American Franchise Act would support Georgia’s small-business owners
Owning and operating a successful small business is tough. With razor thin margins and highly competitive markets, it can be extremely difficult to make ends meet. It’s no coincidence that nearly half of small businesses fail after five years. That means many entrepreneurs who invest their life savings to buy a business lose their future.
That’s why every member of Congress should support the small businesses in their states and districts by throwing their full weight behind the American Franchise Act.
Introduced in September and now with more than 60 cosponsors in the U.S. House of Representatives — including Georgia U.S. Reps. Buddy Carter, R-District 1, Brian Jack, R-District 2 and Rick Allen, R-District 12 — as well as companion legislation in the U.S. Senate, this bipartisan effort addressed an issue that has saddled the small-business community with tremendous uncertainty, increased costs and complexities: an expanded federal joint employer standard.
‘Joint employer’ standard puts franchisors’ support at risk
Let me explain. I have been involved with franchising since college, mostly in the food industry, with which the franchise model is most often associated. Five years ago, when the pandemic disrupted everything, I decided to try my hand elsewhere and opened my own Floor Coverings International franchise in northeast Atlanta.
From the outset, I was free to run the day-to-day operations of my store but also benefited from the institutional knowledge and established playbook of my franchisor. Without that support, I would not have succeeded. I didn’t even know how to use a hammer when I started, let alone run a home improvement business.
Six months later, I felt like a flooring expert, thanks to the tools and training I received from my franchisor. However, an unpredictable joint employer standard puts the support franchisors can provide at risk.
The uniqueness of the business model is one reason entrepreneurs from all different walks of life choose franchising. In fact, 26% of franchises are minority-owned, compared to just 17% of nonfranchised businesses. For people from underrepresented backgrounds, franchising is not just a pathway to ownership, it’s a pathway to prosperity.
Even with the institutional support, I have always been my own boss. The joint employer standard determines the level of autonomy, independence and shared liability between franchisors and franchisees like me.
Under an expanded joint employer standard, my current autonomy vanishes. Those of us who own our own franchise — along with the approximately 831,000 franchise establishments across more than 300 industries — become employees of our franchisors. We may as well work at any other corporate job where we report upward to a boss.
Over the past decade, the federal joint employer standard has changed four times, with each change in presidential administration. Each time the rules change, it creates new uncertainty. Business owners don’t plan in four- or eight-year terms. We sign leases and agreements that often stretch well beyond.
Bill would create clarity and create more job opportunities
The American Franchise Act recognizes franchisees as the independent small-business owners we are, while still protecting workers and ensuring customers get the consistent, high-quality service they expect.
This clarity would give franchisors the confidence to invest more in existing franchisees and open new doors for the next generation of entrepreneurs. It would mean more jobs, stronger communities and more families with a real chance to build generational success. It would allow entrepreneurs like me to create opportunities for our children. My daughter just turned 12, and it’s possible that someday I can hand the business over to her.
Georgia is already expected to be the country’s fastest growing for franchising in 2025. There are more than 30,000 franchise establishments creating more than 300,000 jobs. The American Franchise Act would fuel even more opportunity and growth.
Without a common-sense joint employer standard, not only would I not control my own business, but I also wouldn’t want to be a franchisee. I know I’m not alone in this sentiment. Washington may seem gridlocked, but surely elected officials of both parties can come together to support small businesses.
Jennie Hong is the owner of Floor Coverings International Northeast Atlanta branch.
