Across the United States, a growing number of state and local laws are placing new requirements and costs on packaging materials and food service ware. In particular, food service brands are facing new and evolving regulatory pressures related to product packaging and food service ware from the rapid emergence and expansion of state Extended Producer Responsibility (EPR) frameworks. These laws are particularly complicated for franchise systems, because the laws shift the costs for managing packaging waste to “producers,” which can include franchisors and, in some cases, franchisees. To manage the monetary and brand risks associated with noncompliance, national franchisors must proactively manage the evolving set of legal, operational, and financial challenges from EPR developments.
By developing a comprehensive packaging management strategy, brands can mitigate packaging-related risks and build brand resilience.
The EPR challenge: A new era of regulatory complexity for food service franchise systems
Just as franchising is subject to varying state-specific laws and requirements, no single national standard governs food packaging waste disposal or management. Instead, brands operating in the United States must contend with a patchwork of state and local packaging-related laws, each with unique scopes, timelines, and cost structures.
OVERVIEW OF EPR LAWS AND THEIR EXPANSION:
Since 2021, EPR legislation has proliferated across the United States. California, Colorado, Oregon, Maine, Minnesota, Maryland, and Washington have each passed EPR legislation, requiring producers to take responsibility for the end-of-life management of packaging and food service ware materials. This responsibility often includes reporting to states and, in some cases, payment of fees. Each of these EPR states is now working to implement their EPR frameworks and are at various stages. Oregon’s EPR program, is for example, in its first year of implementation, with producers having had to register with the state’s Producer Responsibility Organization (PRO) and submit initial reporting by March 31, 2025. But in other states, like Maryland, where the state only recently passed EPR legislation, implementation of EPR requirements is occurring gradually with initial program requirements beginning in 2026. Meanwhile, several other states, including Illinois, Hawaii, and Rhode Island are conducting statewide recycling needs assessments as a first step in developing an EPR framework. Several states also currently have bills proposing EPR frameworks under consideration by their legislatures. For example, the “Tennessee Waste to Jobs Act,” SB 0269, which contemplates EPR requirements for products entering the state, was recently deferred for review and action to January 2026 by the Tennessee General Assembly.
STATE AND LOCAL PACKAGING LAWS: THE BROADER PATCHWORK:
EPR requirements for packaging do not exist in isolation. They exist within a patchwork of state and local packaging regulations that set minimum recycled content standards, ban single-use plastics and expanded polystyrene foam (EPS), and restrict use of certain chemicals. As illustration, New Jersey’s Recycled Content Law imposes minimum recycled content requirements on packaging products, such as rigid plastic containers, paper and plastic carryout bags, and plastic beverage containers, and prohibits the sale of polystyrene loose fill packaging. California, Colorado, Hawaii, Minnesota, New York, and Rhode Island have passed laws prohibiting the intentional use of per- and polyfluoroalkyl substances (PFAS) in food packaging, with specific focus on packaging made from paper, paperboard, and other plant-derived materials. Local ordinances and regulations in cities like San Francisco, Seattle, and Washington, D.C. can further add to the complexity by imposing compostable standards, material bans, and reusable criteria on packaging that are in addition to or distinct from state standards.
Why EPR complexity matters for franchisors
For food service franchise systems operating across multiple states, the developing patchwork of EPR frameworks is causing logistics and regulatory compliance challenges as well as presenting significant risks such as:
UNCLEAR ASSIGNMENT OF RESPONSIBILITY
While some EPR laws clearly assign compliance obligations to either the franchisor or the franchisee, these requirements vary significantly by state. Responsibility for EPR compliance can hinge on multiple factors, meaning the accountable party may differ across jurisdictions. Franchise relationships and operational logistics can, for example, lead to some franchisors taking on full EPR responsibilities for the franchise system and working with designated suppliers to address compliance, while other franchisors may pass EPR compliance obligations on to their franchisees. Without clear guidance, franchisees may adopt inconsistent compliance approaches, resulting in brand fragmentation and heightened legal risk. Regardless of who holds primary responsibility, the strategic, reputational, and operational impacts of EPR laws continue to affect the brand owner.
