(WASHINGTON, MARCH 9) – The International Franchise Association (IFA) today released the following statement on the House passage of the Protecting the Right to Organize Act, or PRO Act, far-reaching legislation that would drastically upend the American economy, particularly the franchise sector:
“Franchise small businesses are poised to lead our country’s economic recovery and are particularly well-suited to ensuring that hard-hit minority communities have access to the opportunity and equity they need to build back better. Unfortunately, the PRO Act jeopardizes that,” said Matt Haller, IFA Senior Vice President of Government Relations and Public Affairs.
“Put simply, this legislation could end the franchise business model. While the House vote today was disappointing, it was also expected. IFA hopes that the Senate will reject this overly-broad, overly-harmful approach and instead work constructively to improve worker outcomes and economic opportunity.”
Due to its national application of the “ABC Test” to the franchise business model, the PRO Act could effectively classify franchise owners as employees of the brand from which they franchise – upending the business model and dramatically restructuring the franchise sector with its roughly 800,000 small businesses.
Celebrating 60 years of excellence, education, and advocacy, the International Franchise Association 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 more than 733,000 franchise establishments that support nearly 7.6 million direct jobs, $674.3 billion of economic output for the U.S. economy, and 2.5 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.