LAS VEGAS — The scale of the Democratic Party’s victory in the 2026 midterm elections promises to reshape American politics for years to come, as multi-decade strongholds of the Republican Party flipped in a wave election. But for restaurant franchising, the results are likely to be less dramatic — though still significant.
At the Restaurant Finance and Development Conference in Las Vegas this week, the midterms and their implications are a major topic of conversation. Mike Whately, vice president of state affairs and grass roots advocacy at the National Restaurant Association, and Jeff Hanscom, senior vice president of state and local government relations at the International Franchise Association, discussed the fallout of the election at a panel on Monday.
“The franchise business model, along with restaurants obviously, is a bipartisan model. We are not a Republican or a Democratic issue,” Hanscom said, noting that the IFA and NRA are willing to work with either party.
The lame duck session
Legislative action is not on hold in Washington, D.C., Hanscom said, and there may be major legislation passed in the waning weeks of the 119th Congress.
“Between now and approximately Dec. 11th, when the federal funding deadline runs out, that's about the window during which we see some actual legislating getting done in Washington,” Hanscom said.
The IFA is pushing for a bill currently before Congress called The American Franchise Act, which would explicitly narrow the terms under which a franchisor might be considered a joint employer of a franchisee’s workers.
The Senate’s version of the bill had 11 cosponsors as of Nov. 9, while the version before the House of Representatives has 158. Joint-employer standards, in their modern incarnation, have been a battleground in labor law since the 2010s. Successive Democratic administrations have sought to broaden joint-employer rules — often against substantial congressional opposition — and successive Republican administrations seeking to narrow them.
Hanscom said the IFA is framing the bill as a measure to provide certainty for businesses, rather than a partisan issue. It was an immediate priority for the IFA to pass the AFA before partisan control of the legislative branch flips.
Whatley said the lame duck Congress also has an opportunity to extend the 2018 Farm Bill’s redefinition of hemp to permit higher THC content — set to expire on Dec. 11 — for a year. In the absence of such an extension, or a more significant regulatory intervention on cannabis, beverages containing THC could be under threat and “that entire market would be shut down,” Whatley said.
Old threats from new directions
Shifting control of Congress may result in more battles over labor costs, Whatley said.
“You're going to see action on minimum wage, potentially on tip credit, other labor issues at the federal level,” Whatley said.
Overall, Hanscom said, the major challenges to franchising as a business model haven’t changed much, but the political arenas in which restaurant franchising is facing those challenges have.
Whatley noted that the joint employer battle has shifted from a narrowly defined policy fight involving the National Labor Relations Board, and some reform pushes in states like California, to a tax issue — thanks to the Trump Administration’s cuts to Medicaid.
State-level Democratic parties that campaigned on expanding Medicaid now face the problem of funding further healthcare. Whatley noted that some states, like New Jersey, have turned to fees for large employers who have workers on Medicaid.
“That's not just the big corporations; that's franchisees as well, and those are significant bills potentially in terms of the amount of money,” Whatley said.
Hanscom noted that fights over Medicaid employer assessments could result in franchisors being classified as joint employers.
“Both of our organizations are in the midst of litigation challenging this law in New Jersey. But essentially, it's a tax or an assessment based on the employment relationship,” Hanscom said.
Such a policy fight would’ve been difficult to imagine 12 years ago, when the NLRB adopted a broader joint-employer standard in the first round of the contemporary struggle over the issue, he said.
Democratic victories in many states may mean versions of this fight play out in several different states.
Political opportunities
While the specter of joint employer has been resurrected by the Blue Wave, the 2026 election presents new opportunities, Whatley and Hanscom said.
“This was a midterm election about the high cost of living and about how expensive everything has gotten,” Whatley said. “We can be a very realistic part of that conversation, specifically on tariffs.”
Whatley said he expected congressional Democrats to push back on the Trump Administration’s trade policies as part of an effort to lower input costs for businesses and sticker prices on consumer goods.
The scale of changes in legislatures also offers an opportunity, Whatley said, as trade associations have a chance to build political relationships with neophyte lawmakers.
“We have a great opportunity to tell our story and to explain our business model to a lot of new folks who may not understand it and may need that education,” Whatley said.
Early political engagement with ingénue electeds is a must, Hanscom said, because it can inoculate politicians against franchising’s political opponents, particularly in organized labor. That engagement can look like civic involvement — through job fairs or highlighting the entrepreneurial opportunities afforded by franchising — or by positioning trade associations as political and economic partners of new state governments and legislative majorities.
“That way, six months, eight months, two years down the road, when legislator so-and-so or not-so-newly elected mayor has that sectoral bargaining proposal on his or her desk, they'll remember,” Hanscom said. “We have to build those relationships now, so that when we do need them — which we almost certainly will in a few years' time — they're there for us.”
