These EPR packaging laws are particularly challenging for restaurant and hospitality franchisors as they navigate a delicate balance among conflicting priorities. While franchisors do not want to assume liabilities, costs or other obligations that may properly lie with their franchisees or suppliers, they also want to protect their brands by ensuring that their franchise systems and supply chains are complying with legal requirements in a consistent and coherent manner.

In more detail

EPR packaging laws at a glance

Generally speaking, EPR laws aim to shift the cost of waste management of covered products to the product manufacturer and thereby encourage product design changes that reduce landfill waste, support recycling and reuse, and create a more circular economy.

In an effort to address growing waste challenges presented by packaging and single-use plastics, a growing number of US states have passed EPR laws in recent years specifically focused on those product categories. To date, seven states have passed EPR packaging laws: California, Colorado, Maryland, Maine, Minnesota, Oregon, and Washington. Several other states, including Illinois, Rhode Island and Hawaii, have passed laws requiring EPR needs assessments and feasibility studies. At least 12 other states have introduced EPR bills in 2025.

These state EPR packaging laws are in different stages of implementation. Oregon was the first state to require covered companies to submit their initial report by March 31, 2025. Colorado’s reporting deadline recently passed on July 31, 2025. By contrast, Maryland and Washington are new to the EPR landscape, having just passed their laws in May 2025.

These EPR packaging laws typically impose fees on covered companies based on the weight of covered products sold in a particular state (and sometimes with consideration of environmental impact of the packaging), which fees are then used to fund waste management activities within the state, typically at the local level. Implementation of EPR programs often is managed by a Producer Responsibility Organization (PRO), which collects fees from covered companies that are then used for the end-of-life management of the covered products. PROs must operate in accordance with a state-approved plan. The Circular Action Alliance (CAA) has been designated as the PRO to administer a number of state EPR packaging programs.

What products are covered?

One of the challenging aspects of state EPR packaging laws is the variability in scope, both in terms of what products are covered and what companies fall within the purview of the regulatory requirements. All of the state EPR packaging laws that have been passed to date apply to packaging like boxes and single-use bags, though the specific regulatory definitions vary by state. Certain states also regulate paper products like magazines, flyers and printing and writing paper, as well as single-use food service ware, including utensils, single-use food packaging, and food service trays. Most laws exclude certain types of packaging, such as packaging for medical products or for infant formula.

Who is a “producer”?

Determining who qualifies as a producer under the relevant EPR packaging laws is essential to understanding how obligations are allocated across supply chains. The central EPR obligations, including requirements to join and contribute financially to a PRO, fall on producers. While EPR laws across states adopt broadly similar terminology and concepts, they differ in the definitional details. Consequently, EPR-related requirements may fall on different parties – the brand owner, importer/distributor, manufacturer, or even some permutation of those entities – depending on the state. For example, as highlighted in a guidance document from the CAA, an arrangement where Manufacturer A produces branded paper grocery bags that it sells to Retailer B results in different compliance obligations in Oregon and Colorado. In Oregon, Manufacturer A is the producer as the entity that first sells the packaging in the state. By contrast, Retailer B is the producer under the Colorado program as the brand owner directing the manufacturing of the bags.

Additionally, an entity may be a producer for one set of products or transactions but would not be a producer for others. Consider the example of a brand owner that undertakes the manufacture of its top-shelf line of products in its own factories, but licenses out its trademarks for other companies to produce a discounted line. In such cases, the brand owner may qualify as a producer in respect of some lines of products but not for others.

Importantly, under all state EPR packaging laws, the focus is on one or more of the brand owner, manufacturer, importer, or distributor of the packaged product, rather than the packaging itself. Typically, the brand owner of the packaged product is the first in line for compliance.

Impact on franchise systems and supply chains

Franchisors should carefully consider the implications of state EPR packaging laws on their operations. As a first step, franchisors should determine applicability of these EPR laws to their products, noting the variability across state EPR packaging programs. Franchisors that operate in sectors that generate significant volumes of packaging, single-use products and other materials targeted by EPR laws – restaurants, food service, logistics and retail — will be especially likely to be caught by these EPR laws. But, given the broad reach of these state laws, other industries may end up ignoring these EPR directives at their peril.

