY ASKED QUESTIONS

What is the official ID of this bill?

The official print number for this legislation is 119_HR_5267.

Which chamber initiated this legislation?

This legislation was initiated in the House of Representatives.

When did the legislative process begin?

The process officially started on 2025-09-10.

What are the main provisions?

Key points include:

  • The Act specifies that a franchisor is a joint employer only if it has direct and substantial control over essential terms and conditions of employment, such as wages, benefits, hours, hiring, discharge, discipline, supervision, and direction of the franchisee's employees.
  • It clarifies that standard franchisor activities, like setting operating hours, minimum safety standards, or offering training materials, do not make them a joint employer.
  • The changes aim to provide stability and predictability for franchisees, protecting their independence in personnel management and reducing legal risks for franchisors, which may foster job creation.
What is the specific legal status?

The current status is Introduced.

Where can I read the full text of this legislation?

The full official text is available at: View full text

Who is the primary sponsor?

The primary sponsor is Rep. Hern, Kevin [R-OK-1].

What is the latest detailed status?

The latest detailed status is: Referred to the House Committee on Education and Workforce.

Is this summary verified?

Yes. This content was analyzed by AI and verified by the Lustra Judge System on 2025-12-23.

CATEGORIES

Labor Economy