Franchise bill shields big brands from worker liability claims
S. 3525 — American Franchise Act · Filed by Roger Marshall (R-KS) · 4 cosponsors · Introduced Dec 17, 2025 · Hearing held
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What it does
This bill amends federal labor law to define when a franchisor (the company that owns a brand like McDonald's) can be held legally responsible as a 'joint employer' of workers employed by franchisees (the independent business owners who run individual locations). Under current law, courts have increasingly found franchisors to be joint employers when they exercise significant control over working conditions. This bill narrows that definition: a franchisor is a joint employer only if it exercises 'substantial direct and immediate control' over wages, hours, hiring, discipline, or other core employment terms—and it carves out many forms of control (setting brand standards, providing training, enforcing safety rules, recommending staffing levels) as NOT counting as joint-employer control. The effect is to shield franchisors from labor liability and collective bargaining obligations even when they tightly control franchise operations.
Why we flagged it
The bill's operative mechanism is to redefine 'joint employment' in labor law in a way that exempts franchisors from liability for franchisee-employee labor claims. While framed as a 'clarification' of existing law, it functionally narrows worker and franchisee protections by carving out franchisor control activities (brand standards, training, safety rules, staffing guidance) from the definition of joint-employer control.
What the text implies
- The carve-outs for 'brand standards,' 'training materials,' 'minimum training requirements,' and 'operational support' allow franchisors to exercise granular control over how franchisee employees work without triggering joint-employer status—effectively legalizing indirect control while avoiding labor liability.
- Franchisees may find themselves unable to challenge franchisor control as an unfair labor practice or to organize collectively with other franchisees, since the franchisor is no longer a joint employer and thus not subject to NLRA duties.
The full analysis lists 4 implications of this text.
Who stands to gain
large franchise systems (QSR, hospitality, retail); franchisors with tight operational control models