US House committee advances American Franchise Act, a priority bill for global franchisors

The US House Education and Workforce Committee passed the American Franchise Act (H.R. 5267) on July 21, 2026, sending the bill to the full House for consideration after it returns from its August recess. The International Franchise Association (IFA), which represents franchisors, franchisees and suppliers, has named the legislation its top legislative priority for the current session of Congress.

The bill would write a single federal definition of the joint-employer standard into law — the rule that determines when a franchisor can be held legally responsible for the labor practices of an independently owned franchised location. The IFA argues the standard has shifted four times in the past decade under different administrations and agency rulings, creating uncertainty it says discourages franchise-based expansion.

The IFA frames the stakes in terms of the US franchise sector's scale: more than 832,000 franchise establishments supporting close to 8.8 million direct jobs and an estimated $907.3 billion in economic output, according to figures the association has cited alongside the bill. A companion bill is already pending in the Senate, meaning the legislation would still need Senate passage and a presidential signature to become law even if the full House approves it.

While the bill is domestic US legislation, its progress is being watched by international operators too: a stable, codified joint-employer standard would remove one of the recurring legal uncertainties that master franchisees and foreign brands weigh when structuring a US market entry, alongside more familiar factors like site economics and territory pricing.