Franchise Legislation Tracker
Federal and state franchise bills, relationship laws, and regulatory changes that matter to franchisees and franchisors. Updated for the 2025-2026 legislative session.
Federal Active Legislation
American Franchise Act
Sponsors: Sens. Marshall, King, Lankford, Sheehy, Collins
Introduced: Dec 2025 (Senate) / Sep 2025 (House)
Clarifies joint employer standard for franchising. A franchisor is a joint employer only if it exercises "substantial direct and immediate control" over essential employment terms (wages, hiring, scheduling, discipline). Preserves franchisor-franchisee independence.
Franchise Freedom Act
Sponsors: Rep. Schakowsky (D-IL)
Introduced: Jul 2025
Grants franchisees a private right of action under the FTC Franchise Rule. Currently, only the FTC can enforce Rule violations. This would let franchisees sue directly for disclosure violations and seek equitable relief beyond actual damages.
State Active Legislation (2025-2026)
Franchise Act of 2026
Defines franchise relationships and establishes "direct and immediate control" standard for joint employer determinations. Mirrors the federal American Franchise Act at the state level. Clarifies that franchisors are not employers of franchisee workers unless they control day-to-day employment terms.
Franchise Broker Registration Act
Enacted law requires annual registration and pre-sale disclosure for franchise brokers operating in California. The Legislature appropriated funding in July 2026, starting the one-year countdown; registration becomes operative July 1, 2027. DFPI has not yet published broker registration forms or procedures, so brokers should prepare but continue monitoring DFPI guidance. Non-registration provisions are already in effect.
Maryland Franchise Legislation 2026
Expands franchisee association rights, extends statute of limitations from 3 to 4 years (or 2 years after franchise opening), and codifies the state's fast-track FDD review pilot program.
Virginia Noncompete Ban & Governing Law
Bans post-termination noncompete restrictions in franchise agreements and requires Virginia law to govern franchise contracts sold in the state. Franchisors can no longer include choice-of-law provisions designating another state. Grandfathered for agreements entered into before July 1, 2026.
Washington Noncompete Ban
Bans virtually all noncompete agreements for workers and independent contractors in Washington state. While not franchise-specific, it removes a key tool franchisors use to protect territory and trade secrets after franchisee departure. Goes further than any other state except California, Minnesota, North Dakota, and Oklahoma.
21 States + DC Have Franchise Relationship Laws
These states regulate the ongoing franchisor-franchisee relationship: termination rights, renewal protections, and transfer restrictions.
| State | Termination Standard | Notice Period | Cure Period | Renewal Protection | Transfer Rights |
|---|---|---|---|---|---|
| Alaska | Good cause | Required | 60 days | Yes | Limited |
| Arkansas | Good cause | 90 days | 30 days | Yes | Limited |
| California | Good cause | 60 days | 30 days | Yes | Protected |
| Connecticut | Good cause | 60 days | None | Yes | Limited |
| Delaware | Good cause | 90 days | None | Yes | Limited |
| Hawaii | Good cause | Required | 30 days | Yes | Limited |
| Illinois | Good cause | 30 days | 30 days | Yes | Limited |
| Indiana | Good cause | 90 days | None | Yes | Yes |
| Iowa | Good cause | Required | 60 days | Yes | Protected |
| Maryland | Good cause | Required | 30 days | Yes | Limited |
| Michigan | Good cause | Required | 30 days | Yes | Limited |
| Minnesota | Good cause | 90 days | 60 days | Yes | Protected |
| Mississippi | Good cause | 60 days | None | Yes | Limited |
| Missouri | Good cause | 60 days | None | Yes | Limited |
| Nebraska | Good cause | 60 days | None | Yes | Limited |
| New Jersey | Good cause | Required | 30 days | Yes | Limited |
| North Dakota | Good cause | Required | 30 days | Yes | Limited |
| Rhode Island | Good cause | Required | 30 days | Yes | Limited |
| Virginia | Reasonable cause | Not specified | Not specified | Yes | Limited |
| Washington | Good cause | Required | 30 days | Yes | Protected |
| Wisconsin | Good cause | 90 days | 60 days | Yes | Protected |
| District of Columbia | Good cause | Required | 30 days | Yes | Limited |
Broker Registration Requirements
States requiring franchise brokers to register before selling franchises. California's SB 919 is funded, with broker registration operative July 1, 2027 while DFPI prepares forms and procedures.
