South Carolina S 1007: Franchise businesses

Bill Text

2025-2026 Bill 1007 Text of Previous Version (Mar. 12, 2026) - South Carolina Legislature Online 

South Carolina General Assembly
126th Session, 2025-2026

Bill 1007

Indicates Matter Stricken
Indicates New Matter

(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

A bill

TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY ENACTING THE 
"FRANCHISE ACT OF 2026" BY ADDING CHAPTER 45 TO TITLE 41 SO AS TO PROVIDE 
DEFINITIONS AND DEFINE INSTANCES OF DIRECT AND IMMEDIATE CONTROL, AND to PROVIDE 
EXCEPTIONS, AMONG OTHER THINGS.

Be it enacted by the 
General Assembly of the State of South Carolina:

SECTION 1. This act may be cited as the "Franchise Act of 2026."

SECTION 2. Title 41 of the S.C. Code is amended by adding:

CHAPTER 45

Franchise Businesses

 Section 
41-45-10. For purposes of this chapter:

 (1) 
"Franchise" means any continuing commercial relationship or arrangement, 
whatever it may be called, in which the terms of the offer or contract specify, 
or the franchise seller promises or represents, orally or in writing, that:

 (a) 
the franchisee will obtain the right to operate a business that is identified 
or associated with the franchisor's trademark, or to offer, sell, or distribute 
goods, services, or commodities that are identified or associated with the 
franchisor's trademark;

 (b) 
the franchisor will exert or has authority to exert a significant degree of 
control over the franchisee's method of operation, or provide significant 
assistance in the franchisee's method of operation; and

 (c) 
as a condition of obtaining or commencing operation of the franchise, the 
franchisee makes a required payment or commits to make a required payment to 
the franchisor or its affiliate.

 (2) 
"Franchisee" means any person who is granted a franchise.

 (3) 
"Franchisor" means any person who grants a franchise and participates in the 
franchise relationship. Unless otherwise stated, it includes subfranchisors. 
For purposes of this definition, a "subfranchisor" means a person who functions 
as a franchisor by engaging in both presale activities and postsale 
performance.

 (4) 
"Direct and immediate control" means having the authority to make or by making 
day-to-day decisions that have a regular or continuous consequential effect on 
an essential term and condition of employment of a franchisee's employees.

 (5) 
"Essential terms and conditions of employment" includes wages, benefits, 
scheduling, hiring, discharge, discipline, supervision, and direction.

 Section 
41-45-20. (A) A franchisor 
exercises direct and immediate control over wages if it determines the wage 
rates, salary, or other rate of pay that is paid to a franchisee's individual 
employees or job classifications.

 (B) A 
franchisor exercises direct and immediate control over benefits if it 
determines the fringe benefits to be provided or offered to a franchisee's 
employees. A franchisor does not exercise direct and immediate control over 
benefits by permitting a franchisee, under an arm's length contract, to 
participate in its benefit plans including, but not limited to, health 
insurance plans, pension plans, and tuition assistance.

 (C) A 
franchisor exercises direct and immediate control over scheduling if it 
determines work schedules or the work hours, including overtime, of a 
franchisee's employees. A franchisor does not exercise direct and immediate 
control over scheduling by establishing a franchisee's operating hours, or by 
establishing minimum staffing levels to satisfy the franchise's service 
standards.

 (D) A 
franchisor exercises direct and immediate control over hiring if it determines 
which particular employees will be hired or which employees will not. A 
franchisor does not exercise direct and immediate control over hiring by 
encouraging or recommending changes in staffing levels or by setting minimum 
recruiting and hiring standards, such as those required by law, for consumer or 
employee safety, or for brand protection.

 (E) A 
franchisor exercises direct and immediate control over discharge if it decides 
to terminate the employment of a franchisee's employee. A franchisor does not 
exercise direct and immediate control over discharge by bringing misconduct or 
poor performance to the attention of a franchisee that makes the actual 
discharge decision, by expressing a negative opinion of a franchisee's 
employee, or by setting minimum standards of performance or conduct, such as 
those required by law, for consumer or employee safety, or for brand 
protection.

 (F) A 
franchisor exercises direct and immediate control over discipline if it decides 
to suspend or otherwise discipline a franchisee's employee. A franchisor does 
not exercise direct and immediate control over discipline by bringing 
misconduct or poor performance to the attention of a franchisee that makes the 
actual disciplinary decision, by expressing a negative opinion of a 
franchisee's