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Indiana Governor Mike Pence is the latest to sign a state bill clarifying that a franchisor is not the employer of a franchisee or of a franchisee's employees under Indiana's employment laws. He signed House Bill 1218 in late March.
Specifically, the legislation establishes that an employee of a franchisee is not an employee of the franchisor. Furthermore, the measure outlines that it is the franchisee that is responsible for the employment relationship including hiring, firing, discipline, supervision and direction of the employee. The franchisee and franchisor are considered separate entities and therefore not joint employers.
Indiana joins nearly a dozen other states that have already passed similar legislation or are considering actions to protect local franchises against federal government overreach.
"These state bills are a line in the sand and make clear that the current franchise model works and provides tremendous economic benefits for the citizens in these states," said IFA President & CEO Robert Cresanti. "More states are moving forward with clarifying the independent status of franchisees."
"I am proud to be a business owner in Indiana," said Michael Kile, owner of AlphaGraphics in Carmel. "The franchise model has allowed me to be able to do what I love and help many people improve their business communications along the way. I appreciate that Governor Pence and the Indiana legislature understand the importance of franchising and support a bill which allows locally owned businesses like ours to continue to make a difference in our community."