Franchisees in Seattle have been saddled with a new $15 dollar per hour minimum wage ordinance passed by the city’s mayor, Ed Murray. The new measure was just passed on June 2 by a unanimous vote of support from the city council. The ordinance, which begins on April 1, 2015, will be implemented over several years based on the size of the employer and the benefits offered.
The IFA and franchise groups are uniting against the ordinance. The IFA’s president and CEO Steve Caldeira said in a statement, “The Seattle City Council and Mayor Murray’s plan would force the 600 franchisees in Seattle, which own 1,700 franchise locations employing 19,000 workers, to adopt the full $15 minimum wage in 3 years, while most other small business owners would have seven years to adopt the $15 wage. These hundreds of franchise small business owners are being punished simply because they chose to operate as franchisees.”
He went on to refer to decades of legal precedent that have held that franchise businesses are independently-owned businesses and are not operated by the brand’s corporate headquarters. The inaccurate definition of franchises could put many franchisees out of business and do harm to a franchise business model that has been responsible for creating small business opportunities for millions of Americans.
Caldeira says the IFA has no choice but to file a legal challenge against the city of Seattle for this action. The suit will seek to overturn the unfair and discriminatory minimum wage plan approved by the city council.
The IFA says it will fight to preserve the tenets of the franchise model, which has helped hundreds of thousands of people enjoy business ownership and created economic opportunity for many.
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