The American Franchise Act: New bill offers a landmark step for franchise independence

Anyone who has attended an International Franchise Association (IFA) event this year has likely heard me describe 2025 as the “Year of Franchising.” At the outset of the year, IFA outlined a bold, go-big agenda for franchising. Our 2025 Roadmap for Small Business Growth set ambitious yet achievable legislative priorities to strengthen the franchise model and protect small business owners.

Already, our efforts have delivered meaningful and tangible results. This summer, Congress extended key small business tax provisions, ensuring a tax code that supports franchise development and wage growth. In California, IFA supported landmark legislation improving franchisee disclosures to promote Responsible Franchising, a policy that could serve as a model for other states. IFA also led a successful effort to repeal the Corporate Transparency Act while championing the bipartisan GENIUS Act, advancing fairness for Main Street businesses. And throughout the year, IFA has worked to prevent the spread of harmful, state-based employment and labor policies that threaten the franchise model.

Now, the focus has turned to the most important priority of them all: codifying a clear and permanent joint-employer standard that preserves franchisee independence.

In September, a bipartisan group of lawmakers in the U.S. House of Representatives introduced the American Franchise Act (AFA), a first-of-its-kind piece of legislation that affirms franchisees are small business owners and that their independence must be protected by federal law.

Seven Democrats and seven Republicans signed on at the bill’s introduction, which is a momentous accomplishment because fewer than 3% of the 11,000 bills introduced during a Congress have more than seven original cosponsors on each side of the aisle. The AFA is intentionally narrow and standalone, only applying to the franchisor-franchisee relationship and not affecting joint-employer determinations outside of franchising. The decision was made to keep the bill focused so that it would garner strong bipartisan support.

The bill is designed to bring stability to the federal joint-employer standard, which has shifted four times in the past decade, depending on political control of the White House. For franchisees, that constant uncertainty has been more than a headache: It has complicated hiring, investment, and long-term planning, leaving owners unsure of how future administrations might treat their businesses.

For the one in three franchisees who would not own a business without the support of franchising, this bill provides much-needed clarity and confidence to grow.

The introduction of the legislation came at a pivotal moment for the business model. IFA’s 2025 Advocacy Summit in Washington, D.C., held Sept. 15-17, brought together the entire franchise community from across the country to meet directly with lawmakers. Attendees made the case for the AFA to lawmakers, sharing how the instability of the joint-employer standard has stifled growth, limited hiring, and made reinvestment in local communities more difficult. Those conversations reinforced a powerful truth: When franchisees tell their stories, policymakers listen.

The introduction of the AFA is an important milestone, but much work remains to be done. Passing the legislation into law will require sustained advocacy and engagement from franchise owners across the nation. Together with its partners in the Coalition to Save Local Businesses, the American Hotel & Lodging Association, the National Restaurant Association, and other allies, IFA has launched a nationwide campaign to build momentum. But the most powerful voices in this effort belong to franchisees and franchisors themselves.

The stakes are especially high for multi-unit operators. A stable joint-employer standard is essential to protecting independence, encouraging investment, and ensuring that the franchise model remains a pathway to entrepreneurship for future generations. Franchisees have a crucial role to play, including directly reaching out to elected officials, participating in IFA’s advocacy programs, and engaging local media to share the impact of franchising.

After a decade of back-and-forth, the days of joint-employer uncertainty may finally be numbered. The introduction of the AFA is more than just a legislative milestone; it represents a defining moment for the 831,000 franchise small businesses across the country. It is recognition that “Franchise Means Local” and that protecting it means preserving opportunity, growth, and community impact in every corner of America.

For franchisees, now is the time to step forward, speak up, and help secure the future of franchising.

Matt Haller is president and CEO of the International Franchise Association.