Fast Food Workers Plan Another Round of Coordinated Protests this Week

 

 

Employers at fast food chains around the nation should brace themselves for a series of protests and acts of civil disobedience that will occur this Thursday, September 4.  The strikes, organized by members of the “Fight for 15″ movement, are part of the nationwide crusade to raise the minimum wage. The Fight for 15 organization carried out a similar campaign to raise wages last spring. There are few details on the nature of the protests that will reportedly occur in as many as 150 cities across the country.

Such organized and concerted efforts are part of a broader trend to effectuate changes to wages and working conditions outside of the traditional labor union construct. For example, so-called “worker centers”– otherwise known as union front organizations (UFOs) – are increasing in number, and working in conjunction with unions to achieve typical labor organization goals.  UFOs are generally non-profit organizations offering a variety of services to their members, including worker advocacy, lobbying, employment services, and legal advice.  The Fight for 15 movement has union support, particularly from the Service Employees International Union (SEIU).  Last year, the AFL-CIO vowed to work with such labor offshoots.

Employers must be careful not to interfere with employees’ lawful Fight for 15 activities.  Under Section 7 of the National Labor Relations Act (“NLRA”), employees have the protected right to engage in concerted activity for the purpose of mutual aid and protection.  These rights apply to both union and non-union employees.   Concerted activity includes individual employees seeking to initiate group action, or a group of employees trying to bring group complaints to management, regarding employment related concerns.  Any adverse employment action taken in response to an employee’s participation in Fight for 15 could be an unfair labor practice if it interferes with, coerces, or restrains the employee’s rights guaranteed by Section 7 of the NLRA. Remedies for unfair labor practices include reinstatement with full back pay and interest.  Employers also are required to post a notice to all employees outlining the NLRA violation and the remedy.

Meanwhile, in a round of Labor Day speeches, President Obama and Labor Secretary Perez reiterated their support to increase the federal minimum wage to $10.10 per hour. At least 13 states and the District of Columbia have increased their minimum wages in recent months, and a handful of states and localities have placed the question of whether to raise the minimum wage on the November ballot.  It is expected that issues such as income inequality and wage theft will be key talking points for many Democrats going into the November elections.

The Philippines Takes Center Stage with Franchise Asia 2014 and U.S. Franchise Trade Mission

 

Franchise Asia

A panel including William Edwards, Edwards Global Services CEO and IFA Director of International Affairs Josh Merin take turns speaking to the general session of Franchise Asia about international growth.

FAPHL2014 INTERNATIONAL EXPO  (26)

Mission participants enjoy a VIP tour of Franchise Asia’s Expo.

The Philippines became an increasing center of the franchising world’s attention when it hosted one of the franchising’s biggest events in Southeast Asia, Franchise Asia 2014 and a U.S. franchise trade mission. The show was originally scheduled to take place July 16-20 at the SMX Convention Center in Manila, Philippines but took place July 17-20 because of the typhoon that hit the Philippines on the 16th.  Recognized as the biggest franchise show in the Philippines each year, Franchise Asia continued not to disappoint, welcoming over 500 exhibitors, including IFA member and trade mission participant Tutor Doctor, and an estimated 50,000 attendees.

Due to the typhoon, the first day of Franchise Asia was cancelled. However, the Philippine Franchise Association’s staff worked diligently through the night to reconfigure the program. Their hard work paid off when Franchise Asia opened its doors on the morning of the 17th and soon saw its convention hall filled with hundreds of attendees from the Philippine franchise community. These attendees demonstrated the remarkable resilience of the Filipino people, by leaving their homes (many without power) and traveling through a city just hit by a typhoon to fill the hall.

The Filipino franchise market is highly mall focused due to weather and pollution. Jan Paul Custodio, Senior Director CB Richard Ellis Philippines told trade mission participants that the Philippines’ has 1/10th the real estate costs of Hong Kong or first-tier Chinese cities.  It also has the lowest mall real estate prices in Asia, 20 times lower than Beijing.  Market challenges include public infrastructure and high energy costs.  According to a US Embassy briefing, the number one drag on growth is corruption, especially outside of Manila.

Bill Edwards, Vice Chair of the IFA’s International Committee and CEO Edwards Global Services and IFA’s Josh Merin addressed the general session of Franchise Asia on July 17. In “Conquering the Global Market with Your Brand” they presented IFA and its experience with international franchising including strategy and tactics for franchising internationally.  The presentation included international development models, what to look for in an international licensee and considerations before going international.   The event included Certified Franchise Executive (CFE) classes and this year’s CFE graduation.

Trade Mission attendees were able to tour Franchise Asia on Saturday, July 19th.

Franchising Making Gains in Manila

TMBE

Trade Mission participants line up to speak during a reception at the US Embassy in Manila.

Group

The trade mission delegation and U.S. Embassy staff celebrate a successful event.

