Ensuring Main Street Fairness and Stopping Burdensome Regulations

Franchises are more than just familiar brand names—they are locally owned small businesses that contribute to the economic vitality of our communities. Unfortunately, unfair policies and burdensome regulations often treat franchise businesses differently than their non-franchise counterparts, creating unnecessary obstacles to success.

IFA supports policies that promote fair treatment of franchises as the small businesses they are. In doing so, IFA advocates for federal, state and local policies that ensure local franchise owners can compete on a level playing field with other types of businesses and reduce unnecessary costs and regulatory headaches.

IFA opposes policies that would treat small business franchises differently than other small businesses. IFA also opposes policies that allow government to dictate or undermine the terms of private agreements between franchisees and franchisors, thereby reducing franchisee equity, damaging legally required brand standards and harming worker and consumer safety.

Key Issue Focus

Policies that Discriminate Against Franchises

Franchise businesses often face unfair treatment under labor laws that fail to recognize their local ownership structure. Two key areas where this occurs are minimum wage policies and predictable scheduling mandates:

  • Minimum Wage: Minimum wage policies impact all small businesses, but franchises often face additional challenges when lawmakers fail to recognize their local ownership. In several instances, localities have aimed to codify legislation that will accelerate the minimum wage level at a significantly faster pace for franchises than non-franchised businesses, putting locally owned franchise owners at a competitive disadvantage. These proposals and ordinances do so for no other reason other than the fact that these businesses are part of a franchise system. Under the franchise model, however, it is the franchisees who own the stores, not the corporate entities.
  • Predictable Scheduling: Predictable scheduling laws can impose rigid requirements that make it difficult for small businesses to adapt to real-time operational needs. Franchise businesses, like all small businesses, require flexibility to respond to customer demand, seasonal fluctuations, and employee needs.

Policies that Undermine Franchise Agreements

The franchise model has been a cornerstone of American small business success, allowing local entrepreneurs to operate under recognized brands while maintaining independent ownership. However, some legislative proposals aim to give state governments the authority to dictate the terms of franchise agreements. These bills would fundamentally alter the way franchises operate, restricting the ability of franchisors and franchisees to establish mutually beneficial agreements. IFA opposes such measures because:

  • Franchise agreements are private contracts: These agreements are voluntary and represent negotiated terms between two private parties. Government intervention undermines the ability of franchisors and franchisees to tailor their agreements based on their specific business needs.
  • Increased regulation stifles business growth: Overly prescriptive laws create uncertainty and reduce investment in franchise systems, ultimately harming entrepreneurs looking to enter the market.

Preserving Brand Integrity and Fair Competition

Franchise systems succeed when all participants adhere to the established standards that ensure quality, consistency, and customer trust. Government-imposed franchise relationship laws could allow underperforming or non-compliant franchisees to remain in the system indefinitely, negatively impacting:

  • Brand Reputation: A franchise’s reputation is built on maintaining high standards. If substandard operators are allowed to remain in the system without consequence, it diminishes the value of the brand for all franchisees.
  • Fair Competition: Compliant franchisees who follow the rules may find themselves at a disadvantage if underperforming or non-compliant operators are protected by government-mandated contracts.

Unelected Labor Standards Boards

Some policymakers at the state and local level are advocating for the creation of industry-specific labor boards that would have the power to dictate wage standards, scheduling rules, and other employment conditions. While these measures may be framed as efforts to protect workers, they often rely on flawed data and incomplete economic analysis, ultimately harming the very businesses that drive job creation.

For example, the 2022 Fast Food Accountability and Standards Recovery (FAST Act) in California would have expanded the joint employer standard and created and empowered a Fast Food Council, an unelected board of bureaucrats with little to no accountability, with wide-spread authority to establish sector wide mandates on wages, hours, and other factors.

Negotiations led by IFA and our allies yielded a compromise, lowering the minimum wage threshold from $22 to $20 and extended the timeline of its implementation from January 1, 2023 to April 1, 2024.

It also weakened the powers of the Fast Food Council to advisory status rather than creating a new rule making body.

Franchised businesses have higher rates of safety compliance, and IFA supports enforcement of laws to protect employees from wage theft and ensure health and safety.

Expensive Credit Card Swipe Fees

IFA supports efforts to protect franchised small businesses from exorbitant credit card transaction fees and opening up the payments market and introducing competition, which in turn would lower costs and drive innovation.

Sens. Roger Marshall (R-KS) and Dick Durbin (D-IL) introduced legislation – Credit Card Competition Act (S.1838, H.R. 3881) – to lower credit card swipe fees that are charged to businesses. The Visa and Mastercard duopoly have created a system that allows them to set swipe fee rates and lock out competitors through exclusivity contracts with large banks. This legislation would inject more competition and require the largest banks in the nation to enable at least two unaffiliated networks on each credit card – Visa or Mastercard plus a competing network.

More on IFA’s involvement here.

Simplifying Data Privacy Regulations

IFA supports a national privacy law that protects consumers in a nationwide, uniform and consistent way, and make all businesses responsible for their own conduct. It should not expose them to liability for privacy violations by their business partners, including contractors, franchises and other businesses.

More on IFA’s involvement here.

Defeating the Corporate Transparency Act

IFA has long opposed the useless Corporate Transparency Act (CTA), a law enacted in 2021 that requires businesses, including nearly all franchisees, to annually disclose beneficial ownership information (BOI) to the Federal government. IFA has challenged the constitutionality of the Corporate Transparency Act (CTA), which would put onerous requirements on small business owners to comply with reporting requirements that are largely duplicative of state reporting requirements and unhelpful toward catching money launderers and other international criminals. IFA was pleased that on March 2, 2025 the U.S. Treasury Department announced it will not enforce any penalties or fines associated with the CTA’s Beneficial Ownership Information reporting requirements.

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