The 2015 International Franchise Association Conference recently held in Las Vegas served as a reminder of the growing issues with organized labor in the franchise industry. In particular, the traditional roles of franchisors and franchisees are being challenged by labor unions alleging franchisors and their franchisees are violating the rights of the franchisee’s employees.
The arguments are taking form on two fronts:
- Those supporting an increase in the minimum wage are seeking to classify franchise owners differently from traditional small business owners by aggregating all of the employees across a franchise system under one umbrella to require franchisees implement higher minimum wages more quickly than their competitors. The result disproportionately affects, and disadvantages, franchisees vis-a-vis their competitors.
- A National Labor Relations Board’s General Counsel ruling that McDonald’s is a “joint employer” of their franchisees’ employees allows employees to assert claims for wage violations against McDonald’s and its franchisees collectively, and, if successful, would support unionizing employees within a franchise brand.
In response, the IFA announced renewed lobbying efforts and a grassroots education outreach addressing minimum wage and joint-employer issues through the Coalition to Save Local Businesses. Franchisors can learn more about these efforts at www.savelocalbusinesses.com.