119-S-3525 Journalist Public Summary

Public Summary of S. 3525 — American Franchise Act

A quick, plain‑language overview of what the bill does, why it matters, who supports or opposes it, and what happens next.

Headline Summary: S. 3525 narrows when a brand can be deemed a “joint employer” of workers at a franchise location, generally requiring the brand to exercise substantial, hands-on control over key employment decisions.

What It Does: The bill amends the National Labor Relations Act and Fair Labor Standards Act to say a franchisor is a joint employer of a franchisee’s workers only if it both possesses and actually exercises “substantial, direct, and immediate” control over essential employment terms—like pay, benefits, hours, hiring, firing, discipline, supervision, and day‑to‑day direction. Routine brand standards (e.g., operating hours, training materials, marketing, or quality controls) would not, by themselves, make the franchisor a joint employer.

• Why It Matters:
• - For franchise owners: Offers clearer legal lines and potentially fewer joint‑employer lawsuits, which could lower compliance risk and insurance costs.
• - For workers: Could make it harder to bring claims or organize against a national brand when problems arise at a local franchise, because the brand is only liable if it truly controls core employment terms.
• - For brands: Encourages setting and enforcing uniform brand standards without automatically creating joint‑employer liability.
• - For communities/consumers: Supporters argue this stability can preserve local small‑business ownership and consistent service; opponents worry it weakens accountability for labor violations at franchise locations.

• Who’s For It:
• - Lead sponsors: Sens. Roger Marshall (R‑KS), Angus King (I‑ME), James Lankford (R‑OK), Tim Sheehy (R‑MT), and Susan Collins (R‑ME). They frame the bill as protecting locally owned small businesses and clarifying liability so brands aren’t penalized for enforcing quality standards.
• - Many franchisors and franchise owners who say the franchise model depends on clear separation of roles between brand and local employer.

• Who’s Against It:
• - Labor unions and worker‑advocacy groups who argue it would make national brands less accountable for wage‑and‑hour violations or unfair labor practices at franchise locations and could hinder workers’ ability to bargain with the entity that has real economic power.
• - Some lawmakers who favor a broader joint‑employer standard, saying modern franchising often gives brands effective control over local workplaces even without day‑to‑day supervision.

What’s Next: The bill was introduced in the Senate on December 17, 2025, referred to the Health, Education, Labor, and Pensions (HELP) Committee, and the committee held hearings on March 19, 2026. It remains in committee; next steps would be a committee markup and vote, followed by floor consideration, House action, and the President’s decision.