IFA Coalition Pushes Congress to Pass American Franchise Act

The International Franchise Association coordinated a coalition letter from more than 100 business, advocacy, and diversity organizations urging Congress to pass the American Franchise Act. The legislation, introduced in September with bipartisan support, would lock in a clear federal joint employer standard specific to franchising and end what the IFA describes as a decade of changing rules that have raised costs and legal exposure for local owners.

What the Joint Employer Standard Actually Controls

Joint employer doctrine determines whether a franchisor can be held liable for labor practices at franchisee locations. When the standard is broad, it exposes brand headquarters to wage claims, union organizing, and NLRB actions at stores they don't directly operate. A franchise-specific standard codified in law would draw a cleaner line: franchisors set brand standards, franchisees run the business and carry the employment relationship.

Why the Coalition's Breadth Matters

The 69 state associations and 33 national organizations signing the letter include franchisee groups representing KFC, Dunkin, and McDonald's operators. That alignment matters politically: it signals that the concern isn't coming only from brand-side executives but from the independent small business owners who actually run the locations. Bipartisan cosponsorship in the House, including a former McDonald's franchisee, gives the bill a credible path forward.

Operational Consequences for Multi-Unit Operators

For operators running multiple locations, an unstable joint employer standard creates structural problems in hiring, HR policy, and legal exposure that can't easily be absorbed at scale. Multi-unit franchisees have more to lose from regulatory ambiguity than single-unit owners because the risk compounds across every location in the portfolio. Passage of the AFA would let operators build HR infrastructure without the prospect of a rule change invalidating it.