I had to share an excellent blog post on Seattle’s $15 Minimum Wage: Not Unconstitutionally Discriminatory? by Shannon McCarthy of the ZorBlog. My tongue-in-cheek title unfortunately rings some truth. If you read Shannon’s post you will see that the Seattle mayor and city council members are, shall we say, less than welcoming to franchisors and franchisees alike.
The issue is that most local franchise businesses are your small, local, mom-and-pop operation. They’re a small business much like the local business down the street. The thought of paying $15.00 minimum wage to employees is daunting at the very least and perhaps impossible if the local franchisee hopes to make a profit. They are the same people you sit by at your high school sports events, attend your church and serve on local boards.
The problem is that Seattle has said that small employers have seven years to conform to the wage minimum while large employers have only three years to comply (four years if they provide health insurance). Large employers are defined as companies that employ over 500 people AND all franchisees associated with a franshisor or network of franchisors that employs more than 500 people aggregate in the United States.
Try telling your local franchisee that he or she is a large employer. They would probably look at you with bewilderment! Perhaps downright shocked. But Seattle’s mayor and city council certainly don’t seem to care and if a franchise or two (or hundreds) are lost along the way then so be it. The perception is that these franchises are big business. Not your local mom-and-pop.
This is just another example of why you need to carefully consider franchising as a potential business option. It is important to understand that franchising presents just as many risks as opening your own independent business, and in some cases the risks could even be greater.