Urgent Request To Protect the Franchise Business Model

Editor’s Note: We present the following appeal from IFA Chair Catherine Monson.

I write to you today with an urgent request on behalf of the franchise community.

While I had hoped the stress of the recent election would be behind us by now, the reality is there is still more work to be done.

No matter who you voted for in the presidential race, the stakes for franchising could not be higher. This is not a red issue or a blue issue, but a franchise issue. If Democrats control the entire agenda in Washington, they will enact The Protecting the Right to Organize (PRO) Act, which would legislate the franchise business model out of existence. This article explains the downsides of The PRO Act.

How? Rather than changing the joint employer rule through administrative actions (as the Obama administration did), Congress will be able to pass legislation codifying this into law, which the Biden administration has pledged to support. The DNC platform specifically called out franchisors as a target. The platform states that they will cause “workers to bargain with the employers that ‘hold the power,’ including franchisors.” For more information, you can read the DNC Platform here; see the second paragraph on page 15 of the PDF. You can read more information regarding the Biden-Harris labor agenda at this link.

If The PRO Act passes, this means the franchisor will become the employer of the franchisee and the franchisee’s employees. There will be no legal ambiguity about this outcome. Overnight, all franchisees would become middle managers.

Many have expressed concern that this change would reduce the value and the equity that franchisees have built up in their business, reducing the sale price upon exit, and maybe leaving the business unsellable.

This is also about a balance of power. A divided government requires compromise and negotiation. That compromise and negotiation will help protect the franchise business model.

Therefore, I am asking you to join me to support the IFA and others in ensuring Senator David Perdue and Senator Kelly Loeffler are reelected on Jan. 5. Both senators have received maximum contributions from IFA’s FranPAC.

Below is how you can help. No matter your personal politics, our way of doing business will be collateral damage if these senators lose reelection. Keeping divided government is the firewall between the eradication of the franchise business model and the future of our brands, our franchisees, and the way our supplier partners make a living.

1. Donate. Thank you to those of you who have already contributed to these campaigns! If you would like to donate any amount, please use this unique IFA link so that the National Republican Senatorial Committee (NRSC) can track all IFA-affiliated contributions. 

Please note that the bottom of the web form explains the legal giving limits and how your contribution is designated if you choose to give beyond the initial maximum individual $5,600, which is split evenly between both campaigns.

2. Events. For those in the state, or who would like to travel to attend, the IFA is working on an in-person event for the senators in Atlanta on a date to be announced. While the details are still being finalized, we are hopeful that anyone who contributes online now will be able to join the event virtually. Please be on the lookout for that invitation in the coming weeks.

Additionally, if you are located in Georgia and willing to host either of the senators at your business or home, either in-person or virtually for a franchise roundtable/campaign stop, please email IFA’s Erica Farage.

3. Communications. In addition to resources, the IFA will still try to make the voice of franchising heard in the state through the media to highlight the stakes of these races for franchise business owners. If you are located in Georgia or have great franchisees who would be willing to speak to the media about these races, please email the IFA’s Stephen Worley.
4. Encourage others to donate. Please encourage others to also donate. I sent this email to my U.S. franchisees, my U.S. employees, my franchising friends, my personal friends, family, and posted a synopsis and the contribution link on my social media pages.

Thank you for your time, your resources, and your attention. With franchising on the ballot in Georgia, the stakes could not be higher.

Warm regards,

Catherine Monson

Chair of the International Franchise Association