Franchise and Licensing partner Dale Cohen expressed concern over the Protect the Right to Organize (PRO) Act and its potential impact on franchise businesses. In an article in Global Franchise Magazine, Cohen discussed how the Act, which was passed in the House of Representatives on March 9, 2021, and draws inspiration from California’s independent contractor test, would almost certainly reclassify franchisees as employees of franchisors, as opposed to owners of their own businesses.
“The PRO Act has the potential to shift responsibility and liability associated with operating a franchised business, and control over one’s own business and employment decisions, from the franchisee to the franchisor,” Cohen said. “It deprives both parties of the ultimate benefit of their bargain negotiated when entering into a franchise agreement.”