New York
Mandatory registration with state
Franchise brokers must file a separate registration form with detailed information.
Washington
Mandatory registration with state
Separate broker registration form required for anyone offering or selling franchises.
California
Funded — operative Jul 1, 2027
SB 919 enacted and funded in July 2026. Broker registration becomes operative July 1, 2027; DFPI has not yet published registration forms or procedures. Disclosure provisions are already in effect.
Non-Compete Enforcement by State
Non-compete enforcement varies dramatically. Five states ban them entirely (or will soon), and Virginia bans them in franchise agreements.
Complete Ban (5)
- California
- Minnesota
- North Dakota
- Oklahoma
- Washington (effective Jun 2027)
Virginia also bans non-competes in franchise agreements (effective Jul 2026)
Limited Restrictions (32 states + DC)
Courts enforce non-competes but impose limits on scope, duration, or geographic reach.
No Specific Restrictions (13)
No statutory limits on non-compete agreements in franchise contracts.
Key Takeaways for 2025-2026
Joint Employer Fight Continues
The American Franchise Act (federal) and state-level mirrors (South Carolina S.1007) aim to lock in a narrow joint employer definition. If passed, franchisors get certainty. If blocked, the NLRB could revert to broader standards.
Franchisee Rights Expanding
The Franchise Freedom Act would be the biggest shift in franchise law in decades, giving franchisees a federal private right of action. Even without it, states like Maryland are expanding protections and extending statute of limitations.
Broker Compliance Tightening
California SB 919 is funded and broker registration becomes operative July 1, 2027; DFPI has not yet published registration forms or procedures, so brokers should prepare now and monitor agency guidance. With 44% of brands using brokers, this affects nearly half the industry once live. The NASAA Model Franchise Broker Registration Act, adopted May 2026, creates a uniform template states can adopt — and several already have it under consideration.
State-Level Patchwork Growing
21 states plus DC already have relationship laws. More states are considering broker registration, expanded cure periods, and franchisee association protections. Multi-state franchisors face an increasingly complex compliance landscape.
Deep Dives & Analysis
In-depth guides on the regulatory changes affecting franchise owners and buyers in 2026.
Joint Employer Rules in 2026
How the ongoing NLRB joint employer fight affects franchisor liability and franchisee autonomy.
State Franchise Law Changes 2026
A state-by-state breakdown of new franchise relationship laws, registration requirements, and protections.
Franchise Non-Compete Rules
Which states ban franchise non-competes, how the FTC rule interacts, and what it means for exiting franchisees.
Franchisee Bankruptcy Wave 2026
Rising franchisee insolvencies, MCA debt traps, and what due diligence can catch before signing.
Franchise Exit Strategies
State-by-state exit difficulty ratings, non-compete enforcement, and franchisor breach defenses.
Franchise Cost Breakdown 2026
The full fee stack — franchise fees, royalties, ad funds, technology fees, and hidden costs by brand.
NASAA Model Franchise Broker Registration Act
The new model act adopted May 2026 creating uniform broker registration rules — key provisions, covered parties, and state adoption timeline.
Franchise Allergen Disclosure Laws 2026
California SB 68 requires written allergen disclosures for 20+ location chains starting July 1, 2026 — including franchise systems with a single California unit. Buyer diligence guide.
Stay Ahead of Regulatory Changes
FDDIQ tracks franchise legislation, FDD filings, and regulatory changes across all 50 states. Get the data you need to make informed franchise decisions.
Explore FDDIQ ProLast updated: June 18, 2026