Matthew Hollek, a Subway franchisee in Ballard, a neighborhood in Seattle, joined KIRO talk radio host Jason Rantz in studio on June 24th to discuss the franchise business model, how it compares to independent small businesses and why he is fighting to get businesses like his classified as a small business.
Previously, Hollek had published an op-ed in the Seattle Times against the Seattle ordinance which discriminates against franchises and improperly treats them not as the small, locally owned businesses they are, but as large, national companies. “Punishing small business owners who went into franchising is simply unfair in the new minimum wage law,” Hollek wrote. He continued the conversation on last week’s radio interview.
Hollek explains that Subway only provided him with an operational scheme. Everything else was up to him to figure out. “Outside of (brand) consistency, everything is on me,” he told Rantz. Hollek emphasizes the fact that he is exactly the same as every other small business anywhere in the nation. The only difference is that he is affiliated with a branding company, Subway.
According to Hollek, by passing this ordinance and based on the structure of the franchise model, corporate won’t be negatively affected the way the independently-owned stores will be. “The very people that Seattle City Council member Kshama Sawant has been targeting, may actually make money, yet the small business people operating the stores will suffer,” said Hollek. Sawant’s response to this claim previously has been that franchisees should renegotiate their contracts. Hollek explains that he just doesn’t have that ability, nor does he believe that he or the franchisors should be obligated to change a business model that has continued to demonstrate growth over the last 50 years.
The IFA has firmly opposed the ordinance and has filed a lawsuit since it passed on June 2. IFA claims that Seattle’s new minimum wage law unconstitutionally discriminates against franchisees by categorizing them as big businesses even when they are small and independently owned. Hollek stood by this assertion in the radio interview saying, “I don’t have a problem with the law as long as it is implemented on an even playing field.”
The radio segment can be heard on KIRO’s website here.