By Jesse Keyser Missouri Times

On behalf of Missouri’s 16,600 franchise small business owners, I want to thank the bipartisan coalition of state lawmakers for supporting a state law with major positive implications for our local businesses – and any future franchise in the state. Sponsored by Rep. Matthew Overcast (R-155) and co-sponsored by Rep. Tonya Rush (D-67), HB 1068 codifies into law the appropriate standard of a regulation that uniquely applies to our businesses, known as the “joint employer.”

Joint employer defines the relationship between franchisors and franchisees. Think of the first group as a “simplifier” and the latter as a “multiplier.” A franchisor takes an idea or a concept and brings it to market in the most effective, efficient and successful manner. Then a franchisee has the opportunity to replicate that idea by investing in the business model, ultimately owning and operating their own business under the brand name with the autonomy to run an independent business.

HB 1068 clarifies that franchisors and franchisees are not “joint employers,” of the same set of employees. I hire, manage, and oversee my employees – and I am the one responsible for the day-to-day actions. This bill ensures that I remain in charge of my own business without turning it into a corporate entity – and provides much needed certainty down the road.

Small business owners thrive off stability and knowing what’s next. Unfortunately, for the joint employer standard at the federal level, we’ve had anything but predictability. In fact, there have been four different federal definitions of joint employer in the last decade alone. Under the Obama and Biden Administrations, unwise expanded joint employer standards from the National Labor Relations Board (NLRB) cost franchised businesses $33.3 billion per year, resulted in 376,000 lost job opportunities, and led to 93% more lawsuits.

Both iterations of the Trump Administration have pursued the more sensible definition of joint employer where a franchisee is not considered an employee of a franchisor. HB 1068 ensures that will always be the case and protects Missouri’s franchise community from potential shifting interpretations of joint employment in the future. This enables more brands to want to expand through franchising, and more franchisees to want to go into business.

When the threat of future overreach hangs over small business owners’ heads, workers pay the price. Less training and operational support, hesitation to support their franchisees for fear of liability, a more guarded relationship, reduced communication: these are some of the consequences of joint employer uncertainty. The fear in the system creates hesitancy among franchisors and a sense of abandonment for franchisees who lose key support systems. Joint employer uncertainty drives a wedge between franchisors and franchisees, shifting the relationship from a partnership to a legal liability concern.

Ultimately, consumers suffer too in the form of an inferior or more costly product – and weakened brand standards. When a customer comes into one franchise location, they expect the same quality as another. That becomes much harder when a franchisor is forced to reduce support.

By providing clear legal guidance, HB 1068 reinforces Missouri’s commitment to fostering a strong business environment. State agencies will benefit from clear legislative directions on how to oversee the franchise business model. Twenty-one other states have already enacted similar legislation, and passing HB 1068 will ensure Missouri remains a welcoming place for franchising to continue its upward trajectory.

In 2024, franchising contributed more than 175,000 jobs and $17.7 million dollars to Missouri’s economy. As an entrepreneur who owns and operates 50 franchises employing more than 350 people, no issue is more important to me than joint employer. This clarification is critical for franchise businesses currently operating in Missouri and those looking to expand into the state.

There’s a misnomer out there that the business community opposes all regulations from the government. While we tend to not like sweeping mandates that interfere with our day-to-day operations, we dislike uncertainty and stability even more.

HB 1068 is a commonsense step that everyone can get behind. I was pleased to see the legislation received an overwhelming and unanimous 13-0 vote out of the House Economic Development Committee and look forward to its continued momentum.

Jesse Keyser is Co-founder of Keyser Enterprises and operates more than 50 multi-franchise operations throughout the Midwest with his brother.

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