The American Franchise Act (H.R. 5267) aims to clarify the legal relationship between franchisors (companies that grant franchises) and franchisees (individual business owners who operate under a franchisor's brand). The bill specifies that a franchisor is considered a 'joint employer' of a franchisee's employees only if it has and exercises substantial direct and immediate control over essential employment terms, such as wages, benefits, work hours, hiring, discipline, and supervision. This clarification seeks to provide consistency and reduce legal uncertainties in the franchise business model.
Supporters, including the International Franchise Association (IFA), praise the bill for offering long-term certainty to the joint employer standard, which has fluctuated over the past decade. They argue that the legislation will protect the franchise model, support small business growth, and prevent job losses by ensuring that franchisors are not held liable for employment decisions made by independent franchisees. The IFA has highlighted the bill as a top legislative priority, emphasizing its importance for the stability of the franchise sector.
Critics express concern that the bill may weaken worker protections by making it more challenging to hold franchisors accountable for labor violations committed by franchisees. They argue that by narrowing the definition of 'joint employer,' the legislation could allow franchisors to evade responsibility for ensuring fair labor practices within their franchise networks. This could potentially lead to a reduction in workers' rights and hinder efforts to address labor abuses in franchised businesses.
The analysis of H.R. 5267: American Franchise Act reveals no direct industry overlaps between the sponsor Kevin Hern's top donor industries and the bill's subject matter. The lobbying activity in the policy area includes various entities, such as the Marshfield Clinic Health System, which contributed $60,000, and the Coalition for the Use of Safe and Efficient Refrigerants, which contributed $20,000. However, these contributions do not indicate a direct conflict with the franchise industry, as they pertain to healthcare and refrigerant safety rather than franchise operations. Therefore, the risk of conflicts of interest appears low, as the financial interests of the donors do not align with the provisions of the bill.
Organizations that lobbied on issues related to this bill's policy area.
| Client | Lobbying Firm | Amount |
|---|---|---|
| NATIONAL ASPHALT PAVEMENT ASSOCIATION | NATIONAL ASPHALT PAVEMENT ASSOCIATION | $150,000 |
| MARSHFIELD CLINIC HEALTH SYSTEM | MARSHFIELD CLINIC HEALTH SYSTEM | $60,000 |
| SOUTHERN IONICS | KEY IMPACT STRATEGIES | $30,000 |
| COALITION FOR THE USE OF SAFE AND EFFICIENT REFRIGERANTS | WILLIAMSON LAW + POLICY PLLC | $20,000 |
| NATIONAL CONSUMER REPORTING ASSOCIATION | NATIONAL CONSUMER REPORTING ASSOCIATION | $5,000 |
| HEALING LODGE OF THE SEVEN NATIONS | HOBBS, STRAUS, DEAN & WALKER, LLP | undisclosed |
| PUEBLO OF SANTA ANA | HOBBS, STRAUS, DEAN & WALKER, LLP | undisclosed |
| TIGERSWAN | ALPHA STRATEGIES, LLC | undisclosed |
| LWRC INTERNATIONAL, LLC | ALPHA STRATEGIES, LLC | undisclosed |
| NATIVE VILLAGE OF EYAK | HOBBS, STRAUS, DEAN & WALKER, LLP | undisclosed |
| HEALTHCARE FINANCIAL MANAGEMENT ASSOCIATION | HEALTHCARE FINANCIAL MANAGEMENT ASSOCIATION | undisclosed |
| RMS OF GEORGIA, LLC D/B/A CHOICE REFRIGERANTS | WILLIAMSON LAW + POLICY PLLC | undisclosed |
| BRISTOL BAY AREA HEALTH CORP | HOBBS, STRAUS, DEAN & WALKER, LLP | undisclosed |
| COUNCIL OF ATHABASCAN TRIBAL GOVERNMENTS | HOBBS, STRAUS, DEAN & WALKER, LLP | undisclosed |
| ALEUTIAN PRIBILOF ISLANDS ASSOCIATION | HOBBS, STRAUS, DEAN & WALKER, LLP | undisclosed |
Source: Senate Lobbying Disclosure Act (LDA) filings, 2026