Ambassador Goldberg

From left, U.S. Ambassador Philip Goldberg, IFA Director of International Affairs Josh Merin and Senior Commercial Officer Jim McCarthy address a high-level networking reception in the ballroom of the U.S. Embassy, Manila.

As typhoon Rammasan was making its way towards the Philippines, franchise executives from all over the world were headed to make waves in Southeast Asia as IFA, in partnership with Franchise Times and the U.S. Commercial Service, led a delegation to explore opportunities in the Philippine franchise market July 17-20. Mission participants braved delayed and rerouted flights while those who arrived early relied on the Ascott Makati hotel’s generators to get them through the storm.

As the storm calmed and the sun started to shine, the mission kicked off with a visit to the historic US Embassy in Manila. With the Philippines becoming increasingly a consumption-led and service-oriented economy, the franchise sector is a powerful tool for local development. The mission allowed 14 dynamic American franchise concepts to explore the expanding Philippine market. The goal is to investigate partnership opportunities with master franchisees and area developers in the Philippines. Companies such as Edible Arrangements, Jan-Pro, Panda Express, PJ’s Coffee, Russo’s NY Pizzeria, Tilted Kilt, Title Boxing Club, Tutor Doctor, World of Beer, and WOW Café are ready to meet one-on-one with potential candidate companies that can help them expand their product to the region.

There are deep historical and cultural ties between the Philippines and the US.  Currently, there are 4 million Filipinos living in the US and 400,000 US citizens living in the Philippines.  This drives Filipino familiarity with US brands as well as an appetite for them. US Embassy employee, Kelan Evans of the Foreign Agricultural Service, referred to the US as the Philippines’ #1 supplier and consumer of agricultural goods. Kristin Keedler from the Embassy’s’ Public Affairs Section stated that there is a very positive perception of Americans and US culture in the Philippines.

While US franchises takes the lead and are welcomed with open arms, the Filipino market is shifting. According to Samie Lim, Chairman Emeritus, Philippines Franchise Association, “US franchises once dominated the Philippines, but Asian franchises are now coming in very fast.  The Filipino franchise community has grown a great deal in sophistication.” GDP growth is second only to China in the region.  This growth is projected to continue for at least 5 years and looks sustainable. “President Aquino has been an economic reformer and while 40% of the population lives below the poverty line, things seem to be changing,” stated Joel Ehrendriech, Economic Counselor, US Embassy.   With a steadily growing economy, the Philippines’ is a prime franchise market with a growing sophistication of the business community and a desire for US brands. US Deputy Chief of Mission Brian Goldbeck said, “The market is poised, you are right to look at this market now.”

Mission participants spent the day of the 18th in matchmaking meetings with potential business partners arranged by the US Commercial Service.  Companies met with as many as 12 potential partners in one hour blocks over the course of the day.  The meetings were conducted in private rooms at the Ascott Makati hotel.

Afterwards, US Ambassador Philip Goldberg hosted the delegation and leaders from the Filipino business community for a well-received catered networking reception with live music. Attendees included the Philippines’ Secretary of Finance, Cesar Purisma and Chairman Emeritus of the Philippines Franchise Association and “Father of Philippine Franchising” Samie Lim.  Ambassador Goldberg, Senior Commercial Officer Jim McCarthy, and Josh Merin, IFA’s Director of International Affairs, made remarks during the event. Merin then introduced the mission participants who each made brief remarks. Reporters from 12 media outlets, including the two largest newspapers in the Philippines visited the hotel to cover the mission.

IFA Remembers DLA Piper Partner and IFA General Counsel Dennis E. Wieczorek

 

 

Dennis E. Wieczorek, CFE, age 62, respected attorney at DLA Piper for 37 years, chairman of its Franchise and Distribution Practice, died July 11.  The sad news resulted in numerous outpourings of sadness, support for the family and memories of a well-esteemed friend for his positive business and personal influence.

The DLA Piper law firm and its predecessor firms have served as IFA’s General Counsel since the start of the association, 54 years ago.  His areas of concentration included U.S. and international franchising, licensing, antitrust and distribution law matters.

Wieczorek, DLA Piper partner, began work on IFA matters from almost his earliest days at the firm, and formally assumed the role of general counsel several years ago.  He was an active participant during IFA’s Annual Conventions and Legal Symposiums, as well as IFA board meetings.  In addition to his participation on the IFA board and its related committees, Wieczorek participated on the association’s Legal/Legislative Committee and Legislative Action Group.

“Dennis Wieczorek’s professionalism, expertise and friendship will be truly missed at IFA,” said IFA Pres. &CEO Steve Caldeira, CFE.  “His keen intellect, sound judgment, steady demeanor and focused diligence in the critical efforts that we are making to defend franchising in legislative and judicial arenas at the federal, state and municipal levels has made the IFA and the industry better and stronger. Dennis was, quite simply, indispensable.”

