How long before union muscle tries to destroy the franchise industry?

The Washington Post has an article outlining how the union movement in the US is marshalling its forces to attack franchise operators.

Those slimy SFWU scumbags will want the same for New Zealand.

The franchising industry in NZ worth about $20b. Unions wanting to unionise entire franchise systems would destroy much of that value.

Learn from the US, what happens there eventually comes here.

Franchising, one of the great American business success stories, is increasingly and unfairly under attack. Lawmakers need to pay attention and ask some questions.

More than 770,000 franchise businesses operate in 100 different business categories in the U.S., including restaurants, hotels, business services, retail stores, real estate agencies and automotive centers. These businesses employ 8.5 million workers and contribute more than $494 billion to the U.S. Gross Domestic Product, or 3.1 percent of total private sector GDP.

Unfortunately, franchising is the target of a well-financed, national campaign by the Service Employees International Union. The SEIU has launched a multi-pronged assault at the local, state and national levels of government.

The SEIU wants to undermine franchise contracts so it can more easily unionize entire franchise systems. The union and its affiliates want government officials to designate entire franchise systems as a single unit rather than the collection of separate, small business owners they actually are.

The reason is simple: It is much more difficult for unions to organize employees of thousands of independent small businesses than to unionize a single, large entity.

The effort is a desperate, special-interest ploy to replenish the union’s dwindling coffers and declining private-sector membership. The policy advanced by SEIU is meritless and stands in sharp contrast to years of federal and state legal and regulatory precedent.   

Nonetheless, unions have lately been able to secure a few temporary victories. They persuaded the General Counsel of the National Labor Relations Board in July that McDonald’s Corp. can be declared a joint employer with its franchisees in relation to possible labor violations cases.

Unions also won a victory earlier this year in Seattle where a city ordinance now demands that franchisees increase the minimum wage they pay their employees at the same pace as big national corporations. Other types of small businesses get more time to raise their wage floors.

Both of these actions were instigated by SEIU to undermine the franchise business model under the guise of helping workers increase pay and working conditions. But the union’s argument to do so is flawed and should be rejected.

A franchise is an agreement or license between two independent businesses. One of those businesses is the holder of the brand name and the other is the small business that pays an initial fee and ongoing royalties to use the trademark of the franchisor. Consumers win by receiving the same quality service from business to business no matter what city or state they are in.

Many businesses with familiar names such as Dunkin Donuts, Subway and Sir Speedy are actually owned and operated by local, small-businesses families. This is the hard fact that the unions want to overturn.

We have already seen unions like the SFWU attack cleaning franchisees, and also the Labour government lock in protected rorts regarding cleaning via the Building Service Contractors. The SFWU works closely with Labour to push against these small Kiwi businesses.

Franchisors are responsible for brand standards and quality. Franchisees are responsible for day-to-day operations and employment decisions that include hiring, firing, wages and benefits, and working conditions. Decades of established law makes clear that franchisees are separate businesses from their franchisors. Their legally binding contracts also make this clear no matter what the unions say.

Unions also want policymakers to ignore another fact: Franchisees have been an important driver of the economic recovery since the Great Recession. Franchisees have grown faster than non-franchise businesses during the period and have created thousands of jobs when employment was otherwise scarce.

Hundreds of franchisees and franchisors are coming to Washington September 16 and 17 to explain the situation to their elected representatives. They plan to fight SEIU’s erroneous and dangerous assertions because they will harm job growth, the overall economy and locally-owned franchise small businesses in every state.

Franchisees have invested their capital in their businesses and stand to lose equity if their franchisors are deemed joint employers. In addition, disputes over liability will only produce costly litigation for both the franchisee and franchisor.

Thankfully voters rejected union dominated parties, but we must remain vigilant in order to prevent unions gaining a foothold against these businesses.

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