Trademark Licensing Protection Act

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by Toni-Anne Barry

These days, it seems like politicians cannot agree about anything. That’s because it’s convenient for the media to use a gridlock narrative as shorthand for the contrarian and obstinate behavior that defines how our elected representatives address a few big issues. However, a different, more nuanced picture emerges when one takes a closer look at the actual lawmaking process – the pursuit of positive change. Common Ground profiles members of opposing parties who are working together to advance issues important to hoteliers.

The Issue

Trademark Licensing Protection Act

The franchise model is fundamental to the hotel industry. Under this structure, franchisees are independent owners and operators of their hotels and are responsible for all operations of their businesses. Franchisors collect a one-time license fee and monthly royalties for the use of the brand name and to ensure consistent quality through brand standards. This relationship is governed by the Lanham Act of 1946, which allows franchisors to monitor the use of the brand. These brand standards do not result in any direct control of the business but are often cited as evidence to extend joint-employer status to franchisors. This threatens to strip franchisees of their decision-making authority and result in the loss of control over their business.

Common Ground

Former Chairman of the House Small Business Committee and current Ranking Member, Rep. Steve Chabot (R-OH) co-sponsored H.R. 6695 the Trademark Licensing Protection Act with Rep. Henry Cuellar (D-TX) in the 115th Congress. The legislation would clarify the Lanham Act of 1946 to ensure that the implementation of brand standards cannot result in the extension of joint-employer status to franchisors. Ultimately, the bill stalled in the House and AAHOA eagerly supports the reintroduction of the act in this Congress.

Rep. Henry Cuellar (D-TX)

First Elected: 2005

Committees: Appropriations, Steering and Policy

“As a former small business owner, I understand that operating a small business is a fundamental pillar of the American dream, and the franchise business model is a great way for aspiring entrepreneurs to achieve this goal. We must ensure that our franchise owners receive fair treatment instead of confusing and arbitrary regulations that hinder them. The Trademark Licensing Protection Act will provide our nation’s small and franchise businesses the certainty necessary to grow and invest in the future of their employees.”

Rep. Steve Chabot (R-OH)

First Elected: 1994

Committees: Small Business, Judiciary, Foreign Affairs

“In an effort to strengthen the protections of small businesses, especially franchisees, we must ensure that the millions of Americans they employ have the provisions and protections they need available to them without risking being considered a joint employer. It’s imperative that Congress restores a common-sense definition of an employer and provides certainty to America’s job creators.”

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