Wieczorek’s franchise practice excellence has been recognized by research publisher Chambers & Partners in Chambers Global and Chambers USA; The International Who’s Who of Franchise Lawyers; The Best Lawyers in America, as well as being named Best Lawyers’ 2011 Chicago Franchise Lawyer of the Year.  He was honored as Best Lawyer for 2014 in Chicago’s Best Lawyers magazine and as a repeat Franchise Times Legal Eagle.

In lieu of other expressions of sympathy, please make your contributions to the Ovarian Cancer Research Fund, 14 Pennsylvania Plaza, Suite 1710, New York, NY 10122.

 

IFA Files Lawsuit Against Seattle for Equal Treatment

 

 

SEATTLE, June 11, 2014 – The International Franchise Association (IFA), a Washington, D.C.-based trade group, and five franchisees today filed a lawsuit in U.S. District Court in Seattle seeking to block Seattle’s recently enacted law to increase to the city’s minimum wage to $15 per-hour. The complaint alleges the new law illegally discriminates against franchisees and improperly treats them not as the small, locally-owned businesses they are, but as large, national companies.

Seattle Mayor Ed Murray last week signed the law, which requires large businesses, defined as those with more than 500 employees, to raise the minimum wage they pay their employees to $15-an-hour over three years beginning on April 1, 2015.  Smaller businesses have an extra four years, or a total of seven years, to phase in the wage increase.

IFA’s lawsuit asserts that the Seattle statute unfairly requires Seattle’s 600 franchisees, who own 1,700 franchise locations and employ 19,000 workers, to meet the three year deadline for large businesses simply because they operate as part of a franchise network. The lawsuit argues that the Seattle ordinance defies years of legal precedent clearly defining a franchisee as an independent local business owner who operates separately from the corporation that provides brand and marketing materials.

“Hundreds of small, locally-owned businesses and thousands of their employees are unfairly threatened by Seattle’s new law. We are not seeking special treatment for franchisees, we are just seeking equal treatment. The city’s minimum wage statute arbitrarily and illegally discriminates against franchisees and significantly increases their labor costs in ways that will harm their businesses, employees, consumers and Seattle’s economy,” said Steve Caldeira, IFA president & CEO. “We hope the court will block the ordinance to save jobs and prevent Seattle from unfairly singling out one type of business – a franchise – for punitive treatment.”

“Seattle’s new minimum wage law unconstitutionally discriminates against franchisees by categorizing them as big businesses even when they are small and independently owned. A single hotel or restaurant can be treated as if it employs more than 500 people even when it actually employs only 15 people,” said Paul D. Clement, a partner at the law firm Bancroft PLLC and a former U.S. Solicitor General. “We’re asking the federal court to stop this unfair attack on small business owners who happen to be franchisees.”

The complaint names as defendants the City of Seattle and the Director of the Department of Finance and Administrative Services. It seeks an injunction to stop the law from going into effect as scheduled on April 1, 2015. The plaintiffs are IFA; Charles Stempler, owner and operator of two AlphaGraphics stores in Seattle and three elsewhere in Washington State; Katherine and Mark Lyons, owners and operators of BrightStar Care of North Seattle; Michael Park, General Manager and owner of a Comfort Inn in Seattle and president of the Korean American Hotel Owners Association (KAHOA); and Ronald Oh, General Manager and an owner of a Holiday Inn Express in Seattle.

The lawsuit alleges that the ordinance violates the Equal Protection Clause of the U.S. Constitution by arbitrarily discriminating against small businesses simply because they are franchises. For example, a non-franchise company with 450 workers is categorized as a small employer and gets extra time to comply with the law. But a franchisee with just five employees is considered a large employer – and gets less time to raise its wage floor – if its franchise network employs more than 500 workers nationwide.

The lawsuit also contends that the ordinance violates the Commerce Clause of the U.S. Constitution because it imposes regulations based partly on business occurring in other states. For instance, if a Seattle franchisee has only a few workers in Seattle, but its franchisor’s network has more than 500 workers out of state, it is classed as a large employer and gets tougher treatment. Under the new law, a Seattle-based business that happens to be associated with a national franchise can be forced to pay a higher minimum wage than a non-franchise business of similar size.

The complaint also argues that discrimination between franchise and non-franchise businesses is prohibited under the Washington State Constitution and that the Seattle ordinance imposes health care changes that violate the federal labor statute called the Employee Retirement Income Security Act or ERISA.

Go to SeattleFranchiseFairness.com to learn more about the issue and the coalition of Seattle small business owners working together to oppose the franchisee provisions in the city’s minimum wage law. The site, which will be updated regularly, includes video, a petition and an outreach tool for supporters to contact the City Council. Read the full complaint here. Case number: 14-848  

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