The CFA VOICE is the monthly newsletter for Coalition of Franchisee Associations member franchisees. Representing OVER 46,000 franchisees owning over 122,000 franchises and employing over 2.7 million people, CFA is the Voice of the Franchisee.
Read the May 2022 Issue of The CFA VOICE by clicking here.
CFA submitted its comment on NASAA’s Proposed Statement of Policy on use of questionnaires and acknowledgements in franchise disclosure documents. CFA believes these tools should not be used to shield franchisors from liability when making financial representations to prospective franchisees. Click here to read CFA’s comment.
CFA Executive Director Misty Chally and Board Member and UPS franchisee Tad Mollnhauer were recently quoted in this New York Times story about franchisee competition with Amazon.
Click here to read the story.
CFA Executive Director Misty Chally was interviewed on One America News Network’s show, Wall to Wall with Greta, about how franchise owners are being impacted by coronavirus and whether they qualify for government assistance.
Click here to watch the interview.
In this opinion piece for The Washington Post, CFA Chairman John Motta responds to a previously published Washington Post article, which he felt implied that franchisees are not small-business owners.
Read Motta’s story here.
CFA Executive Director Misty Chally contributed to Business Insider to discuss misconceptions about franchisees as small-business owners.
CFA Executive Director Misty Chally contributed to WisPolitics.com about how business owners in Wisconsin have been affected by the pandemic.
CFA Chairman John Motta spoke with The Virginian Pilot on the impact of the PPP loans and tax implications.
CFA Executive Director Misty Chally was a guest this morning on Fox Business’ “Varney & Co.” to discuss the economic impact coronavirus relief legislation could have on franchisees and their employees.
Two Florida state Republican legislators, Senator Jack Latvala (District 16) and Representative Jason Brodeur (District 28), unveiled a bill today that is aimed at protecting franchise owners. Called the Protect Florida Small Business Act, state Senate Bill 750 aims to protect Florida franchise owners from capricious closings of their franchised businesses without cause or even warning by the franchisor.
“As a legislator, I want to continue to make sure Florida has the most business-friendly climate in America. As a chamber of commerce president, I’m particularly sensitive to the threats against small business owners from out-of-state companies.” said Representative Brodeur (R-28). “I want to be sure that there is a level playing field for all business owners in Florida, whether they are a small independent shop or a franchisee.”
The International Franchise Association (IFA), a national association that was created by franchisors in 1960 to lobby on their behalf, opposes the bill to protect the assets of franchised businesses. In an email to members, the IFA’s senior vice president of communications and public affairs, Matt Haller, asserts: “Despite the bill’s misleading title, the legislation appears to be a mirror image of some of the legislation IFA has defeated in recent years in California, Maine and Pennsylvania and would do massive and irreparable harm to franchising in Florida.”
That view is not shared by the Coalition of Franchisee Associations (CFA), an organization that represents 41,000 franchisees in some of America’s largest franchise brands.”The basis of this bill is from California’s successful AB-525,” asserts Keith Miller, chairman of the CFA.
“Much of the language used in the Florida bill is taken from California AB-525, which was signed into law in 2015,” points out the CFA’s chairman. “That bill was the result of compromise language between the CFA and IFA, which ensured protections for all parties.”
Franchisee Miller and the CFA should know. The association, which solely represents franchisees’ collective interests, has been deeply involved in the various California and Pennsylvania franchisee protection bills that Haller refers to. But Miller says the Florida bill most closely mirrors the successful California Assembly Bill 525, which the state senate and assembly unanimously passed and California’s Governor Jerry Brown then signed into law in 2015.
The IFA seemed comfortable with that bill, which was drafted and supported by the Coalition of Franchisee Associations. The IFA thought the bill would create a good environment for franchisees and franchisors. “AB 525 represented years of work by the IFA and put to rest a major issue in California, marking a more certain path forward for franchisees and franchisors in the state,” said IFA Director of State Government Relations and Public Policy Jeff Hanscom in the IFA’s February 2016 edition of Franchising World.
The IFA is pushing the thought with its members and legislators that the bill was sparked by a few disgruntled franchisees. “Based upon intelligence IFA’s state government relations director Jeff Hanscom has been gathering in Tallahassee, the bill is the result of a small group of franchisees seeking to generate leverage with brands for concessions in ongoing contract negotiations,” wrote Haller in an email to IFA members today.
In reality, the Coalition of Franchisee Associations has been behind the scenes helping to not only draft the bill, but also work with Florida franchisees and lawmakers to introduce it.
“We’ve been working on this bill for at least half a year,” said Miller, who is also a franchisee. “It’s been in the works for a long time.” The CFA chairman asserts that this is a good bill for franchisees and hopes other Florida franchisees will join in to support its passage by registering on a web site, ProtectFLBusiness.com. He and his organization applaud Senator Latvala and Representative Brodeur for sponsoring the Protect Florida Small Business Act. “Increasing the protections for these local businesspeople creates an environment that gives incentive for future investments,” said Miller.
“More than 400,000 jobs in Florida are directly tied to the hard work and efforts of franchised small business owners,” said Senator Latvala, the bill’s senate sponsor. “Currently these small businessmen and women have no real protection if the national corporation drops them as a franchise holder. This is not a level playing field. This is wrong and it must change.”
This article was originally posted on Blue MauMau.
