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Latest News - April 2015

April 30, 2015
Labor Organizers Seek Unusual Ally in Fast-Food Franchisees
Source: ABC NEWS

Labor organizers are opening a new front in their campaign for a $15-an-hour wage for fast-food workers with a push to mobilize an unusual ally: franchisees.

The Service Employees International Union on Thursday launched a website in hopes of building a national network of fast-food franchisees who want stronger protections for their businesses. The push has the potential to create more unrest within the ranks for companies like McDonald's, which are already dealing with ongoing demonstrations calling for higher pay and a union for workers.

The International Franchise Association, which represents franchisors like McDonald's, Subway and Wendy's, said in a statement that franchisees indicate "incredibly high satisfaction rates." It noted that data from the Federal Trade Commission shows franchisees renew their contracts at "an extremely high rate."

Support from the SEIU, the nation's second-largest union, could nevertheless give franchisee advocates more clout in changing what they say is an imbalance of power. Franchisee advocates say they're at the mercy of companies that can strip them of their livelihoods if they step out of line or speak out against corporate decisions.

Still, the push by the SEIU marks an uneasy alliance, since franchisees are often small-business owners who oppose unions.

"It's an odd relationship, let's face it," said Keith Miller, a Subway franchisee in Sacramento, California, and head of the Coalition of Franchisee Associations, which is working with the SEIU on the effort.

Miller added franchisees may not be able to raise pay for workers even if they wanted to, given the cost pressures they're put under from companies on matters like value menus.

The SEIU's outreach to franchisees is just the latest move in a campaign to win pay of $15 an hour and a union for fast-food workers. The effort began in late 2012 and involves a range of tactics intended to build pressure on McDonald's, including demonstrations in a growing number of cities and multiple lawsuits on behalf of workers in the U.S. and abroad.

The efforts have been complicated by the franchising model that dominates the fast-food industry, however. McDonald's Corp., for instance, has more than 3,000 franchisees in the U.S. who run about 90 percent of its more than 14,300 locations. A representative for McDonald's did not immediately respond to a request for comment.

In exchange for paying a variety of fees and following certain operational guidelines, franchisees get to become business owners with proven brands. But the arrangement can lead to natural tensions; franchisees may not agree with decisions by the company on matters like new menu prices or remodeling investments.

One memorable public spat was when Burger King franchisees sued the company in 2009 over a $1 double cheeseburger they said they were losing money on. The suit was eventually settled after a new owner took over the company and worked to mend relations with franchisees.

In the meantime, the SEIU is also trying to upend the position by McDonald's Corp. that the company is not responsible for employment decisions at franchised locations. The move is seen potentially easing the way for negotiating on behalf of workers across an entire chain, rather than dealing with a patchwork of franchisees.

The National Labor Relations Board's general counsel said last year that McDonald's could be named as a "joint employer" with its franchisees in charges filed by worker groups over alleged labor violations. The hearing on the case began last month and is expected to be a lengthy legal battle.

Underscoring the complexity of the partnership between franchisees and the union, Miller of the Coalition of Franchisee Associations said during a conference call with reporters that his group was "not comfortable with that (joint employer) ruling at all."



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