International Franchise Association Applauds Introduction of Trademark Licensing Protection Act

Bill introduced in U.S. Senate would protect the franchisor-franchisee relationship by ensuring brand standards may not be used as evidence of employment controls in litigation

WASHINGTON, DC – The International Franchise Association today announces its support for the Trademark Licensing Protection Act, which was introduced in the U.S. Senate on Wednesday by Sens. Angus King (I-ME), James Lankford (R-OK), and Joe Manchin (D-WV). The legislation ensures that brand standards, issued by a franchisor to preserve or enhance the brand, may not be used as evidence of employment controls in litigation – critical to the franchise business model.

“America's 775,000 locally owned franchises are open for opportunity and driving the economic recovery, but the franchise business model needs protection,” said Michael Layman, senior vice president of the International Franchise Association. “Today we applaud the seven tripartisan senators for recognizing that brand standards are essential to the franchise business format, and for introducing this bill that will protect the franchisor-franchisee relationship. This legislation comes at a critical time as federal agencies seek to change the definition of employer.”

Trademark law requires franchises to protect the brand through standardized brand controls, but at the same time, employment law penalizes franchises by deeming them “joint employers” for having the same brand controls. The Trademark Licensing Protection Act seeks to resolve the contradiction between trademark and employment law, by affirming that brand standards issued to preserve or enhance the brand may not be used as evidence of employment controls in litigation.

The bill is cosponsored by Sens. Susan Collins (R-ME), John Cornyn (R-TX), Kyrsten Sinema (D-AZ), and Thom Tillis (R-NC).