No. The American Franchise Act (AFA) does not affect workers’ ability to hold franchisors or franchisees accountable under the appropriate circumstances. The American Franchise Act  also adds clarifying language regarding situations in which a franchisor may be held jointly liable under the Fair Labor Standards Act (FLSA) and National Labor Relations Act (NLRA).

A franchisor may be considered a joint employer only if it possesses and exercises substantial direct and immediate control over one or more essential terms and conditions of employment of the employees of a franchisee.

• Preserves accountability: A franchisor may still be jointly liable when it actually determines wage rates, benefits provided, work schedules or disciplinary action for a franchisee’s employees. Nothing in the bill limits a franchisee’s own liability for wage-and-hour violations, or the remedies available to workers against the business that employs them.

• Protects independent franchise businesses: Franchisees operate independently, hiring their teams and running their businesses day to day.

• Clarifies brand standards and support: Setting minimum standards for brand protection, including protection of the franchisor’s trademarks and intellectual property, and offering training materials or other operations resources do not amount to direct and immediate control.

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