Once a business has settled the question of which EPR laws apply, they should turn their attention to the question of who is the “producer” of the covered products and thus who ultimately will be responsible for legal compliance. Some states including Colorado, California and Washington specifically address the franchise business model, imposing the compliance obligations on the franchisor if the franchisor has franchisees that operate in the state. By contrast, Oregon’s EPR packaging law is notably silent on the franchise model, and thus requires close consideration of the covered producer categories in relation to the covered products at issue.

With a clearer picture of what obligations apply to whom, franchisors can take steps to ensure compliance with and mitigate risk under state EPR laws. Ultimately, there is not a one-size-fits-all approach to EPR compliance. Even if it is determined that EPR compliance sits with the franchisee, franchisors may still choose to assume those compliance obligations. This decision may be due to concerns that the franchisees (particularly systems that have dozens or hundreds of small business franchisees) may be ill-equipped to properly monitor compliance or may be driven by a desire to ensure a cohesive compliance approach across the brand. Indeed, we are seeing a number of large franchisors opt to control EPR compliance for these initial reporting periods in response to such factors. Nevertheless, those franchisors also acknowledge that they may shift this regulatory burden to franchisees – as state laws permit – once the regulatory programs become more established and key implementation issues are addressed. On the other hand, certain franchisors are taking a close look at their supply chains to identify opportunities to shift this compliance obligation to their suppliers.

Regardless of the approach taken, communication is important. Franchisors should communicate clearly with suppliers, franchisees, and other business partners to achieve a common understanding of where the EPR responsibilities rest. If it is determined that a franchisor is a producer, the franchisee may seek a representation that the franchisor will meet all of its obligations under the relevant EPR law. Franchisors may also be forced to make strategic operational, sourcing and licensing decisions to mitigate its exposure to EPR requirements or the related costs of compliance.

Implications of ongoing litigation

In July 2025, the National Association of Wholesaler-Distributors (NAW) filed a lawsuit in the US District Court for the District of Oregon against the state of Oregon, arguing among other things that Oregon’s EPR law improperly vests authority in CAA to establish fees and to implement the EPR program without specific legislative standards. The lawsuit also alleges that the Oregon law violates the dormant commerce clause of the US Constitution by burdening out-of-state producers, improperly interfering with interstate commerce, and unduly burdening national markets. The state has obtained several extensions to respond to NAW’s complaint. In November, NAW filed a motion for a preliminary injunction to suspend the state law pending the outcome of the litigation. It will be important to monitor the outcome of this litigation, as well as whether lawsuits may be filed in other states given the similarities across the EPR laws.

Practical steps

The complexity of multiple emerging EPR regimes can be daunting for franchisors and franchisees alike. But by following a few core practices, compliance with EPR laws can be made more manageable.

• Know where you stand: The first step in EPR law compliance is understanding which EPR laws apply to the business and who is considered a producer under those relevant laws.
• An integrated approach: Complying with EPR laws requires multi-functional coordination, bringing together teams from your supply chain, contracting, operations, sustainability, brands, and risk business units. Be sure to have the right people onboard as you assemble your EPR team.
• Communication is key: It is critical to establish and maintain reliable communication with business partners, including suppliers and franchisees. This will help clarify who is the producer under EPR laws and will ensure that obligations are met. Relatedly, if a franchisor opts to assume EPR compliance obligations in the short term, the franchisor is well advised to communicate that position to its franchisees and also indicate such approach may be revised in the future.
• Franchise agreements: Understanding a franchisors liability vis-à-vis its franchisees for compliance with EPR laws is crucial. Where a franchisor mandates that a franchisee source covered materials (whether branded or not) from a particular source, the franchisor must determine whether it has direct responsibility, whether it’s the supplier’s responsibility and how and whether to monitor compliance to avoid potential liability or brand risk. Including best practice language in franchise agreement templates for new deals that allow franchisors maximum flexibility to ensure compliance while shifting responsibility is also advisable.
• Mark your calendar for compliance: The EPR landscape is developing quickly, with a steady stream of new state bills under consideration each year. State agencies are also actively engaging in rulemaking in anticipation of key EPR provisions becoming effective in the coming years. Franchisors should be sure to stay abreast of these developments and to note any relevant deadlines. Industry groups can be a valuable resource to assist with this assessing the changing regulatory landscape.