Earlier this year, California’s state Senates passed a bill that had the intention of providing franchise owners a stronger hand when it comes to dealing with the franchise systems. Although the bill was stalled in the Assembly, franchise owners and their new ally the Service Employees International Union are back at it, pushing an amended version of the bill. The amended version would make it increasingly difficult for franchisors to terminate their franchisees, bringing California closer to states such as Hawaii and Washington who are known for their “fair franchising” laws. Various labor groups are in support of this bill, under the joint theory that independent franchises will equate to higher employee satisfaction rates.
The International Franchise Association, the chief lobbying group for franchises, is running against the bill insisting that giving franchise owners more independence could have harmful consequences on the brands by allowing business that fail to operate within brand standards to remain open. “Franchisors are going to be gun-shy about enforcing their rights,” says Charles Internicola, a franchise lawyer who agrees that the bill would allow poorly run operations to harm a brand’s reputation.
While franchise owners hire, fire and pay wages like any employer, they are also scrutinized by a detailed rules dictated by franchise systems. Franchise owners who fail to follow the set rules exactly can have their licenses revoked. The bill in motion would prohibit franchisors from terminating a franchise contract without having a “substantial and material breach.” According to Keith Miller, chairman of the Coalition of Franchise Associations, the fair franchising movement is intended to provide franchisees security by requiring legitimate reasons for the termination of a franchise contract.
The Extent of a Franchisor’s Control
When buying into a franchise, many people are drawn by the idea of working for themselves. The reality is that corporate systems often control a majority of the franchisees’ business. The extents to how these systems control the business ranges from restrictions on where individual stores can purchase supplies, the number of employees required on staff for any given shift and even the frequency in which employees must clean the bathrooms. “Many of them come to realize that the only thing they’re independent in is being responsible to pay the bills,” says Pete Lagarias, a California based lawyer who has been lobbying for the bill.
This unbalanced level of control over individual owner’s behavior has led to the justification of labor-friendly policies that both sides oppose.
Franchise Workers Push for More
As bills are being passed and the move towards a more fair work environment is becoming a hot button issue that reaches from the workers to the employers to the head of corporations changes are going to be made. It has been a few years since the push for an increase in workers’ wages and unionization came into the forefront of the minds of many, not just in the United States, but globally. Workers have been joining forces to have their voices heard and get the things that they seek.
The president of the Service Employees International Union, Mary Kay Henry has praised the workers that have pushed forward to achieve the goals that they have set forth, that being a raise in their wages as well as the formation of unions for fast food workers. In the first ever, fast food workers convention in July of this year, there were an estimated 1,300 that traveled to Chicago’s outskirts to discuss the progress that was made and where they were going.
During this convention, Kay stated, “The people in this room tonight have changed our country.” She went on to say, “When this movement started 21 months ago with the first strike in New York, people thought $15 an hour was a fantasy. They laughed at you. But now, because of your courage and your hard work, it will become a reality.”
If things continue in a forward movement with the franchise owners, fast food workers, and the unions all working together, the potential for an industry that is providing all members of the industry with what they need is possible.
Franchise owners, corporate executives, and the workers that have been fighting for an increase in pay and unionization for the past two years or so, can all achieve what they each find to be their personal goals. The money can continue to come in for both the franchise owners and the executives, leaving them with the bottom line that they seek as the men and women in charge. In turn, the workers that spend their work hours in these restaurants will be being paid a livable wage where they can afford to live above the poverty line and not below it, which is where many of them sit today.