With favorable committee vote, AFA moves to consideration by the full U.S. House, one step closer to certainty for America’s 832,000 franchise small businesses looking for long-term predictability and end of the regulatory whiplash around federal joint employer standard
WASHINGTON – Today, the Coalition to Save Local Businesses (CSLB), a group of local small business owners, franchise brands, and industry associations, issued the following statement after the U.S. House Committee on Education & Workforce voted to advance H.R. 5267, the American Franchise Act (AFA), for consideration by the full U.S. House of Representatives:
“Today’s milestone marks a major step toward long-term certainty for America’s franchised small businesses, and we grateful to Chairman Walberg for his leadership and the support from all our legislative champions,” said Erica Farage, spokesperson for the Coalition to Save Local Businesses. “Passing the AFA will end the regulatory whiplash around the federal joint employer standard that has needlessly harmed the nation’s 832,000 franchise businesses over the past decade. We remain committed to working with lawmakers on both sides of the aisle in moving this commonsense legislation through the legislative process so local franchises across this country can finally have the certainty they need.”
“Franchising is the backbone of the American hotel industry and a true path toward achieving the American dream,” said Rosanna Maietta, American Hotel & Lodging Association President & CEO. “For tens of thousands of hoteliers, franchising is the most accessible pathway to building a small business in America. AHLA is grateful to Chairman Tim Walberg and members of the committee for recognizing the need to preserve and strengthen this important pathway to entrepreneurship. We look forward to this legislation advancing to the House floor and urge Congress to swiftly pass it.”
“Restaurants are a cornerstone of the American economy, yet regulatory whiplash from ongoing changes to the ‘joint employer’ standard have created needless uncertainty for franchise owners,” said Sean Kennedy, Chief Advocacy Officer for the National Restaurant Association. “Today’s vote to advance the American Franchise Act to the full House is an important win for the restaurant industry that has the potential to strengthen entrepreneurship and drive economic growth nationwide.”
The American Franchise Act would codify the joint employer standard as requiring direct control of narrowly defined essential terms and conditions of employment, applying only to the franchisor-franchisee relationship and does not affect joint employer determinations outside of franchising. The legislation now has 142 bipartisan cosponsors in the U.S. House of Representatives and enjoys the support of more than 100 national and state business groups, including the Coalition of Franchisee Associations (CFA) representing the voice of thousands of independent franchisee owners across the nation.
According to survey data from Morning Consult, Americans across the political spectrum support the franchise model and they want it protected with the American Franchise Act, including:
- 72% who prefer shopping at franchises over corporate chains,
- 73% who support franchising as a way to grow brands, and
- 75% who want clear, consistent legal protections for small, family franchise owners like those contained in the American Franchise Act.
The full bill text is available here. A summary of the legislation is available here.
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The Coalition to Save Local Businesses is an initiative of the American Hotel and Lodging Association, American Pizza Community, the Association of Kentucky Fried Chicken Franchisees, CHRO Association, EPCON Communities, Family Enterprise USA, Family Business Coalition, the Health and Fitness Association, Home Care Association of America, the International Franchise Association, International Salon/Spa Business Network, International Spa Association, National Association of Black Hotel Owners, National Association of Convenience Stores, National Federation of Independent Business, Operators, and Developers, National Franchisee Association, National Restaurant Association, NATSO (National Association of Truckstop Operators), Professional Beauty Association, Small Business and Entrepreneurship Council, SIGMA: America’s Leading Fuel Marketers, and the U.S. Travel Association. Together, they are united in support of a transparent joint employer standard that reaffirms the independence of local franchise owners. Learn more at https://savelocalbusinesses.com/.