Bill > HR5267

This bill aims to preserve the franchise business model by clarifying the legal definition of joint employment in franchise relationships. The bill defines a franchise as a commercial relationship where a franchisee operates an independent business using a franchisor's system, trademarks, and operational standards. Recognizing the significant economic impact of franchises (approximately $825 billion in economic output and 8.4 million workers in 2022), the bill seeks to protect franchisees' independence while preventing overly broad interpretations of joint employer liability. It amends the National Labor Relations Act and Fair Labor Standards Act to establish that a franchisor can only be considered a joint employer if they exercise "substantial direct and immediate control" over essential employment terms like wages, benefits, hiring, and supervision. The bill carefully defines what constitutes such control, explicitly stating that routine brand standards, training materials, and general business recommendations do not automatically create a joint employment relationship. Importantly, the bill's provisions will only apply to legal proceedings commenced after its enactment, ensuring it does not retroactively impact existing cases. The overall intent is to provide legal clarity that protects the traditional franchise business model and reduces potential legal risks for franchisors.

Education

https://www.congress.gov/bill/119th-congress/house-bill/5267/all-info