FOR IMMEDIATE RELEASE

Contact:

Jenna Weisbord, 202-662-0766

Emily McCarney, 202-661-6315  

jweisbord@franchise.org

emccarney@bgrpr.com

IFA COMMENDS CHICAGO TASK FORCE FOR EVEN HANDED RECOMMENDATION ON MINIMUM WAGE INCREASE

WASHINGTON, July 9, 2014 — International Franchise Association President & CEO Steve Caldeira lauded a decision yesterday by a Chicago task force that recommended to Mayor Rahm Emanuel that any increase in the city’s minimum wage should be applied uniformly to all types of businesses without regard to their structure. 

Caldeira said the decision by the Minimum Wage Working Group was a defeat for the Service Employees International Union (SEIU), which heavily lobbied city officials to discriminate against franchisees by increasing their wage floor faster than other types of businesses. 

“We are pleased and truly grateful the task force recommended to Mayor Emanuel that any wage ordinance should provide equal treatment to all businesses and not pick winners and losers among business models,” Caldeira said. “We asked the task force to treat all small businesses in Chicago, including the 1,200 franchisees that employ 44,000 employees, as the small businesses that they are and not discriminate in the form of an accelerated adoption of a wage increase simply because they operate under the name of a well-known brand.” 

The International Franchise Association (IFA) is fighting a multi-city effort by the SEIU  to use minimum wage ordinances like the one pending in Chicago to declare that  independently-owned franchisees are units of the companies from which they license their brand names. Caldeira has pointed out that for more than three decades, the National Labor Relations Board, Small Business Administration and Federal Trade Commission, among other federal and state regulatory bodies, have recognized what franchisee contracts say in black and white: franchisees are independent, small-business owners who have complete authority over their employees, not the large corporations that they pay an initial franchisee fee and ongoing royalty payments to use the trademark. On the other hand, if an entire chain is declared by government to be a single entity, the SEIU could unionize it far more easily than if its franchisees remained the separate, independently-owned small businesses that they are. 

IFA and five franchisees last month filed a federal lawsuit against Seattle for enacting a minimum wage increase that would raise the wage floor faster for franchisees than for other small business owners. There are similar ordinances backed by the SEIU pending in as many as 26 states or cities (including New York City and Philadelphia) that could put franchises at a competitive disadvantage with similarly sized, non-franchised businesses.   

“The franchise industry has outpaced growth of the overall U.S. economy for the last five years and that’s because we create much-needed entry-level jobs, career advancement opportunities and small business ownership opportunities that fuel the American Dream,” Caldeira said. “Moving forward, we will work with the Mayor and the City Council as the legislative process continues to ensure equitable treatment for franchisees under any potential wage increase and to mitigate its impact for employers, employees and consumers.” 

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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. 

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