International Franchise Association launches ad campaign battling portion of Seattle's new wage law

Aug. 21, 2014

The International Franchise Association has launched a radio ad campaign battling back against a portion of Seattle's new wage law, alleging proponents of the law have an agenda to undermine the franchise model.

Seattle’s new minimum wage law treats franchisees not as small, locally owned businesses but as large, out-of-state businesses. Under the law, franchisees with fewer than 500 employees, including those with even just one employee, must adopt the higher $15 minimum wage on the same expedited three-year timetable as big businesses, such as The Boeing Company, with more than 500 employees, beginning in April 2015.  The new law calls for non-franchised businesses with fewer than 500 employees to phase in the $15 minimum wage over seven years.

The provision was added at the behest of the Service Employees International Union (SEIU), according to statements and emails filed in court as part of a lawsuit by the IFA.

“It’s high time the public knows about the SEIU’s real motives behind its campaign to increase the minimum wage in Seattle and around the country,” said President & CEO Steve Caldeira, CFE, in an IFA press release.  “The SEIU’s concern is not for the employees working at franchise businesses, but the union’s real mission is to force these hard-working employees to join the SEIU’s dwindling membership ranks in order to get dues deducted from their paychecks.”

The radio campaign, which begins on KOMO Newsradio and KIRO Radio 97.3 FM, discloses that David Rolf, the president of SEIU in Washington, admitted that part of SEIU’s motivation for the higher minimum wage in Seattle was to break the business model for franchisees and in turn, expand the union’s membership to franchise employees.

As the new radio ad says, “The last thing a low-wage worker needs – even ones making $15 an hour – is a monthly bill for union dues.”

The IFA also filed a lawsuit in June to challenge the provisions of the city’s new minimum wage law.  Earlier this month, IFA requested a preliminary injunction to stop the part of the new law that classifies small franchise businesses as large businesses.  The preliminary injunction would enable small franchise business owners to pay the same minimum wage as other small businesses while the litigation is ongoing.

If the minimum wage law were allowed to take effect as written, small franchise businesses would be forced to pay a much higher wage than their fellow small businesses that aren’t part of a franchise, putting those franchisees at a significant competitive disadvantage, according to the IFA. 

Topics: Franchising & Growth, Staffing & Training

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