Problem Solvers Caucus Endorses American Franchise Act

WASHINGTON, D.C. – Today, the Problem Solvers Caucus announced its endorsement of the American Franchise Act (H.R.5267), bipartisan legislation to strengthen the franchise model by providing clear, consistent standards for franchisors under federal labor law

Franchise businesses are a major part of the U.S. economy, employing about 8.8 million workers and generating nearly $900 billion each year. But frequent changes in federal labor standards have created uncertainty for franchise owners and workers. This uncertainty has made it harder for these small, family-owned businesses to invest and plan for the future.

The American Franchise Act would provide clear, uniform standards for franchise relationships under federal labor law. It clarifies when a franchisor can be treated as an employer — making clear that joint employer liability applies only to situations where the franchisor directly controls essential terms and conditions of employment, such as hiring, firing, compensation, or scheduling. This approach reflects how franchise relationships operate in practice, with franchisors providing brand guidance and support while local owners manage day-to-day employment decisions

The bipartisan legislation is co-led by Representatives Kevin Hern (OK-01) and Don Davis (NC-01), and others. It currently has 74 cosponsors, 13 of whom are Members of the Problem Solvers Caucus. This bill was brought forward for Caucus endorsement by Representatives Chuck Edwards (NC-11) and Don Davis. 

The bill is endorsed by the International Franchise Association, the National Federation of Independent Business, the National Restaurant Association, the American Hotel & Lodging Association, the U.S. Travel Association, the U.S. Hispanic Chamber of Commerce, the U.S. Black Chambers, the National Taxpayers Union, and more than 90 additional groups. 

“In North Carolina, more than 30,000 franchises are employing over 328,000 workers and generating approximately $34 billion for our state economy. H.R. 5267, the American Franchise Act, provides much-needed stability for small business franchise owners,” said Congressman Don Davis (NC-01). “We thank the Problem Solvers Caucus for recognizing that this bill is rooted in fairness, opportunity, and ensuring entrepreneurs from every walk of life have a real shot at living the American Dream.”

“Small businesses are the backbone of our communities, and they deserve clear, consistent rules that allow them to succeed,” said Congressman Edwards (NC-11). “The American Franchise Act is a clear step toward providing the certainty franchise owners need to grow, invest, and continue creating jobs in communities across the nation.”

“Franchise owners and workers alike benefit from clear, consistent rules. For too long, uncertainty around federal labor standards has made it harder for small businesses to invest and grow. I’m proud the Problem Solvers Caucus has endorsed this commonsense bill to protect the franchise model and strengthen local economies in West Michigan and nationwide," said Congresswoman Hillary Scholten (MI-03).

“The Problem Solvers Caucus endorsement validates the bipartisan nature of this bill and shows that moderate House members on both sides of the aisle are ready to support this measure becoming law,” said IFA President and CEO Matt Haller. “The American Franchise Act would provide hundreds of thousands of small businesses with certainty to operate, create jobs, and give back to their communities without the fear of changing joint employer standard every four to eight years. We appreciate the Problem Solvers Caucus’ recognition that this legislation should be a priority to protect franchised small businesses in every community across the nation.”

"Restaurants are a cornerstone of the American economy, yet regulatory whiplash from ongoing changes to the ‘joint employer’ standard have created needless uncertainty for owners. We appreciate the Problem Solvers Caucus’ support for the American Franchise Act, which would establish a clear standard that strengthens entrepreneurship and drives economic growth nationwide,” said Sean Kennedy, Executive Vice President for Public Affairs, National Restaurant Association.

The full text of the bill can be found here.
 

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The Problem Solvers Caucus is a group of Members of Congress — split between Republicans and Democrats — committed to advancing common-sense solutions to key issues facing our nation.