In 2015, the National Labor Relations Board (NLRB)’s Browning-Ferris decision expanded joint liability for franchise businesses. The decision departed from the longstanding joint employer standard based on direct and immediate control over essential terms and conditions of employment.

From 2015 through 2017, an expanded joint employer standard was in effect. That period was associated with a 93% increase in litigation against franchises, $33.3 billion in lost economic output, and 376,000 fewer franchise jobs.

The broader approach, and the whiplash of the changing standard, created uncertainty for franchisors and franchisees and disrupted the clear division of responsibility that supports the franchise business model.

• Expanded joint employer liability: The Browning-Ferris decision moved beyond the direct and immediate control standard that had governed franchise businesses for decades. By treating indirect control as relevant to joint employer determinations, the decision broadened the circumstances in which franchisors and franchisees could be held responsible for the same employees.

• Created uncertainty for franchise businesses: The broader framework left franchise brands uncertain whether support for independent franchisees and their employees could expose them to joint employer liability. This included education, training, compliance assistance, employee recognition programs, health and retirement plans, shared apprenticeship programs, and tuition support.

• Disrupted a longstanding division of responsibility: Before 2015, franchise brands could provide education, training, compliance assistance, employee recognition programs, and other resources with far less risk of being drawn into joint employer liability. The broader standard blurred the distinction between, on one hand, a franchisor’s role in providing brand protection, system standards, and training and, on the other hand, a franchisee’s day to day responsibility for managing employees.

• Source: https://www.franchise.org/wp-content/uploads/2026/05/AFA-Backgrounder-2026.pdf
• Source: https://savelocalbusinesses.com/wp-content/uploads/2026/07/CSLB-AFA-Myth-vs-Fact.pdf