The American Franchise Act aims to protect the traditional franchise business model by narrowing the legal definition of "joint employer" under federal labor law. The bill amends both the National Labor Relations Act and the Fair Labor Standards Act to specify that a franchisor can only be considered a joint employer of a franchisee's workers if it exercises "substantial, direct, and immediate control" over essential employment terms like wages, hiring, firing, scheduling, and discipline. It clarifies that routine franchisor activities—such as setting brand standards, offering training materials, or establishing minimum quality requirements—do not count as the kind of control that would trigger joint-employer status. This change primarily affects franchise businesses (like fast food chains, hotels, and retail franchises) and their roughly 8.4 million employees, aiming to shield franchisors from labor liability for decisions made independently by local franchise owners. The law would apply only to legal proceedings that begin after its enactment, meaning it would not affect cases already underway.