INCREASED REPORTING AND COST SHARING BURDENS
Franchise agreements and operations manuals that do not clearly assign responsibility for or address EPR considerations, packaging regulatory compliance, cost-sharing, or packaging procurement can expose both the franchisor and franchisee to unnecessary legal and financial risk.
COMPLIANCE INCONSISTENCY
Without centralized, coordinated, and clear compliance guidance, franchisees may choose different suppliers, packaging formats, or labeling, without consideration for all relevant regulatory factors and risks.
BRAND RISK
Non-compliant packaging can damage brand reputation, trigger negative media attention, and undermine public sustainability commitments or representations.
Positioning franchise systems for EPR compliance
Franchisors can balance compliance, control costs, and strengthen brand resilience by adopting a systemwide regulatory strategy, with clear and effective communication to franchisees on packaging and food service ware management. Franchisors can get started by:
DEVELOPING A SYSTEMWIDE REGULATORY STRATEGY.
- Conduct a packaging and materials audit across the franchise system.
- Map geographic exposure to packaging laws, including packaging regulations, EPR laws, and local ordinances.
- Identify where packaging decisions are centralized vs. decentralized.
UPDATING FRANCHISE AGREEMENTS AND OPERATIONS MANUALS.
- Clearly assign EPR compliance responsibilities and cost-sharing mechanisms.
- Ensure that contracts are flexible enough to adapt to new laws and supply chain challenges.
CENTRALIZING PACKAGING PROCUREMENT AND VENDOR APPROVAL.
- Maintain a list of pre-approved packaging suppliers that meet brand criteria and support the brand’s regulatory compliance strategy.
- Require proof of recyclability, compostability, or certified content claims.
PROVIDING FRANCHISEES WITH EPR COMPLIANCE TOOLKITS AND TRAINING.
- Offer regular updates on evolving EPR obligations, compliance toolkits, and integrate environmental compliance into onboarding and quality assurance programs.
- Establish clear lines of communication to resolve compliance issues quickly and consistently.
ENGAGING STAKEHOLDERS AND MONITORING TRENDS
- Actively participate in industry working groups addressing packaging stewardship and food service ware management.
- Monitor emerging legislation in key jurisdictions.
EPR and brand sustainability: Managing strategic and reputational risks
Many brand owners connect packaging stewardship, responsible sourcing, and sustainability values to their identity. As a result, stakeholders, including consumers, employees, and investors, expect brands to manage packaging not only in compliance with emerging frameworks but also in a responsible and transparent manner. For food service brands, this means packaging compliance and sustainability performance are often viewed together. Brand owners may also face potential liability for consumer or investor misunderstanding of sustainability messaging that is disconnected from packaging and EPR compliance. Packaging and material choices should, therefore, be considered not only legally, but strategically. One strategy could be transitioning all branded packaging to be reusable or third-party certified home compostable, and made from responsibly sourced, renewable materials. Alternatively, an in-store return or recycle program could be used to manage branded product packaging and food service ware.
Brand owners can minimize compliance obligations, alleviate risks, support sustainability goals, and build trust by developing robust packaging strategies, which fully consider EPR compliance. Franchisors can protect their brand, control costs, and meet stakeholder expectations in a rapidly evolving regulatory landscape. Proactive leadership in this area can also position food service brands as industry leaders in sustainability and responsible packaging management.
Final thoughts: Food service must lead the way
For food service franchisors, regulatory developments related to packaging, food service ware, and EPR demand immediate attention. Food service brands with strategic regulatory compliance systems will be best positioned to respond to these developments and thrive. Franchisors that address packaging and food service ware as a system issue, not just a franchisee issue, can also avoid regulatory surprises, protect their reputation, and demonstrate brand leadership in an increasingly competitive marketplace.
Want help with building a packaging compliance strategy and roadmap for your franchise system?
Our franchise lawyers advise franchisors and brand owners on EPR laws, sustainability strategy, supply chain alignment, and franchise system compliance. Contact us to start a conversation.