After a decade of regulatory chaos, local franchise business owners are fighting to protect what they’ve built. The bipartisan American Franchise Act offers a clear way forward.
Issue History
Small Business Owners Have Regulatory Whiplash
Imagine investing your life savings to open a business, only to have the fundamental rules of how you can operate change every few years. Not because you did anything wrong, but because Washington can’t make up its mind. That’s the reality facing franchise owners across America.
The bottom line: You can’t build a 10-year business plan when the foundational rules change every 4 years. Regulatory whiplash destroys franchise owners’ ability to plan, invest, and grow.
BEFORE 2015
Stability
Franchisors were only responsible for workers they directly hired and managed. This meant they could freely help franchisees with in-store training and business guidance without legal risk.
2015-2020
Browning-Ferris Expansion
The National Labor Relations Board (NLRB) changed the rules so that even indirect involvement could make franchisors legally responsible for franchisee employees. The vague new standard triggered a 93% jump in litigation costs as everyone tried to figure out what was now considered “control.”
2020
Temporary Relief
After years of this chaos, a new NLRB rule said franchisors were only responsible if they had direct, hands-on control over hiring, firing, and wages. The industry stabilized, but everyone knew the rule could change again with the next administration…
2023
Crisis Returns
And so it did. The NLRB went back to the 2015 approach. Franchisors faced legal exposure again, forcing another round of lawsuits and uncertainty.
2024
Another Reversal
A federal court blocked the 2023 rule. A win for franchising, but it highlighted the core problem: as long as the rules come from agencies and courts instead of Congress, they’ll keep changing with each new administration. Businesses can’t plan when the foundation shifts every 4 years.
2025
A Legislative Solution
The American Franchise Act would write the rule into federal law. Congress makes it the standard permanent, ending the back-and-forth that’s caused so much uncertainty for franchise business owners.
$33.3B
Lost annually
as franchise businesses struggle to absorb expanded liability
376,000
Jobs eliminated
due to regulatory confusion
93%
Spike in litigation costs
under unclear joint employer standards
Who’s
Affected?
Regulatory whiplash doesn’t hurt distant executives. It hurts local small business owners in communities like yours.
In fact, 85% of them own or operate their business in the community where they live.
The American Franchise Act: Clarity, Not Chaos
The American Franchise Act (H.R. 5267) doesn’t change the fundamental relationship between franchisors and franchisees. It simply clarifies what’s always been true: providing support for franchisees is not the same as controlling their employees.
For Catie, who owns and operates an Aroma Joe’s in Maine, that clarity matters, and The American Franchise Act protects her independence.
How? By establishing that a franchisor is a joint employer ONLY if they exert substantial, direct, and immediate control over essential employment terms–things like hiring, wages, or work schedules…
That’s not corporate. That’s Catie.
The AFA is a
Win-Win-Win
The AFA is a
Win-Win-Win
Get support you need
●
Clear rules mean you can plan long-term investments with confidence
●
Focus on running your business, not tracking regulatory changes
Work for businesses that have access to better training and safety resources
●
Employment terms set by local owners
●
Stability in the business model means job security
Decisions made by neighbors, not distant executives
●
Franchise model remains accessible to first-time, minority, and veteran entrepreneurs
●
Economic activity stays rooted in Main Street
Coalition Partners
This isn’t just a policy issue.
It’s about the future of Main Street entrepreneurship.
The more people understand what’s at stake, the harder it is for regulatory chaos to continue.
Share this page on social, or take action and write to your members of Congress today. Let’s make sure everyone understands what independent ownership really means, and what it takes to protect it.
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