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Updates


Another “Manufactured Crisis” Brought to you by SEIU

The Service Employees International Union, also known as the SEIU, is at it again. The labor group is manufacturing yet another crisis as part of its increasingly expensive public relations campaign, now estimated to cost more than $33 million. It seems the union is as determined as ever to destroy the time-tested franchise model in order to fill its own depleted membership.

Despite the SEIU’s best efforts, America’s 780,000 franchises make significant contributions to the U.S. economy, growing faster than the U.S. economy for five consecutive years and employing nearly 8.9 million workers. The union’s new petition to alter the Federal Trade Commission’s Franchise Rule amounts to nothing more than asking the FTC to solve a problem that doesn’t exist.

For nearly forty years, the Franchise Rule has protected prospective franchisees against potential abuses in the pre-contract process. Extensive pre-sale disclosure was mandated by the FTC in the 1970s and reexamined in 2007. The rule ensures franchisees have ample time to review a franchisor’s financial statements and leadership, as well as over twenty other areas of disclosure information before entering into a contractual agreement to purchase a franchise. This has served both franchisors and franchisees well and allowed the franchising industry to grow and prosper.

Today’s franchisees are successful, satisfied and enthusiastic about franchising. According to recent independent survey of franchisees by Franchise Business Review, nearly 80 percent would recommend their franchise brand to others and nearly 75 percent would “do it all over again” knowing what they know today about the business model. And more than 80 percent of franchisees said they would rate their franchisor highly, enjoy being part of their franchise network and believe their franchisor acts with honesty and integrity. That wouldn’t be the case if franchisees were dissatisfied or there were systemic abuses as the SEIU would like regulators to believe.

Popeye’s franchisee Aziz Hashim encapsulated franchisee satisfaction when he explained why franchising presents such a unique opportunity for small business owners. “You can work at a widget factory for 40 years, but you’re probably not going to own the widget factory. You spend 40 years in franchising chances are you have the opportunity to own a business.”

Aziz is right. Across the board, franchisees are highly satisfied and have a high level of trust in their franchisors. They know they have remedies in place should a dispute arise. These include their mutually-agreed upon contract, the courts and through many state laws if and when they are needed.

The SEIU can claim to be looking out for franchisees, but it is really motivated by its own bottom line.

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