Bill > S3525

This bill, titled the "American Franchise Act," aims to preserve the franchise business model by clarifying the definition of a "joint employer" in the context of franchising. It defines a franchise as a relationship where a franchisee operates an independent business using a franchisor's system, trademarks, and marketing plan, while emphasizing that franchisees control day-to-day operations and labor relations. The bill addresses concerns that inconsistent interpretations of "joint employer" liability, based on a franchisor's inherent control over its system, could harm the viability of franchising. To prevent this, it amends the National Labor Relations Act and the Fair Labor Standards Act to state that a franchisor can only be considered a joint employer of a franchisee's employees if the franchisor exercises "substantial direct and immediate control" over essential employment terms like wages, benefits, hours, hiring, discharge, discipline, supervision, and direction. The bill provides detailed definitions of what constitutes "direct and immediate control" for each of these terms, generally excluding actions a franchisor takes to maintain brand standards, offer operational guidance, or participate in employee benefit plans under arm's-length contracts. This clarification is intended to protect the franchise model, which contributes significantly to the U.S. economy and employment.

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https://www.congress.gov/bill/119th-congress/senate-bill/3525/all-info