S1007 creates the “Franchise Act of 2026” by adding a new chapter to Title 41 of the South Carolina Code governing franchise businesses. The bill defines what constitutes a franchise, franchisor, franchisee, and “direct and immediate control,” and it specifies when a franchisor is considered to control essential employment terms such as wages, benefits, scheduling, hiring, discharge, discipline, supervision, and direction. It also lists examples of conduct that would and would not count as direct and immediate control, with the apparent goal of distinguishing ordinary brand standards and operational support from actual employer-like control.
The bill further provides that, for workers’ compensation, unemployment benefits, and civil rights regulations, a franchisor is not deemed the employer of a franchisee or the franchisee’s employees unless the franchisor directly and immediately controls one or more essential terms and conditions of employment. It states that the chapter should be liberally construed to preserve franchisors and franchisees as separate employers and businesses, while preserving liability under federal law such as the Fair Labor Standards Act and the National Labor Relations Act. The act would take effect upon the Governor’s approval.
Impact
If enacted, the bill would add a new statutory framework in Title 41 that narrows when a franchisor may be treated as the employer of a franchisee’s workers under specified state-law contexts. It would affect interpretation of employment relationships in workers’ compensation, unemployment insurance, and civil rights enforcement, and would likely reduce the circumstances in which franchise brands are exposed to state-law joint-employer claims. The bill also creates detailed statutory definitions that could influence litigation and administrative decisions involving franchise systems, staffing practices, and brand standards.
Sentiment
No committee transcripts or recorded votes were provided, so there is no direct evidence of legislative debate or formal support/opposition in the available record. Based on the text alone, the bill appears designed to provide clarity and legal protection for franchisors and franchisees by limiting state-law joint-employer exposure, which suggests a business-friendly orientation. The absence of recorded votes or discussion prevents a reliable assessment of broader political sentiment.
Contention
The main point of contention likely concerns whether the bill goes too far in shielding franchisors from being treated as employers of franchisee workers. Supporters would likely emphasize clarity, franchise independence, and protection for brand standards and operational assistance, while critics may argue that the definitions are too restrictive and could make it harder for workers to hold franchisors accountable when they exert meaningful influence over employment conditions. The bill specifically carves out ordinary brand controls and training from “direct and immediate control,” which is likely to be the central issue in any dispute.