House · HR 5267 · 119th Congress
American Franchise Act
Summary
The American Franchise Act changes the legal definition of when a franchisor can be held jointly responsible for how a franchisee treats its workers. Under this bill, a franchisor is only liable if it directly and regularly controls key job conditions like pay, hours, or firing. This affects millions of franchise workers and the large companies behind franchise brands.
In Favor
Franchise owners run their own businesses day to day and should be responsible for their own workers. This bill stops large franchisors from being pulled into legal disputes over employment decisions they did not actually make. That lets the franchise model keep creating jobs without the threat of unfair legal exposure.
Against
This bill makes it much harder to hold large franchisors accountable when their required standards push franchisees toward breaking wage or labor laws. Workers harmed by those policies may only be able to sue the smaller franchisee, who often cannot pay large damages. That leaves workers with fewer real options for justice.
Additional Considerations
Purpose & Problem
Is the problem real and worth federal action?
This bill sets a narrow definition of when a franchisor counts as a joint employer of a franchisee's workers under federal labor and wage laws. It targets disputes where franchisors faced liability for employment decisions made by their franchisees.
Scope & Related Provisions
Does it stay focused, or carry unrelated add-ons?
The bill's provisions stay on topic, focusing entirely on joint employer rules for franchise relationships under two laws: the National Labor Relations Act and the Fair Labor Standards Act.
Who Is Affected
Who benefits, and who bears the cost?
Franchisors gain clearer limits on their legal liability for franchisee employment decisions. Franchisees remain solely responsible for day-to-day employment choices. Workers may have fewer legal paths to hold franchisors directly accountable.
Cost & Funding
Is it affordable and responsibly funded?
The bill does not authorize or appropriate any federal funds. It shifts compliance and legal costs by changing which parties courts can hold responsible under existing labor and wage laws.
Risks & Implementation
What could go wrong in practice?
The bill ties its definitions to a specific Code of Federal Regulations section, so any future regulatory change to that section could affect how the law applies. Courts and agencies would need to apply new, detailed definitions in real cases.
For the actual bill text, see congress.gov.
AI-generated · Published 10/12/2026