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When Franchisors and Franchisees Should Come Together

by Ed Teixeira

There are a number of important issues that can impact the entire franchise industry. Franchise industry groups should collaborate to deal with these issues.

 A large amount of the news regarding changes that can impact the franchise industry is usually focused on various legislative efforts at the state level. For example, recent efforts in Maine to pass a franchise bill. When this takes place, franchise industry groups representing franchisors and franchisees are on the opposite side of the table. However, there are issues that can impact the franchise industry where the interests of  franchisors and franchisees are aligned. These issues range from efforts to unionize franchise employees, to tiered wage schedules for larger employers.

In such cases, it would make a great deal of sense for representatives of the franchise industry to combine forces to resist these efforts. A coalition of franchise organizations for example, the IFA and the Coalition of Franchise Associations, could appoint representatives from each group to address issues of common concern to both franchisors and franchisees. This select team could analyze existing threats to the industry and provide reports that could cite the impact upon both sectors. The result could be a more powerful lobbying group that can represent all segments of the franchise industry.

Recently, both groups successfully lobbied on an individual basis to help defeat efforts in Connecticut to pass House Bill 5069, a bill that would have required companies with over 500 employees to pay 130 percent of the state minimum wage. This bill would have put large franchise chains at a competitive disadvantage to small non-franchised competitors. This bill was heavily promoted by the S.E.I.U. which continues to assault the franchise industry. The S.E.I.U. and their cohorts do not distinguish franchisors from franchisees but rather see them as one.

I don’t profess to have all the answers for how this kind of effort could be initiated or structured but I do know it would make a great deal of sense. Of course, a key question would be; how to accomplish this, at the same time while some pending state franchise legislation is being favored by one group and opposed by the other? My response: The same way as legislation is enacted each day throughout the United States at every level of government as a result of different political parties working together for the benefit of their constituencies.

Some of the issues that could be of immediate concern to joint efforts by a franchisor-franchisee coalition include:

  • Implementation and industry costs from the Affordable Care Act, especially a health insurance tax
  • Efforts by the NLRB to make it easier to unionize employees
  • Continuing efforts to establish a $15 Federal minimum wage
  • Legal reform to reduce frivolous lawsuits
  • Finalization of immigration reform
  • Increased lending for small businesses and franchisees (not SBA)

Representatives of franchisors and franchisees should find a way to join efforts against attempts by others to implement changes that could negatively impact the franchise industry.



2015 FranchiseKnowHow, LLC

Ed Teixeira is the President of FranchiseKnowHow.com and Chief Operating Officer, FranchiseGrade.com. He is a former franchise executive and franchisee. He can be contacted at 631-246-5782 or at  franchiseknowhow@gmail.com



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