No. The American Franchise Act (AFA) applies only to the franchise relationship. It is a narrow solution that does not cover other business models outside of franchising. The American Franchise Act applies solely to franchisors and franchisees alleged to be joint employers under the Fair Labor Standards Act (FLSA) and National Labor Relations Act (NLRA). In plain terms, it addresses when a franchise brand may be treated as an employer of workers at a locally owned franchise business.

• Applies to franchise relationships: The American Franchise Act only applies to the franchise relationship, clarifying when a franchisor may be considered a joint employer of a franchisee’s employees.

• Does not cover other liability tests: The legislation does not extend to independent-contractor relationships, or other business models outside franchising.

• Does not apply retroactively: The AFA expressly states that its provisions do not apply retroactively. Put simply, it would not govern lawsuits or administrative cases already underway when the law takes effect.

• Source: https://www.franchise.org/advocacy/american-franchise-act/
• Source: https://www.franchise.org/wp-content/uploads/2026/05/AFA-Backgrounder-2026.pdf