Momentum Grows for American Franchise Act with Problem Solvers Caucus Endorsement

Led by Reps. Chuck Edwards and Don Davis, bipartisan group signals support for commonsense legislation which has grown to 77 cosponsors in the U.S House

WASHINGTON, D.C. – The International Franchise Association (IFA) today applauded an endorsement of the American Franchise Act, H.R. 5267, by the Problem Solvers Caucus, a bipartisan group of members of the U.S. House of Representatives, “committed to advancing commonsense solutions to key issues facing our nation.” The endorsement signals the strong bipartisan support for the legislation, which would provide legislative clarity to America’s 831,000 franchised businesses that have had to navigate four different joint employer standards in the past decade.

“The Problem Solvers Caucus endorsement validates the bipartisan nature of this bill and shows that moderate House members on both sides of the aisle are ready to support this measure becoming law,” said IFA President and CEO Matt Haller. “The American Franchise Act would provide hundreds of thousands of small businesses with certainty to operate, create jobs, and give back to their communities without the fear of a changing joint employer standard every four to eight years. We appreciate the Problem Solvers Caucus’ recognition that this legislation should be a priority to protect franchised small businesses in every community across the nation.”

The Problem Solvers Caucus is comprised of 45 U.S. House Members, split by Republicans and Democrats, working to find common ground on issues and legislation. This endorsement was led by Problem Solvers Members U.S. Reps. Chuck Edwards (R-NC) and Don Davis (D-NC), original cosponsors for the American Franchise Act.

The American Franchise Act, which was introduced in the U.S. House in September by seven Republicans and seven Democrats, led by Davis and U.S. Rep. Kevin Hern (R-OK), has now secured 77 cosponsors in the House. A bipartisan Senate companion (S. 3525) was introduced in December. The legislation would provide clarity to the joint employer standard in a franchise relationship, which determines when two entities share responsibility for violations of the National Labor Relations Act (NLRA) and Fair Labor Standards Act (FLSA). The federal joint employer standard has changed four times over the last decade based on political control of the White House.

The American Franchise Act applies only to the franchisor-franchisee relationship and does not affect joint employer determinations outside of franchising. The legislation clarifies that, “a franchisor may be considered a joint employer of the employees of a franchisee only if the franchisor possesses and exercises substantial direct and immediate control over one or more essential terms or conditions of the employees of the franchisee,” consistent with the National Labor Relations Board’s (NLRB) 2020 joint employer rule, which remains in effect today.

The full bill text is available here. A summary of the legislation is available here.

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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 831,000 franchise establishments that support nearly 8.8 million direct jobs, $896.9 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.