Resolution on the Misapplication of Employee Classification Laws
WHEREAS, franchising contributes $1.6 trillion to the United States economy through 733,000 franchise businesses; and
WHEREAS, franchise businesses employ over 13 million workers; and
WHEREAS, franchising has been a major source of economic expansion in the United States, particularly in the retail trade and services sectors, providing entrepreneurs with a proven route to business ownership; and
WHEREAS, business and franchise agreements are contracts that govern the duties and obligations of the parties to these agreements; and
WHEREAS, Section 10 of the U.S. Constitution and most state constitutions specifically prohibit impairment of contracts that are freely and openly entered into by the parties; and
WHEREAS, the area of contract law is a well established and settled area of law with sound guiding principles outlined in the uniform commercial code; and
WHEREAS, legislation or regulations which would improperly classify franchisees as “employees” is a misinterpretation of labor and contract policy and deprives franchise investors of valuable economic opportunities; and
THEREFORE, BE IT RESOLVED, that [insert state here] opposes enactment of laws that interfere with business and franchise agreements freely and openly entered into by parties. Furthermore, notwithstanding any voluntary agreement entered into between the United States department of labor and a franchisee, neither a franchisee nor a franchisee’s employee shall be deemed to be an employee of the franchisor for any purpose.
BE IT FURTHER RESOLVED, that [insert state here] opposes enactment of laws and regulations that have the effect of classifying franchisees as “employees” of the franchisor.