American Franchise Act Will Spur Hotel Entrepreneurship, AHLA Says

New legislation will bolster the hotel franchise business model, empowering small businesses and supporting some 3 million workers nationwide.

The American Hotel & Lodging Association (AHLA), the leading voice representing all segments of the hotel industry, today shared their support and called for the quick adoption of the bipartisan American Franchise Act (AFA) introduced by Representatives Kevin Hern (R-OK) and Don Davis (D-NC).

For decades, the hotel franchising business model has served as a win-win for franchisees and franchisors. The AFA will protect the hotel business model and ultimately provide certainty regarding the nature of the employment relationship. This mutually beneficial partnership enables aspiring small business owners to go into business for themselves, but not by themselves.

With 36,000 franchised hotels in the United States, the franchising model has long been a pathway for women and minority small business owners to thrive in the small business sectors. Hotel franchisees handle the daily operations of their individual hotels, while simultaneously benefiting from the powerful brand recognition, operational standards, and support provided by the franchisor. This model ensures consistent and reliable guest experiences, helping to build traveler trust and drive repeat bookings.

AHLA President & CEO, Rosanna Maietta urged for the quick adoption of this important legislation.

“Hotel franchising is a pathway to the American Dream for so many entrepreneurs,” Maietta stated. “It’s a proven ‘win-win’ business model that enables dynamic partnerships between franchisees and franchisors. The American Franchise Act codifies a common-sense joint employer definition and is essential to protecting this framework. Representatives Hern and Davis understand this unique relationship, and we applaud them for their leadership on this important legislation.”

The AFA amends the Fair Labor Standards Act (FLSA) and the National Labor Relations Act (NLRA) which, since 2015, have left franchisors and franchisees in a perpetual state of uncertainty. The AFA brings much needed clarity for the protection of workers and preservation of small business owner autonomy by establishing a joint employer standard that will allow franchising to continue to thrive.

AHLA Board of Directors Chair and Vision Hospitality Group Founder and CEO, Mitch Patel added, “As a hotel franchisee, I have seen firsthand how this business model has allowed me and so many others to achieve the American dream. Throughout my career, my hotel business has employed thousands of people who have built lifelong careers in our industry. The American Franchise Act is essential to preserving this foundation. For the benefit of both employers and employees, we strongly encourage the swift passage of this critical legislation.”