By Rob Branca
Predictive scheduling mandates require employers to have perfect advanced knowledge and employees to act perfectly. It seeks to legislate an impossible result, every minute, every hour, every day. No business can perfectly predict how many customers will come in the door or what they will order. It is very difficult to predict needed staffing and inventory, which is only one reason that more businesses fail than succeed.
Is there any workplace on Earth that knows in advance how many customers will come in, and what they want? The closest place is perhaps an airport. To understand why these laws are seeking to legislate the impossible, one merely needs to have been stuck in a long, snaking airport security line anxiously wondering if you will make your flight.
Airports are perhaps the only place of business where multi-billion dollar employers (airlines and federal and state government agencies) know the exact number of customers that will arrive, exactly who they are, what luggage they will be bringing to process and when they will arrive. They know this mostly for months in advance. Yet, even with the perfect advance knowledge that a fortune teller would admire, they still are unable to get it right, with TSA being nicknamed “Thousands Standing Around.”
Sure, airports suffer all the same unknowable circumstances that other businesses do: bad weather, who might call in sick, who might not show up without calling, water main breaks, construction delays, equipment failures, and human error, just to name a few. However, one of the largest unknowable factors in business is absolutely, undeniably known to airports: how many customers are coming and how many people are needed to serve them, exactly when, in advance.
If multi-billion dollar companies with extremely sophisticated data systems, analysts and advance reservations from their customers often cannot get it close to right, how do proponents of punitive predictive scheduling mandates like those enacted in Seattle expect a burger joint to be perfect? They don’t. They are seeking fines and large class action legal fees, not employee stability. They are intended to punish employers for not knowing the unknowable. Businesses cannot possibly comply with these poorly drafted laws.
This is not to say that employers ever want to overburden their people with wildly unpredictable hours or work closing and opening shifts within mere hours. Quite to the contrary; a simple, recurring schedule is the easiest and least expensive to manage for a business and provides well rested, happy employees who have had the opportunity for a full night’s sleep, healthy meals, and quality family time. That is the employee that an employer wants to be greeting its valued customers. Punitive predictive scheduling in the forms currently enacted and proposed simply is not possible, even for the closest to perfect fortune tellers among us. There has to be a better way.
Most businesses fail for a multitude of reasons, among them failing to survive the unpredictable. We must not let legislatively mandated punishment for the inability to know the unknowable be another reason. These inept laws are already on the books in a few cities, and are being proposed in numerous other cities and states.
Please contact your local chamber of commerce and any trade organizations to which you belong and share these points.
On July 29, 2014, the National Labor Relations Board (NLRB) issued an Advice Memorandum (“memo”) which would greatly expand liability for franchisees across the country. The memo creates an expanded definition of the joint employer standard and directs administrative law judges to hold franchisors and franchisees jointly liable in a greater number of labor-related cases.
The previous standard on determining joint-employer status — which has been in place for 30 years—recognizes separate business entities as joint employers if they “share or codetermine matters governing the essential terms and conditions of employment…[meaning] matters relating to the employment relationship such as hiring, firing, discipline, supervision and direction.” The NLRB, however, has imposed a new, broader standard that would result in a joint employer finding whenever “industrial realities” make an entity essential for meaningful bargaining.
The Coalition of Franchisee Associations (CFA) opposes the NLRB’s new joint employer definition. Expanding liability eliminates the ability of franchisees to operate independently and act in the best interests of their employees and customers. With the threat of increased liability, franchisors will exert even greater control over franchisees and reduce the franchisees’ role to that of glorified managers. Further, in order to protect the brand and support franchisees with more staff and resources, franchisors are conducting massive brand consolidation and eliminating the single store operator.
CFA is also concerned about the legal implications of this new standard on franchisee liability. Most, if not all, franchise agreements include an indemnification clause that absolves the franchisor of liability against lawsuits arising out of a franchisees’ business operations. Therefore, regardless of increased franchisor liability arising out of the new joint employer standard, franchisees will still be held solely liable for labor-related claims, which will no doubt increase due to an influx of lawsuits by those seeking compensation from the “deeper pockets” of franchisors. The result is an increase in franchisee liability as well as franchisor control – a lose-lose for franchisees.
The clearly stated purpose of the new joint employer doctrine in the franchise space is to unionize an entire franchise system’s employees of its numerous independent franchise owners. It seeks to accomplish this by forcing a franchisor to negotiate a collective bargaining agreement covering its entire system. CFA vehemently opposes any situation where a franchise owner is obligated under a contract negotiated by another party, particularly in systems where franchises are not operated by the franchisor negotiating the agreement. Such a franchisor will have few, if any, of the burdens of the employer who was frozen out of the negotiation and will have none of the costs. As discussed above, CFA’s franchise owners sign agreements which require them to indemnify any such cost borne by a franchisor in addition to their existing obligations to their employees.
While CFA opposes the new joint employer standard generally, it acknowledges the need to protect franchisees from franchisor control, overreach and the ultimate goal of unionization. In order to promote good faith and fair dealing, CFA supports increased franchisee protections in the areas of disclosure, transfer/renewal/termination rights, pricing, sourcing and encroachment, among others. We urge the franchisor community to support and adopt the principles as set forth in the Uniform Franchisee Bill of Rights as well as in federal, state and local franchisee rights legislation.
