Continuing the Conversation About Seattle

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.

 

IFA Statement on Federal Contractor Minimum Wage Rules

IFA Statement on Federal Contractor Minimum Wage Rules

WASHINGTON, June 16—International Franchise Association President & CEO Steve Caldeira, CFE, released the following statement regarding the U.S. Department of Labor’s proposed rule to raise the minimum wage to $10.10 per hour for federal contract workers:

“The Department of Labor’s proposed rules raising the minimum wage for contract workers, including employees of franchised establishments on military bases, will lead to lost jobs, less sales and fewer hours for employees. Franchisees that are forced to pay a steeply increased minimum wage, while lacking the flexibility to increase prices, will be unable to renew their contracts, closing franchise establishments and depriving military communities of jobs often held by military dependents.

“We are extremely disappointed in the proposed rule, and we hope the Department of Labor will provide sufficient time for businesses to submit comments, with the goal of mitigating the proposal’s negative impact on franchised small businesses.”

In February, President Barack Obama issued Executive Order 13658, directing the Department of Labor to issue regulations to increase the minimum wage for workers of federal contractors to $10.10 per hour.

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About the International Franchise Association The International Franchise Association is the world’s oldest and largest organization representing franchising worldwide. Celebrating over 50 years of excellence, education and advocacy, IFA works through its government relations and public policy, media relations and educational programs to protect, enhance and promote franchising. Through its media awareness campaign highlighting the theme, Franchising: Building Local Businesses, One Opportunity at a Time, IFA promotes the economic impact of the more than 825,000 franchise establishments, which support nearly 18 million jobs and $2.1 trillion of economic output for the U.S. economy. IFA members include franchise companies in over 300 different business format categories, individual franchisees and companies that support the industry in marketing, law and business development.

1501 K Street, N.W., Suite 350   Washington, DC 20005  USA

Phone: +1 202/628-8000    Fax: +1 202/628-0812     www.franchise.org

Franchise Trade Mission enters the Urban Safari

 

 

Our third day of the trade mission was billed as the Urban Safari, site visits to retail outlets in surrounding areas of Johannesburg.  The group was joined by Mark Ruffley and Danisa Shetlele of the Pareto Group, which is one of South Africa’s premier shopping center investors and a leading retail property industry player.  We would be visiting  Southgate Mall in Soweto; Cresta Shopping Centre in Randburg and Sandton City Shopping Centre.  Mark and Danisa wanted to show the diversity of the malls in the areas which serve the diverse communities in Johannesburg.

Before we arrived at the first stop in Soweto, our hosts offered a surprise stop at a truly significant landmark in South Africa.

The Mandela House, at 8115 Orlando West in Soweto, a modest four room home was Nelson Mandela’s first home which he and his first wife Evelyn moved into in 1946. After he and his first wife were divorced, he was joined in the house by his second wife Winnie.  The home serves as a visitor attraction to tell the story of Former President Nelson Mandela and what he stands for: human rights, democracy, reconciliation, mutual respect and tolerance among the people of South Africa.

I was struck by one sign on the wall of the home that stated:

“In judging our progress as individuals, we tend to concentrate on external factors such as one’s social position, influence and popularity, wealth and standard of education…but internal factors may be even more crucial in assessing one’s development as a human being: humility, purity, generosity, absence of vanity, readiness to serve your fellow men – qualities within the reach of every human soul.” Nelson Mandela in a letter to Winnie Madikizela Mandela, 1977

Nelson’s home was a truly moving experience and captures the soul of a life committed to helping others and equality – a place not to miss when you are in South Africa.

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We then proceeded to Southgate Mall to see the first of three malls for the day.  Southgate was built in 1990 and has 170 stores and has served the Southern Johannesburg communities for more than 20 years.  It represents the lower of the demographic scale for South African customers with 61 percent falling within LSM four-ten categories.

Cresta was the next property the group toured.  It was built in 1976 and currently has 270 stores.  They are currently developing a new food court which will greatly expand the number of food choices the centre has to offer.  75 percent of the shoppers fall within the LSM four-ten+ categories.

Finally, Sandton City was the last stop on the tour, originally opened in 1973 and includes five levels and 328 stores.  This centre rivals the finest malls in the world for luxury goods and services with top fashion retailers and a full complement of food and beverage available.  This center should be on the list to check out for any American franchisors wanting to build market share at the top of the market in South Africa.

The day ended with a group of the delegates heading to a local Lion Park to experience what many who come to South Africa crave-lions, giraffes, leopards and baby lion cubs that the delegates had the opportunity pet (before they get too big!).

