Senate HELP Committee Examines “Ambush” Election Rule

Yesterday the Senate Committee on Health, Education, Labor, & Pensions (HELP) held a hearing titled “Ambushed: How the NLRB’s New Election Rule Harms Employers & Employees,” to discuss a controversial new National Labor Relations Board (NLRB) rule to speed up union representation elections. In December the NLRB reissued a previously invalidated rule that dramatically decreased the amount of time employers and employees have to prepare for a union representation election. Many in the business community argue that the accelerated election schedule would prevent business owners from developing a complete response to a union proposal and compromise both workers’ privacy and ability to make an informed decision.

HELP Committee Chairman Lamar Alexander (R-TN) strongly condemned the reissued rule. “I refer to this as the ‘ambush election rule,’ because it forces a union election before an employer has a chance to figure out what is going on” Alexander said in his opening statement. “Even worse, it jeopardizes employees’ privacy by requiring employers to turn over personal information including email addresses, phone numbers, shift hours and locations to union organizers. Today more than 95 percent of union elections occur within 56 days of the petition-filing. But under this new rule, elections could take place in as few as 11 days.”

Senator Tim Scott (R-SC) echoed the Chairman’s concerns, adding “I would tell you that this rule is radical, it is ridiculous, and it is oppressive and it applies to all employers no matter how many employees you have… If there’s any sense of an ambush, as an employer trying to create jobs, help families, this rule stands front and center to that point.”

Earlier this year, the Coalition for a Democratic Workplace (CDW) filed a lawsuit to prevent the NLRB from implementing this new rule, which becomes effective on April 14. IFA sits on the management committee of CDW. A decision on the case is expected this spring.

Achieved video of the hearing, along with the witnesses’ testimony, can be found here.

Local Franchise Owners Warn Senate HELP Committee that Proposed NLRB Joint Employer Changes Will Reduce Entrepreneurship Opportunities

Today, the Senate Committee on Health, Education, Labor, and Pensions (HELP) held a hearing to examine the impact that National Labor Relations Board (NLRB) general counsel Richard Griffin’s recent actions could have on small businesses all over the country. Last year, Griffin filed an amicus brief in the Browning Ferris Industries case that recommended franchisors be considered joint employers with franchisees. Later, he authorized dozens of complaints against a franchisor, naming it as a joint employer with franchisees. The hearing, titled Who’s the Boss? The “Joint Employer” Standard and Business Ownership, featured testimony from two franchisees who told the committee members of the negative impacts that changes to current joint employer standards would have on their small businesses.

Gerald Moore, the owner of five The Little Gym franchises in Tennessee, North Carolina and South Carolina, explained that such a radical change to established labor law would fundamentally undermine the franchise relationship, saying that it “would mean that my franchisor would be jointly responsible for all of my employment-related liabilities… This will mean increased control and more day-to-day involvement by The Little Gym International.”

John Sims IV, who owns a Rainbow Station franchise in Richmond, Va., added that the general counsel’s actions were already having a negative impact on his business’ plans. “My wife and I have often talked about opening a second Rainbow Station location,” Sims explained. “However, the uncertainty as to what the future holds for franchisees and other small businesses has forced us to put that plan on hold. It simply does not make sense to try and grow our business at a time when we do not know what the future of our business will be.”

Although some Democratic members of the committee claimed the impact of such a change would be limited, HELP Committee Chairman Lamar Alexander (R-TN) agreed that a dramatic change in joint employer standards would have negative consequences that reached far beyond the franchise community. “This case doesn’t just affect franchisees, it will affect every business that uses a subcontractor or contracts out for any service.  That includes most of the 5.7 million businesses under NLRB jurisdiction in America – because most businesses contract for some service.”

You find an achieved webcast of the hearing, along with the witnesses’ testimony, here. If you would like more information on the joint employer issue, please visit IFA’s Labor and Workforce Hub. You can also be a part of IFA’s nationwide grassroots efforts to preserve the franchise model by joining the Franchise Action Network.

Making the Case for Franchising Just Got Easier

Franchise businesses are expected to grow and create more jobs at a faster pace than the rest of the economy in 2015 for the fifth consecutive year.

You recently scheduled a meeting with your local lawmaker, or even better, have plans to have your elected official visit your brand’s headquarters or a local unit.  Everything is moving along great. Or perhaps you’re been invited to speak before a community group or professional organization about your franchise business. You know your brand (or brands if you’re a multi-unit, multi-brand franchisee) inside out, but how about getting some stats that highlight the overall franchise industry?

That’s where the Franchise Business Economic Outlook: 2015, released yesterday by IFA’s Educational Foundation and IHS Economics, can help.  According to the report, franchise businesses are expected to grow and create more jobs at a faster pace than the rest of the economy in 2015 for the fifth consecutive year.

