IFA Praises Updated Independent Contractor Rule as “Essential to Franchising”

Proposed independent contractor rule aligns with the franchise model and safeguards the investments of U.S. small business owners navigating the tight labor market

WASHINGTON, D.C. – Today, the International Franchise Association (IFA) issued the following statement after the U.S. Department of Labor (DOL) issued a notice of proposed rulemaking rescinding the 2024 independent contractor rule and replacing it with a framework similar to the 2021 rule:

“The independence of franchise owners is essential to franchising, and we applaud the Department of Labor for providing clarity to protect the integrity of the franchise model and the entrepreneurial spirit that defines it,” said Michael Layman, IFA Chief Advocacy Officer. “This rule recognizes that franchisees operate as independent business owners rather than employees of their brands, and safeguards the investments of small business owners across the country who rely on independent workers to fill talent gaps in an increasingly competitive labor market. The updated rule supports businesses on Main Street, and IFA looks forward to submitting comments to the Department.”

IFA released its annual Franchising Economic Outlook showing that franchise businesses enter 2026 positioned for continued growth after a 2025 marked by of macroeconomic turbulence. The Economic Outlook projects franchise output rising by 1.6%, exceeding $920 billion dollars, and nearly 8.9 million jobs.

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About the International Franchise Association:

Celebrating over 60 years of excellence, education, and advocacy, the International Franchise Association (IFA) is the world’s oldest and largest organization representing franchising worldwide. IFA works through its government relations and public policy, media relations, and educational programs to protect, enhance and promote franchising and the approximately 832,000 franchise establishments that support nearly 8.8 million direct jobs, $907.3 billion of economic output for the U.S. economy, and almost 3 percent of the Gross Domestic Product (GDP). IFA members include franchise companies in over 300 different business format categories, individual franchisees, and companies that support the industry in marketing, law, technology, and business development.