Franchisees and small business owners across the U.S. are expressing outrage and concern about the National Labor Relation’s Board’s effort to alter the long-standing “joint employer” standard. Under current law, franchisees are solely responsible for wages and benefits of their employees. A change in the standard would take away that control and potentially reduce pay and benefits for thousands of workers. Some may even lose their jobs. Other franchisees said they would have to put off plans to expand and hire more workers. The message is clear from main street – the NLRB should not alter the “joint employer” standard. If it does, there will be significant economic consequences.
“We make the decisions concerning wages, benefits, leave policies, etc, that we think are in the best interest of our business (Logansmith Inc, DBA ServiceMaster Chesapeake) in the context of our market place and our personal values. It is always interesting to talk to our SErvicemaster colleagues both in Maryland and around the country and find out how they do things differently. Sometimes we adopt someone else’s great idea, sometimes they adopt on of ours. While we all sell the same product, each of us has created a unique business. That is the strength of the franchise—we get to use this great idea and expertise, but we get to have our own business. I highly resent any politician trying to take it away from me.”
Christiana Logansmith
ServiceMaster Chesapeake
“Why do I say there would be less demand for franchises? Because the people I've put in business told me so. In very general terms, they want to own their own business and control their own destiny. Like me, they have had enough of being controlled from above in a corporate environment. None are sure they would have bought into a franchise if the revised rule was in place. No more jobs would have been created, they wouldn't be investing in capital and buying supplies from local vendors.
“Small business and its growth is the backbone of the American Dream. Congress and the NLRB should be doing everything to promote the launch and growth of small business, not stifle them with excessive regulation that makes no sense and reverses centuries of precedents.”
John Adams
FranNet of the Finger Lakes
“As a military retiree, with 36 years of service for our country in the U.S. Air Force, I was determined to stay active and provide a living to myself and family that would match or exceed the income that I achieved while serving my country. The franchise model seemed to provide this opportunity. As a member of this country’s military force, I am well aware of the difference between direct and in-direct management of a labor force.
“Changing the law to allow franchisor authority in decision making regarding employment or any other actions would surely contribute to the demise of my business. In addition, the costs associated with having to provide certain benefits, due to the increase in the employment workforce that this initiative seems to be driving towards, will most certainly impact the bottom line and may be just enough to tip the scale over to bankruptcy instead of a profitable business model that I can pass on to my prodigy. Just the costs associated with trying to determine how this model change will affect my business may be the straw.”
Doug
FASTSIGNS® of Parker/Castle Rock
“I have a successful restaurant concept with 4 locations. I was on the cusp of launching a major expansion through franchising. But this issue of joint employer status is giving me pause. I have decided to put my expansion plans on hold for the next year to see how this pans out. If it passes, I will not franchise. Instead, I will go to the money men on Wall Street to seek out a capital infusion and expand solely through company owned locations. This will be a slower process, but will make more sense. Because if I am going to be liable for all location employees regardless, I may as well own all the locations outright.”
Mark Kulkis
CEO, Chop Stop Inc.
“I am so tired of Government overreach in many areas of our lives this being one, most of the Government bureaucrats have never owned and operated a business or in many cases ever held a private job. I have mortgaged my home and invested a life’s savings and countless hours into my business a Franchise that I have grown to the point where I (my business) employ 10 associates. As a business owner I manage all aspects including customer service, buying supply’s, setting prices, hiring, training and coaching the right employees etc. I want the freedom to continue to succeed or fail based on my sole decisions not some bureaucrat.”
Robert Craigo
FASTSIGNS Owner of Fresno & Clovis, CA
“Very few of our employees even realize they’re working for a franchise, they work for “Jeff and Susan.” If BrightStar was to be categorized with “Joint Employer” status, the quality of jobs for our staff would deteriorate. If they were offered medical insurance at all, it would likely be offered sub-standard health care as part of a national plan, rather than the reasonable premiums we’ve negotiated with a local HMO. They’d no longer have Paid Time Off. They’d probably not have a 401K with employer match. They wouldn’t have a connection with local owners that know them and their families and their dreams, see them out at community events, and help them with career goals.”
SUSAN RATHER, OWNER
BrightStar Care® of Madison, Janesville, Baraboo, and LaCrosse
“If it turns out that franchisors are viewed as joint employers across the board, we would have to commence an across the board review of our potential liabilities, and make a detailed assessment of the investment required to manage those liabilities. This would involve sweeping changes in nature of our organization.
“Without a doubt, the impact on growth would be terrible. Existing franchisees would likely cease development, and potential franchisees would almost certainly retreat. A situation would likely arise where franchisees would wish to exit the business all together (and we might have an appetite for acquiring their business outright). But this is a diversion of capital resources that is catastrophic in terms of the impact on growth.”
Don Fox, Chief Executive Officer
Firehouse of America, LLC
“If this happens, then control over the service my clients receive and the employment decisions we make to benefit our employees will be taken away from us. We have worked hard to build these relationships and feel that we know best what both clients and employees want from us. We don’t want to lose those relationships due to the fact that we have to follow “corporate policy”, which is what I am sure Home Instead would be forced into. I believe this is a bad decision and ultimately those clients and employees will experience the worst of the consequences.”
Lori Sensenbach
Franchise Owner
Home Instead Senior Care
“Our company’s compensation and benefits program sets the standard in our industry and is only one of thousands of companies within the Great Clips community across America and Canada that does so. The thought process guiding the NLRB is born out of the depression era when labor standards and economic pressures were challenging our government to respond. America overcame that era because business realized the need for change and, so, overwhelmingly answered that need.”
Richard Dayton
President
CaliClips, Inc.
