Your Operations Manual Is the First Exhibit in a Joint-Employer Case
Short answer: whatever the United States finally decides about joint employment in franchising, the first document anyone will read to test it is your operations manual. The American Franchise Act now moving through Congress would draw the line at "substantial direct and immediate control" over a franchisee's workers. Your manual, your training curriculum and your software settings are where that control is written down, or where its absence can be proven.
Where the bill stands
H.R. 5267, the American Franchise Act, passed the House Education and Workforce Committee on 21 July 2026 with 142 bipartisan House cosponsors and a companion bill in the Senate. The committee filed its report, H. Rept. 119-802, on 8 September 2026. As of 29 September 2026 the bill still needs a vote on the House floor, then the Senate. Nothing below is law yet.
The reported text amends the National Labor Relations Act and the Fair Labor Standards Act. A franchisor would be a joint employer of a franchisee's staff only if it "possesses and exercises substantial direct and immediate control over one or more essential terms and conditions of employment". Control that is sporadic, isolated or de minimis does not count; control with a regular or continuous consequential effect does.
Why the manual is exhibit one
A test built on "direct and immediate" control is a test about behaviour, and behaviour in a franchise system is scripted in writing. When a franchisee's employee files a wage claim, the first request is for the documents that told the store how to run: the operations manual, the training modules, field-visit checklists and the defaults in the scheduling and POS software the franchisor supplies. If those documents tell the franchisee who to hire, what to pay, when each person works and when to fire them, the franchisor has written its own evidence.
The committee text also lists practices that would not, by themselves, amount to that control, including providing training materials or minimum training requirements, setting brand standards, giving routine instructions about what work is done and where or when, and setting operating hours or minimum staffing to meet service standards. Read that list carefully: it protects standards about outcomes. It does not protect instructions about how the franchisee manages individual people.
A language checklist for your next manual review
Split the manual in two: brand and customer standards (yours) and people management (the franchisee's). Label the second part as guidance.
Search for "must", "shall" and "required" in every section on hiring, pay, scheduling, discipline and termination. Each one is a candidate for "the franchisee decides".
Set minimum staffing and opening hours, never shifts for named employees.
Never set wage rates. If you share pay benchmarks, mark them optional and dated.
Remove any right to approve or require the hiring or firing of an individual employee.
Keep training requirements at the level of what must be learned, not who supervises individual performance reviews.
Check your software: who configures schedules and approves time sheets in the tools you supply? The audit log should show the franchisee.
Brief field consultants: messages that direct a franchisee's staff week after week are the "regular or continuous" pattern the bill describes.
If AI now drafts your SOPs, review the output for directive HR language before it goes into the manual. A model writes "must" easily.
What this means outside the United States
The American Franchise Act is US federal law in the making. It does not apply automatically in Vietnam or in any master-franchise market. Brands going global still inherit its logic the moment they sign a US master or area developer, and the discipline of separating brand standards from people management is good practice in every market. Check the rules of each country with local counsel.
This article is general information, updated 29 September 2026. It is not legal advice.
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