International Franchise Association Endorses Employee Rights Act of 2022
WASHINGTON (March 22, 2022) – The International Franchise Association (IFA) announces its support for the Employee Rights Act of 2022, which was introduced this week by U.S. Sen. Tim Scott (R-SC) in the Senate and U.S. Rep. Rick Allen (R-GA) in the House of Representatives. The legislation serves to protect and provide stability to American workers and encourage small business ownership, including franchises.
“The Employee Rights Act is exactly the type of legislation that America’s local businesses and their workers need,” said Michael Layman, Senior Vice President of Government Relations and Public Affairs with the International Franchise Association. “This bill will make it more clear than ever that franchisees own their own business, without the fear of becoming employees of their brand. In sharp contrast PRO Act, which would have ended the franchise business model as we know it, this bill will provide clarity and certainty for businesses and their employees, encouraging more people to pursue the American Dream.”
The bill, updated from its original version in 2011, includes specific language to ensure that local franchised businesses remain independent businesses, rather than facing the risk of being forced into employment with their national brand, by codifying the longstanding franchise relationship. The legislation ensures that assistance provided by the franchisor, such as training for employees, do not force the franchisor and franchisee into a joint employment relationship.
IFA joined 44 of organizations announcing their support for the legislation, citing that labor laws have not been updated since 1947. The group describes this bill as “a vital piece of legislation that will empower American workers and protect their freedom of choice in the workplace.” Read the full letter here.
According to research by Oxford Economics, franchised businesses offer better pay and benefits, empower entrepreneurial opportunities that would not otherwise be available, especially to women, people of color, and veterans, and encourage giving back to local communities. Local franchises pay 2.2 – 3.4% higher wages than similar nonfranchises, and more than 65% of franchise workers are offered health insurance, a greater amount than most small establishments. Around 26% of franchises are owned by people of color, compared with 17% of independent businesses generally, and Black-owned franchises earn 2.2 times more than Black-owned independent businesses. Lastly, nearly one-third of franchisees said they would not own a business without franchising.
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Celebrating over 60 years of excellence, education, and advocacy, the International Franchise Association (IFA) is the world’s oldest and largest organization representing franchising worldwide. IFA works through its government relations and public policy, media relations, and educational programs to protect, enhance and promote franchising and the approximately 775,000 franchise establishments that support nearly 8.2 million direct jobs, $787.7 billion of economic output for the U.S. economy, and almost 3 percent of the Gross Domestic Product (GDP). IFA members include franchise companies in over 300 different business format categories, individual franchisees, and companies that support the industry in marketing, law, technology, and business development.