TLPA – A Real Solution for Local Businesses

TLPA – A Real Solution for Local Businesses  

On August 1, 2019, the Trademark Licensing Protection Act of 2019 (TLPA) was introduced in the Senate by Senators Angus King (I-ME), James Lankford (R-OK), John Cornyn (R-TX), Kyrsten Sinema (D-AZ), Joe Manchin (D-WV), Mike Braun (R-IN) and Kevin Cramer (R-ND).

The House soon followed suit, with Reps. Steve Chabot (R-OH), Henry Cuellar (D-TX), Doug Collins (R-GA), Lou Correa (D-CA), and Ben Cline (R-VA).

Together, these bills represent a major step forward for franchising in America.

Because of the nature of the franchise business model, franchise businesses rely on their trademarks to assure consumers that they can expect consistency regardless of the location of the franchise establishment. Whether it be in Atlanta or San Francisco customers can expect uniform standards of safety, and quality across all locations.

That’s because franchising grants a local owner the right to use a name brand company’s trademark, to produce and market a good or service. Franchise businesses are required to uphold these brand standards, but under the recent ambiguous joint employer standard, they are sometimes held liable for their efforts to maintain these standards.

A study conducted by the IFA revealed that franchise businesses have seen a 93 percent increase in lawsuits due to this type of legal uncertainty. The TLPA seeks to resolve this uncertainty in federal law by reaffirming that brand standards designed to preserve or enhance the brand may not be used as evidence of employment controls in litigation.

With the introduction of this bill in the Senate and House, our elected officials have proposed a real solution to this complicated issue. America’s 733,000 franchise establishments can benefit through TLPA’s help to foster stronger relationships between franchise brands and franchise owners by allowing their contract terms to be in harmony with laws related to brand protection and labor employment.