International Franchise Association Hosts AB 5 Roundtable in Long Beach

Local business owners discuss challenges in applying AB 5 to franchise industry

Long Beach, California – The International Franchise Association (IFA) hosted a roundtable discussion yesterday in Long Beach with local business owners to discuss how Assembly Bill 5 (AB 5) – the worker misclassification law passed by the California State Legislature and signed into law by Governor Gavin Newsom – will impact them and why it should be updated to provide more legal certainty for franchising. They addressed how AB 5, if applied as currently written, would directly affect their livelihoods as local business owners and how it would undermine the businesses they’ve worked so hard to ensure succeed in their communities. 

The local business owners in attendance included Stan Gray and Gaby Mullinax with FAST SIGNS and Mark Lyon with inExpress, among others. 

“We are in charge of hiring, firing, designing the things we produce,” said Mullinax. “We make every decision a business owner would make; it is not affected by being part of a franchise. The franchisor is a consultant. I make my own decisions based on my business experience.”

Implementation of AB 5 without consideration of the franchise model threatens these businesses and the jobs they create in California.  As currently written, AB 5 could pose an existential threat to franchising. 

Photo credit: International Franchise Association

“We’re all small business owners. That’s the heart of the United States – the ability to own a business,” said Lyon. “If it wasn’t for franchising, I would be working for someone else. I have 50 people in my franchises. I made the investments and took the risks to start those businesses, and I wouldn’t be able to have what I have without franchising.”

In a state such as California where the franchise industry provides 729,000 jobs at 75,800 establishments, AB 5 would be extremely damaging to franchise businesses across the Golden State if strictly applied as currently written. That is why IFA, along with local business owners, will continue to fight to protect the franchise community. 

About the International Franchise Association

Celebrating 59 years of excellence, education and advocacy, the International Franchise Association is the world’s oldest and largest organization representing franchising worldwide. IFA works through its government relations and public policy, media relations and educational programs to protect, enhance and promote franchising and the more than 733,000 franchise establishments that support nearly 7.6 million direct jobs, $674.3 billion of economic output for the U.S. economy and 2.5 percent of the Gross Domestic Product (GDP). IFA members include franchise companies in over 300 different business format categories, individual franchisees and companies that support the industry in marketing, law, technology and business development.

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