The top story in franchising this week — which has dominated the headlines — is the minimum wage battle in Seattle.
The story, in brief: the Seattle City Council has voted to require Seattle's small businesses to raise the minimum wage of their workers from the current level to $15 an hour. Under this new ordinance, businesses with more than 500 employees have 3 to 4 years to increase the minimum wage to the new $15/hour level, while "small businesses," defined as businesses with fewer than 500 employees, have up to 7 years to reach the new level.
The problem? For the purpose of calculating the "500 employees" number, all franchises in the same system are counted together. The net result of this is that these locally-owned small businesses with a few employees, which also happen to be franchises, are being discriminated against as compared to their non-franchised counterparts.
Unsurprisingly, this is a hugely unpopular move in the franchising industry and an issue that has united both franchisors and franchisees. The International Franchise Association has announced that it will be filing a lawsuit against Seattle to protect franchisees and franchising in the city.
Here are this week's most interesting stories in franchising:
- Editorial: Redefine franchises under Seattle’s minimum-wage proposal
- IFA to File Lawsuit Against Unfair and Discriminatory Seattle Minimum Wage Plan
- An Open Letter to the Mayor of Seattle
And the non-Seattle related story:
Finally, if you haven't already done so, please read my two recent posts in a new series about common mistakes made by franchisors in their Franchise Disclosure Documents.