The "Franchise Act of 2026" aims to establish clear definitions and guidelines regarding the relationship between franchisors and franchisees in South Carolina. It introduces Chapter 45 to Title 41 of the South Carolina Code, defining key terms such as "franchise," "franchisee," "franchisor," and "direct and immediate control." The bill outlines specific instances in which a franchisor exercises direct and immediate control over various aspects of a franchisee's operations, including wages, benefits, scheduling, hiring, discharge, discipline, and supervision. It also clarifies that a franchisor is not considered the employer of a franchisee or their employees unless they directly control essential terms and conditions of employment.

Additionally, the bill emphasizes the importance of preserving the independence of franchisors and franchisees as separate entities. It states that the chapter should be interpreted liberally to maintain this independence while also noting that it does not affect a franchisor's liability under federal laws, such as the Fair Labor Standards Act or the National Labor Relations Act. The act will take effect upon approval by the Governor.