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Service union joining franchisees, activists in minimum wage fight

The Service Employees International Union is joining franchisees and activists together in the fight to raise minimum wage.

May 5, 2015

The Service Employees International Union is joining franchisees and activists together in the fight to raise minimum wage, according to Entrepreneurnews.

The SEIU has launched "We Are Main Street," in an effort to show how the franchise system negatively affects franchisees. As part of the project, the SEIU is supporting efforts to strengthen franchisee rights as a strategy for attacking franchisors, the article said.

"The small business owners behind the corporate brands lack basic business protections," the website says. "Franchisors have been accused of taking away franchisees’ businesses unfairly, blocking franchisees from selling or passing on their franchises at a fair price or retaliating when franchisees speak out and join together."

The International Franchise Association disagrees with the SEIU's position that franchisees are treated unfairly and that increased government regulation of the industry would resolve the issue.

"The SEIU is so desperate to lend credibility in its fledging effort to convince government officials to help it unionize franchise workers that it has ginned up a report that grossly misrepresents attitudes toward franchising," Steve Caldeira, president of the International Franchise Association (IFA), said in a statement. "In truth, multiple surveys have showed that growth among franchise businesses outpaces the overall growth of the U.S. economy."

According to a FRANdata study from 2014, franchisees renew contracts at a rate of 94.2 percent a year, IFA said. The organization also pointed to a Franchise Business Review survey showing that 80 percent of franchisees rated their franchisor as good, very good or excellent. However, the SEIU reported that a poll of 1,100 franchisees revealed 68 percent of franchisees are operating at a loss of making no profit from their business.

While both organizations claim to protect franchisee rights, the two are opposed on issues such as treating franchisors as joint employers and increasing minimum wage, Entrepreneur said.