WASHINGTON, July 29-International
Franchise Association President & CEO Steve Caldeira, CFE, released the
below statement today expressing disappointment in the decision by the NLRB
Division of Advice recommending franchisors and franchisees can be designated
Division of Advice recommendation that
franchisors and their franchisees be designated as
joint-employers is both wrong and
unjustified. This legal opinion would upend years of federal
and state legal precedent and threaten the sanctity of hundreds of
thousands of contracts between franchisees and franchisors, a bedrock principle
of the rule of law.
jobs and the livelihoods of hundreds of thousands of independent
franchise small businesses are now at risk due to the radical and unprecedented
nature of this decision. Ruling that franchises are joint-employers will be a
devastating blow to franchise businesses and the franchise model. Franchise job
growth and new business formation have outpaced non-franchise growth for the last
five years but will undoubtedly come to a screeching halt if this decision is
affirmed by the NLRB’s New York Regional Office.
"Franchisees and their
employees do not work for franchisors. The franchise
owners who have built more than 770,000 businesses and employ
millions of people control their own businesses. Franchisees have
their own employer identification number with the Internal Revenue Service and
file their own taxes. Franchisees establish day-to-day operations,
employment practices and policies for
their own businesses. Franchisees decide who to hire and fire,
and also set wage rates, benefits and employees’ work schedules.
are joint employers with their franchisees, these thousands of small
business owners would lose control of the operations and
equity they worked so hard to build. The jobs of millions
of workers would be placed in jeopardy and the value of the
businesses that employ them would be deflated.
"By proposing this
seismic change, a supposedly independent federal agency is yielding
to intense outside pressure from labor unions led by the Service
Employees International Union (SEIU), which is seeking to
unionize franchise chains and undermine the proven, time-tested
franchise business model.
is a drastic and overreaching solution. Ample federal, state and
local remedies are available –
and are regularly used to enforce current law,
including more limited NLRB action, state attorneys, general action
and private rights of action – to deal with labor violations of
various kinds. Destroying the fundamental tenets of the franchise
model would eviscerate the most successful business model in existence.
"As our economy
continues to steadily, but
slowly recover, and employers increasingly look for ways to hire more workers, the NLRB would be wise to ignore
this flawed opinion."
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