The Wall Street Journal: Real Costs of NLRB’s Franchise Power Grab

By Tamra Kennedy

Regarding your “The Real Cure for Economic Insecurity” (Review & Outlook,” Jan. 17): It comes as no surprise to small-business franchise owners like me that ivory-tower occupants are now walking back their findings on the “fissured workplace” theory. The only surprise is that it has taken this long to debunk a position taken against small businesses by academia’s elite.

In 2017 I testified before a subcommittee of the House Committee on Education and the Workforce that “my [franchise] business has become collateral damage in the confusing quagmire of unlimited joint employment liability” after the National Labor Relations Board’s (NLRB) 2015 Browning-Ferris decision. A regulation aimed primarily at reducing a nonexistent rise in alternative work arrangements was nothing more than an unnecessary brake on the American economy and a needless hardship for thousands of franchisees.

The rule cost the average franchisee $142,000 in annual revenue and a $21,000 hit to their profits. Cumulatively, it cost businesses between $17 billion and $33.3 billion. This is the real cost of trying to fix something that was never broken to begin with. It meant less compliance and training, reductions in shifts, hard conversations and even harder decisions for small-business franchise owners like me. All for, as you put it in your editorial, “a myth.”

As it turns out, business owners know how to run their businesses better than academics. We can only hope the NLRB agrees and soon returns to a thoughtful, clear and consistent joint-employer standard.

Tamra Kennedy
Franchise Owner, Taco John’s
Roseville, Minn.

Privacy Policy