Here are some key findings from the business outlook:

  • Franchise businesses will add 247,000 new direct jobs this year, a 2.9 percent increase to 8.8 million direct jobs, over last year. That is on top of the 235,000 franchise jobs that were added in 2014.
  •  The number of franchise establishments will grow this year by 12,111, or 1.6 percent, to 781,794.
  • Economic output from franchise businesses is estimated to increase by 5.4 percent over last year to $889 billion.
  • The gross domestic product of the franchise sector is projected to rise by 5.1 percent this year, which is faster than the 4.9 percent GDP increase forecasted for the economy as a whole. The franchise sector will contribute about 3 percent of the U.S. GDP in 2015.
  • The IFA Franchise Business Index— which is a mixture of employment, sales and credit conditions — also rose smartly, especially at the end of last year. In November, the index was up 3.1 percent compared to November 2013, the biggest year-over-year gain since the start of the Great Recession in 2008.
  • The outlook for growth among the different types of franchises will differ, with quick service restaurants ranking first and retail businesses ranking second in terms of increased employment.

Find the full IHS Economics report here and see the updated infographic here.

 

 

 

It’s About Community, It’s About Being a “FAN”

Thanksgiving is just around the corner and it provides an opportunity to share precious time with our families in our communities.  As businesses reach out to their respective communities during this holiday season, they are also involved in activities and movements that benefit their neighbors all year.

And how do franchise businesses benefit their neighborhoods? Franchise small-business owners hire and promote people from within the community, contribute to local economic and social stability, as well as serve as entrepreneurial role models.  One close friend who was a franchisee for a decade was passionate about helping young people remain in school and helping them to understand the significance of a strong work ethic, being responsible and respectful.

There is a movement taking hold in the franchise community that helps to promote small businesses in their local communities.  It’s called the Franchise Action Network or FAN.  The audience:  lawmakers in every state capitol and the message: how important the franchise industry is to their state and communities.

Now comes the most important part of this movement: It’s you!!! As a franchise small-business owner, you make the best possible representative because you are local and can tell exactly how legislative or regulatory actions can help or hinder the growth of your business. Check out FAN Maine in action below.

You can help explain that franchising involves more that quick-service restaurants, and includes everything from soup, Soupman Inc., to nuts, Cornwell Quality Tools Company, and everything in between:  from Jiffy Lube to The UPS Store, from Abrakadoodle Remarkable Art Education to the Gap, Inc. and from Gold’s Gym to Camp Bow Wow to list just a very few.

Locally owned franchises are America’s hidden small treasures. IFA asks your support to get involved; visit www.FranchiseActionNetwork.com today to sign up and get involved. After all, Thanksgiving is only one day per year.  Your franchise small business is making a difference every day; let your legislators know how!

 

 

 

 

IFA Addresses Threats to the Franchise Model at MUFSO

On Oct. 7, the 55th annual Multi-Unit Foodservice Operators Conference, better known as MUFSO, concluded in Dallas. MUFSO is the most comprehensive executive conference in the restaurant industry and IFA sponsored a session titled, “Franchising Under Attack: Get Informed & Learn How to Take Action!”

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The session provided an overview from industry leaders and legal perspectives on all the franchise legislative and policy issues facing the industry. It also explained how to get involved through the recently launched IFA Franchise Action Network (FAN).

Panelists included Patrick Doyle, president & CEO, Domino’s Pizza Inc.; Aziz Hashim, president/CEO, NRD Holdings, CEO/chairman, Impact Investments; Michael Lotito, co-chair and shareholder, Littler’s Workplace Policy Institute; Steve  Romaniello,  CFE, managing director, Roark Capital; and Matt Haller, senior vice president, media relations & public affairs, IFA, who served as moderator.

The session got underway with Hashim, Doyle and Romaniello echoing points on the state of the industry under attack. Hashim noted he has “never seen this kind of wave,” regarding the industry threats with Romaniello adding, “Make no mistake, the industry is under attack and it is broader and deeper than most people think.” Doyle was hopeful “that rational people will make rational decisions, but a lot is at risk right now for the industry that could impact millions of business owners and jobs.”

Haller guided the conversation next to last week’s veto by Governor Jerry Brown of harmful franchise relationship legislation in California. The veto of SB 610 represented a true victory for franchise small business owners and employees throughout the state, the culmination of a two-year strategic campaign by IFA and California FANs.  “The reason people choose to be franchisees are brand promise and operations, franchising success rate is higher.  Legislation like this would weaken brand consistency which would lead to more failures,” Doyle commented.

Hashim added that SB 610 would have been, “government interfering in business contracts and have unintended consequences,” noting that, “special interest is at play trying to cause a rift between franchisees and franchisors.” Romaniello spoke to the energy surrounding the IFA opposition campaign:  “we have made a greater effort to engage franchisees, there are more common interests than ever before, and also a common enemy,” and continuing that “the Franchise Action Network is a tool to engage on a more granular and local level, as state and local issues are now a focus to be pro-active on, and California is a great example.” Lotito gave the opposition perspective on what SEIU is spending on this fight, how well its messaging is organized and the real challenge in this debate.

The next issue of discussion was the National Labor Relations Board recent ruling on joint employer. Lotito walked the group through the full impact of the proposed joint employer standard and what it means for the industry. Hashim noted that the ruling “profoundly changes the franchise model. Worst case, everything becomes corporate-only stores, which threatens the basic foundation of franchising. Franchisees are independent entities that hire, fire, promote and set wages.”

The panel closed with a call to action from all the panelists that there is no choice but working together to protect the industry and engaging lawmakers with the franchise business community.

For more information about the Franchise Action Network or to sign up, please visit www.FranchiseActionNetwork.com.

For any questions or inquiries, please contact Erica Farage at 202-662-0760 or efarage@franchise.org.