You Don’t Need to Wait for Congress: What Smart Franchise Brands Are Doing Right Now

The American Franchise Act is making headlines. But the brands winning on employee experience aren’t waiting for it to pass.

If you’ve been to any franchise event lately, you’ve heard about the American Franchise Act (AFA). It’s been one of the hottest topics in the industry, and for good reason.

But here’s what’s getting lost in the conversation: you don’t need this bill to pass to take care of your people.

Let’s break down what the AFA actually means, why it matters, and what the best franchise brands are already doing while Congress figures it out.

First, the Quick Version of the AFA

The American Franchise Act (H.R. 5267) was introduced with bipartisan support in 2025 to settle a question that’s been causing franchisors headaches for a decade: when exactly is a franchisor considered a “joint employer” of their franchisees’ employees?

The joint employer standard has changed in the last decade depending on who’s in the White House. That back-and-forth has created real confusion. Franchisors want to support their franchisees with hiring, training, culture, and retention. But many have pulled back out of fear that getting involved crosses a legal line.

The AFA would codify the current standard into law and make it stick. Here’s the part that matters most for how you think about employee support:

Offering optional tools, training, guidance, or surveys to your franchisees does NOT make you a joint employer. The bill makes clear that sharing best practices and resources is fundamentally different from directly controlling employment decisions.

And here’s the kicker. The current rule, set in 2020, already says the same thing. The AFA just makes it permanent.

Which means you can act right now.

So why aren’t more brands doing it?

Fear, mostly. Advisement from counsel, and a lack of clarity about where the line is.

But the cost of inaction is real. Franchisees (and most small business owners) continue to cite hiring and retention as their top challenge and impediment to growth. Payactiv states replacing one employee costs between 50% and 200% of their annual salary. For a franchise system of 50 locations where each location loses even one manager a year, you’re looking at a retention problem that dwarfs any investment in employee support.

Here’s what makes it harder to see: most franchisors have no system for knowing how their franchisees’ employees actually feel. They find out when someone quits, when a location starts underperforming, or when a franchisee calls with a problem. By then, the cost is already on the board.

What the Data Tells Us

FBR surveys franchise employees every year through our Franchising at Work research. Here’s what we know:

The good news is real. Overall satisfaction among franchise employees is 83%. Franchise employees report engagement levels well above the national average, while Gallup’s most recent study puts general U.S. employee engagement at just 31%.

But the gaps are just as real. Employees identified several areas where franchise organizations consistently fall short: support to do their jobs well, clear communication from leadership, and individual recognition for a job well done. These were among the lowest-scoring areas in the survey and have declined year over year.

And compensation? Wages are at historic highs, yet nearly a third of employees in franchising surveyed feel they are under-compensated, with dissatisfaction up 25% year over year despite wage increases upward of 7%.

That disconnect between what franchisors are paying and what employees FEEL about their pay is a culture and communication problem as much as a compensation problem. You can’t fix what you can’t see.

What Smart Brands Are Already Doing

The franchise brands performing best on employee engagement aren’t waiting for legislation. They’re doing three things:

1. They ask. Annually, at minimum. The easiest and most impactful way to demonstrate your organization’s culture is to survey employees annually, at minimum. Not only does a survey itself show employees that company leaders care what they have to say, the resulting data is a powerful tool to identify areas you can address to improve recruitment and retention strategies.

2. They benchmark. Franchisees knowing their internal scores is one thing. Knowing how they compare to the other franchisees and locations in your brand is a different level of insight. Are your managers strong relative to their peers? Is their compensation and benefits structure appealing to bring in the right employees? They can’t answer that without external data.

3. They act on what they find. The brands that get the most out of employee feedback don’t just share results with the network and move on. They use the data to target coaching opportunities, build better onboarding tools for franchises to adopt, and support franchisees with specific, unit-level insights. Michelle Kemplay, Director of Human Resources at Jason’s Deli, puts it simply: “We encourage managers to celebrate the wins and create a plan of action for opportunities. Our expectation is to see improvement over the last survey. Our turnover is far less than the industry average.”

Where FBR Fits In

FBR’s employee engagement surveys are the only surveys built specifically for franchise systems. We survey your corporate team and your franchisees’ employees. Then we benchmark the corporate team results against our systemwide database, and benchmark franchisee locations internally to your brand. We give you actionable data at every level of the organization.

You share the employee survey tool with franchisees as a resource, not a mandate. You share the system-wide benchmarks as an additional resource. You give them the visibility to see where their team is thriving and where people are at risk of walking out. That’s support. That’s not control. It’s not joint employer. And it’s exactly what the AFA says you’re allowed to do.

The brands already doing this aren’t waiting to see what Congress decides. They’re building stronger systems, lower turnover, and better franchisee performance right now.

The American Franchise Act matters. But whether it passes this year or gets stuck in committee again, your franchisees’ employees are showing up to work today. They’re either engaged or they’re not. And you either know which it is or you’re guessing.

The best time to start asking was last year. The second best time is now.

Ready to see what your employees are actually saying? Book a 20-minute demo and we’ll show you exactly how it works.

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Franchising at WORK Report

Franchise Business Review surveyed more than 11,000 employees—from the C-suite to the frontlines—to uncover the truth about job satisfaction in franchising and identified the top franchise workplaces.