The National Labor Relations Board (NLRB) has radically threatened to change the franchise model between independent franchisees and franchisors. This definition separating independent franchisees and franchisors has been legally protected for 30 years – defined by “actionable” control over an independent entity. The new definition is “ability” to control, and can imply employee liability for both an entity and a franchisee or 3rd party agency (staffing, services, etc).
This new standard could destroy the franchise model: businesses could close – or worse yet, people will avoid becoming franchisees altogether due to loss of the independence and ability to run their own business.
The American Pizza Community supports the Protecting Local Business Opportunity Act (S. 2015 and H.R. 3459), legislation that would simplify the definition of the joint employer standard and bring clarity to small business owners and other employers in all industries while clarifying protections for American workers.
Franchising is a unique business model that has enabled millions of Americans to be employed by local, independent companies. Today there are more than 730,000 franchise businesses. Nearly 70 percent of all pizza stores are independently-owned and operated. Even big national brands are locally-owned by franchisees.
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