“The battlefront starts with so-called “joint employer” or “joint liability” standards, which the National Labor Relations Board (NLRB) is expected to officially impose soon. This would essentially require franchisee employees to be counted as employees of the franchisor parent corporation by holding the franchisor liable for the actions of its individual franchisees. It also would make it easier for unions to organize at the parent company level, rather than via individual franchise outlets. Progressives have been pushing for years to impose joint employer standards onto the franchise model, and the Biden administration is echoing the Obama administration in following through (after a brief hiatus during Donald Trump’s presidency).”
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“Left-leaning policy makers are not stopping at the federal level, either, as states like California are also considering joint liability bills. Last year, when California passed its controversial FAST Recovery Act, which not only raised minimum wages for restaurant workers to $22 an hour but also created a 10-member Fast Food Council to oversee and regulate the entire industry, the legislation also included new joint liability rules.
The joint liability language was removed from the bill before it passed, but once the franchise and restaurant industry fought back by getting a referendum for the FAST Act to qualify for the 2024 ballot, liberal state lawmakers suddenly reintroduced a stand-alone joint liability bill. The joint liability idea is already spreading beyond the Golden State—ironically known as the birthplace of fast food—to states such as New York.”…
“Being the proprietor of a franchise has long been seen as one of the preeminent—and most readily accessible—ways to achieve the American dream. Franchise ownership often requires lower startup capital compared to other types of businesses and provides training in the requisite expertise and knowledge needed to operate the business.
As a result, the franchise model is recognized as providing more opportunities for those in underrepresented communities. This is reflected in the ownership numbers, as 30 percent of franchises are minority-owner compared to only 18 percent of other types of businesses. Some have even called the franchise system “the safety net of the economy,” since a recently laid-off worker in an unrelated sector can turn around and buy a franchise and receive the guidance needed to succeed.
According to the International Franchise Association, the Obama-era version of the joint employer standard cost franchises over $33 billion annually and resulted in 376,000 lost job opportunities. Perhaps most alarmingly, it led to an over 90 percent increase in litigation against franchises.”