DIGITAL

STATE ADVOCACY – ADVANCING FRANCHISING
Local Level Assaults on
Franchise Model Continue
More minimum wage battles are on the horizon. IFA is already
BY JEFF HANSCOM
A
mere three months ago, I wrote a column in this
space titled “An Increasingly LOCAL Fight for
$15” and it seems only appropriate to revisit
those words again. A bit of background may help frame
the renewed discussion: At its core, the “Fight for $15”
movement and the resulting ordinances can be broken
down into three distinct camps.
• First, there are cities raising the wage for all hourly
employees at the same time and at the same
rate, i.e. every business has until 2020 to increase
minimum wage rates to $15 per hour.
• Next, there are cities raising the wage to $15,
but on different timetables based on the size of
the business, i.e. businesses with less than 250
employees have five years to get to $15, while
businesses with 250-plus workers may have three
years to get to $15.
• Third, and most concerning to the franchise model,
there is what I will refer to as the “Seattle model,”
which attempts to raise the hourly rate to $15 on
different timetables for different businesses by
dividing businesses into big versus small, but
including local franchise establishments in the
definition of “big” based solely on their affiliation
with a national brand.
In essence, this creates an unleveled playing field by
forcing a franchise sandwich store with 10 employees to
pay $15 an hour to its employees on a different schedule
than the sandwich shop next door, selling the same
products, but which is not affiliated with a national brand,
thus giving the non-franchise sandwich shop an unfair
competitive advantage.
OTHER LOCALITIES FOLLOW SUIT
Since writing on this topic in August, there have been
developments in a number of localities including Portland,
Maine; Kansas City and St. Louis, Mo.; and Seattle.
• In Portland, the ballot measure calling for an increase
in the minimum wage to $15 with language that mirrors
the Seattle ordinance (discriminates against franchises
based on “big” business definition) is moving forward
and depending on the date you read this article, has
been put to the voters.
• In Seattle, the International Franchise Association’s
litigation against the city continues with oral arguments
having been heard by the Ninth Circuit Court of Appeals
on Sept. 1, 2015. As of this writing, an opinion has not
yet been released.
• In St. Louis and Kansas City, where both cities approved
minimum wage increases late in the summer, after many
meetings and discussions with Kansas City officials, IFA
was able to have the discriminatory language removed.
However, the same was unfortunately not true in St. Louis,
where a lawsuit has been filed challenging the ordinance on a
number of legal points. IFA is financially supporting the suit, but
is not a named party.
NEW YORK: LITIGATION PROBABLE
Not to be left out, the state of New York and Gov. Andrew
Cuomo (D-N.Y.) circumvented the legislature in Albany and
convened a “Wage Board” to examine wages within the quickservice
restaurant industry.
12 FRANCHISING WORLD NOVEMBER 2015