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The International Franchise Association (IFA) applauded the U.S. House Education and Workforce Committee's passage of the American Franchise Act (H.R. 5267), the top legislative priority for America's franchise business community. The legislation, which now heads to the House floor for consideration, would provide long-term stability to the joint-employer standard that has changed four times in the past decade.
"America's local franchise owners deserve certainty, and today, Congress is one step closer to providing it," said Michael Layman, IFA chief advocacy officer. "After a decade of changing regulations that has put the entire franchise model at risk, the American Franchise Act is the solution hundreds of thousands of franchise owners and their employees need to end this needless whiplash, which has cost jobs and Main Street business growth. We thank Chairman Walberg and the committee members—the majority of whom are cosponsors of the AFA—for advancing this legislation that will prevent the franchise model from being taken away from entrepreneurs by overzealous regulators and their ideological backers. In America's 250th year, the American Franchise Act will protect the next generation of franchise entrepreneurs."
Introduced in the U.S. House in September 2025 by seven Republicans and seven Democrats, the American Franchise Act would codify a commonsense joint-employer standard for franchisors and franchisees by clarifying that "a franchisor may be considered a joint employer of the employees of a franchisee only if the franchisor possesses and exercises substantial direct and immediate control over one or more essential terms or conditions of the employees of the franchisee."
The American Franchise Act only applies to joint-employer determinations within the franchisor-franchisee relationship. The joint-employer standard has changed four times in the last decade with each change in presidential administration.
The American Franchise Act has 142 bipartisan cosponsors in the House, and companion legislation has been introduced in the U.S. Senate. The bill is supported by all major franchisor and franchisee groups, as well as more than 100 state and local business, diversity, and industry groups. In 2025, there were 832,000 franchised small businesses in the U.S., employing 8.8 million people, generating $907.3 billion in economic output, which provides higher wages, better benefits, business ownership opportunities, and community impact.
"As a franchisee for over 25 years operating businesses across four states, I've seen firsthand how changes to joint-employer rules create uncertainty, making it harder to plan, invest, and grow careers," said Gary Robins, franchisee of Supercuts and Waxing the City and IFA vice chair. "The American Franchise Act would provide the long-term certainty franchisees need while preserving our independence as local business owners, so we can focus on our business and the people we serve. The AFA is the most important piece of franchise legislation Congress can pass."
"The UPS Store supports the American Franchise Act as it preserves the independence of franchise owners and creates a stable, predictable framework that supports small business growth and job creation by codifying the current NLRB rule," said Sarah Casalan, president of The UPS Store and an IFA franchisor member. "This clarity is needed for franchising across the country, including our 5,500-plus The UPS Store locations that are independently owned and operated. These small business owners serve as critical hubs in their communities, helping other small businesses grow and thrive. The American Franchise Act would provide the stability needed to protect this model, empower entrepreneurs, and expand access to small business ownership. It reinforces The UPS Store idea that business owners can go into business for themselves but not by themselves."
Recent data from Morning Consult shows Americans nationwide support the franchise model and want it protected with the American Franchise Act, including:
The full text of the legislation is available here.