Federal Court Rules Jani-King Franchisees Are Employees Under FLSA, Potentially Reshaping Franchise Model

A federal court in Oklahoma ruled on November 3, 2026, that Jani-King franchisees qualify as employees under the Fair Labor Standards Act (FLSA). This decision, which applied an 'economic reality' test, found that franchisees were economically dependent on Jani-King. Legal experts suggest that if this ruling gains traction in other circuits, it could significantly alter the legal foundation of the American franchise model, exposing franchisors to potential liability for unpaid wages and overtime claims.