Next Stop Nairobi, Kenya!

The Franchise Industry is Pleased with ACA Extension, But More Relief is Needed

 

 

The IFA is pleased with last week’s announcement by the Obama Administration to delay implementation of the Affordable Care Act’s (ACA) employer mandate and reporting requirements until 2015, but urges more relief for small businesses.

Before and after the law passed, the IFA has been relentless in meeting with key officials at the SBA, including administrator Karen Mills, the White House, including Senior Advisor and Assistant to the President for Intergovernmental Affairs and Public Engagement Valerie Jarrett, former domestic policy advisor Melody Barnes and the current advisor Cecilia Muñoz, former senior treasury advisor Gene Sperling, who is now the director of the National Economic Council, former healthcare advisor Nancy-Ann DeParle, as well as, Jeanne Lambrew, deputy director of the new White House Office of Health Reform, Mark Iwry Senior Advisor to the Secretary of the Treasury and Deputy Assistant Secretary (Tax Policy) for Retirement and Health Policy and Sol Ross, Director of Business Outreach at the Department of Health and Human Services.

The Administration announced that the delay has two goals: to allow regulators to consider ways to simplify the new reporting requirements consistent with the law and to provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees.  The IFA will carefully review the changes and offer additional recommendations to improve the law and will not let up on our efforts to change the definition of a full-time employee from 30 to 40 hours.

See below for media hits on IFA’s statement regarding last week’s delay:

  • Politico: “We are glad the administration listened to the concerns of businesses. Our members need more time to figure out how the law applies to them — and to get ready for it. We don’t want to forget there are significant changes needed in the law, so long term we are still going to pursue those.” IFA’s SVP Government Relations & Public Policy, Judith Thorman
  • National Journal: We applaud the administration for responding to our repeated requests to provide relief from the implementation of the Affordable Care Act. This will relieve the onerous and costly burdens of the ACA for one year, and allow the administration to reexamine its implications for small businesses.” – IFA President and CEO, Steve Caldeira
  • Washington Post: “We need to make sure that we don’t forget that this is still a problem. There is still the definition of [what constitutes] a full-time employee that we’re going to try and pursue. That’s a significant issue for us.”IFA’s SVP Government Relations & Public Policy, Judith Thorman
  • The Hill: “We definitely did not expect this; there was a lot of pressure. The law goes into effect in January, and all the regs aren’t out. Employers and employees were confused.”IFA’s SVP Government Relations & Public Policy, Judith Thorman
  • Politico: “Honestly, it was a surprise that it came this quickly. We certainly felt like we were making headway, but we didn’t get any hints until yesterday.”IFA’s VP Public Affairs and Chief of Staff to the CEO, Matt Haller

 

Firehouse Subs Public Safety Foundation Quick to React to Arizona First Responders

 

 

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As the wildfires in Yarnell Arizona continue to burn out of control, making it the deadliest wild land fire since 1933, 200 more firefighters arrived this week to help battle the blaze which was ignited by lightening.  Monday, the wind-driven wildfire claimed the lives of 19 elite firefighters of the Prescott Fire Department’s Granite Mountain Hotshots, making it the deadliest day for firefighters since the 9/11 attacks.  As makeshift memorials of flowers and American flags formed around the small mountain town, companies and near-by communities along with the American Red Cross wasted no time in answering the call to help those affected most.

IFA member Firehouse Subs through their Public Safety Foundation has already hit the ground from their Arizona restaurants, feeding first responders, volunteers and evacuees with their subs.  The Foundation will give 200 subs per day for the next week to the American Red Cross for distribution, while also providing fire, police and EMS departments the opportunity to request life-saving equipment, replacing any equipment lost in the fires. IFA, which has donated to the Foundation’s efforts, encourages all companies to reach out in any way possible to help those victims who continue to be affected by the fires.

“We will remember the 19 firefighters always as heroes, for protecting the lives of the citizens in their state,” said IFA President and CEO Steve Caldeira.  “The IFA is committed to helping and assisting in any way possible those who are on the ground aiding in the recovery operations in Arizona.”

The American Red Cross Grand Canyon is currently accepting monetary donations to help provide food, water and beds at two shelters at Yavapai College and Wickenburg High School.  The shelters are providing places to stay for those evacuated from their homes in the wake of the fire.

The IFA is keeping those impacted and families of the victims in our thoughts and prayers as firefighters continue to fight to control the deadly blaze. For more information of Firehouse Subs Public Safety Foundation, please click here.  Please visit America Red Cross Disaster Relief to help and get involved.