IFA Statement on HELP Committee Advancement of Anti-Franchising PRO Act

Government Relations

IFA Statement on HELP Committee Advancement of Anti-Franchising PRO Act

Legislation put existence of franchising in jeopardy, cautions legislators from supporting bill that threatens America’s 800,000 local franchises; Instead urges support for pro-franchising bills

WASHINGTON – The International Franchise Association (IFA) today released the following statement after the Senate Health, Education, Labor and Pensions Committee passed the Protecting the Right to Organize (PRO) Act (S. 567), the most anti-franchise, anti-small business piece of legislation in Congress, on party lines. Instead, IFA urged support for the Save Local Business Act and the Protections for Socially Good Activities Act, which were offered as amendments today and would protect franchises from unworkable joint liability standards.

“The PRO Act puts the very existence of franchising in jeopardy – and is a grave threat to all small businesses,” said Michael Layman, IFA senior vice president of government relations and public affairs. “Fortunately, today’s committee passage of the job-killing PRO Act is merely symbolic. We urge all U.S. Senators to oppose the PRO Act on behalf the 800,000 franchise small businesses that are pillars in nearly every community in the country.”

Among other provisions, the PRO Act would codify a harmful joint employer standard that would take away the independence of franchise business owners, the hallmark of the franchise business model. In addition, it would institute a three-part, so-called “ABC test” to determine when individuals can be classified as independent contractors, with language broad enough franchisees could be considered employees of their brands, rather than the independent business owners they are.

IFA joined 31 business organizations in a letter of opposition to the PRO Act, as well as the other two pieces of legislation passed today by the committee, the Healthy Families Act (S. 1664) and the Paycheck Fairness Act (S. 728), urging the Committee to “find long-term solutions that will be mutually beneficial to employees and employers alike.”

Instead, IFA applauded the Save Local Business Act, as well as the Protections for Socially Good Activities Act, which were offered as amendments to the legislation, both of which would protect franchise small businesses against unnecessary overreach and costly litigation.

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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 790,492 franchise establishments that support nearly 8.4 million direct jobs, $825.4 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.

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