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May 7, 2025

Trump Officials Talk Franchising

Addressing IFA’s Legal Symposium yesterday, Keith Sonderling, U.S. Deputy Secretary of Labor, outlined the Department’s approach to labor policy under the Trump Administration. 

The big picture: Sonderling spoke to the evolving political landscape, the balance between worker protections and business realities, and the potential for industry-specific guidance affecting the franchise model. 

Zoom out: Other speakers included Chris Mufarrige, Director of the FTC’s Bureau of Consumer Protection, who spoke about the FTC’s shifting priorities under the current administration, emphasizing the importance of reducing regulatory burdens on small businesses while still protecting consumers. Additionally, officials from the Small Business Administration detailed the return of the Franchise Directory on June 1, and dozens of in-house counsel unpacked major cases involving franchising. 

IFA Defeats Vermont Non-Compete Ban

In a major win for franchising, IFA advocacy defeated Vermont's H.205, a sweeping overreach seeking to prohibit all non-compete clauses within franchise agreements in the Green Mountain state.

Dig deeper: The bill's sponsor, Rep. Michael Marcotte, is reportedly pivoting to franchise registration laws and contract regulation and review processes for consideration in the 2026 legislative session. 

What's next: Following adjournment of the Vermont legislative session on May 9, IFA will remain vigilant and continue engagement with all relevant stakeholders.

IFA Improves Oklahoma Franchise Bill

Oklahoma SB 521 is expected to clear the state House imminently and without amendments, preserving its favorable status fought for by IFA.

Why it matters: The move follows a critical juncture where the bill's House sponsor, Rep. Mike Dobrinski, hinted at disruptive franchise relationship provisions. Following IFA advocacy, Rep. Dobrinski agreed not to pursue the detrimental amendments. 

What's next: SB 521 has until May 8 to clear the House floor without any further action. IFA will continue to monitor the bill's progress until the legislature adjourns May 30. 

IFA Monitoring New Jersey Proposal

The New Jersey Department of Labor (NJDOL) is formally proposing new rules codifying its interpretation of the stringent "ABC test," which dictates whether a worker is an employee or an independent contractor under key state labor laws. 

Dive deeper: These rules are crucial for franchisors operating in New Jersey. The ABC test is notoriously strict, and its formal codification significantly impacts how franchisees might be classified. The proposed rules aim to provide clear, reliable guidance by:

• Formally outlining NJDOL's application of the three-pronged ABC test required bylaws like the Unemployment Compensation and Wage and Hour laws.
• Incorporating standards from key NJ Supreme Court decisions, including Carpet Remnant Warehouse (1991) and the recent East Bay Drywall (2022).
• The stated goal is to protect workers often misclassified as contractors and affirm the status of legitimate independent businesses.

What's next: IFA will be actively engaged throughout the proposed rulemaking process, whose 60-day comment period closes on July 4, 2025. 

IFA Fights For Tax Relief

IFA signed a letter urging Congress to preserve the state and local business tax (B-SALT) deduction—an essential component of the federal tax system that is set to expire at the end of 2025

Why it matters: The letter warns that capping or eliminating the deduction could result in a $600 billion tax hike on businesses of all sizes, undermining the pro-growth policies of the 2017 Tax Cuts and Jobs Act (TCJA). 

Go deeper: This advocacy effort was highlighted by Politico earlier this week.

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