Newsletters
News & Information for Technology Purchasers NewsFactor Sites:       NewsFactor.com     Enterprise Security Today     CRM Daily     Business Report     Sci-Tech Today  
   
This ad will display for the next 20 seconds. Click for more information, or
Home Enterprise I.T. Cloud Computing Applications Hardware More Topics...
Business Briefing
DDoS Protection Powered By Verisign
Average Rating:
Rate this article:  
Minimum Wage Issue Pits Franchisees Against Cities

Minimum Wage Issue Pits Franchisees Against Cities
By Joyce M. Rosenberg

Share
Share on Facebook Share on Twitter Share on Linkedin Share on Google Plus

Measures are cropping up in cities across the U.S. proposing higher minimum wages. While small businesses will be given more time to phase in the wage hikes, franchisees, which have ties to bigger corporations like restaurant chain Denny's, Dunkin' Donuts and Merry Maids won't get the reprieve even if they have just a handful of workers.
 


Hundreds of franchisees are learning they're not small businesses, at least in the eyes of city government. A new law that will raise Seattle's minimum wage to $15 from the current $9.32 gives small businesses more time to phase in the 61 percent increase -- seven years versus three for large companies. But franchisees, which have ties to bigger corporations like restaurant chain Denny's, Dunkin' Donuts and Merry Maids won't get the reprieve even if they have just a handful of workers.

It's an issue that could affect thousands more businesses in cities where campaigns for a higher minimum wage are underway. In Chicago, lawmakers have proposed a similar measure that would exempt small businesses but not franchise restaurants. Franchise owners say the laws will sharply increase their payroll costs, and threaten to make them less competitive with independent businesses that won't have to comply -- and that they could be forced to raise prices and cut jobs.

"It's unfair, arbitrary and discriminatory against franchise owners," says Steve Caldeira, CEO of the trade group International Franchise Association.

The IFA has filed a federal lawsuit seeking to overturn the Seattle law, arguing it violates the U.S. Constitution by treating franchises and other small businesses unequally. The IFA also opposes the law proposed for Chicago and efforts to pass similar laws in other major cities including Boston, Philadelphia and San Francisco.

In the eyes of the U.S. Small Business Administration, franchises are small businesses. Many franchises are owned by people who have at most a few locations. Some owners are corporations that own dozens or even hundreds of restaurants like McDonald's or Pizza Hut.

It's the ties to bigger companies -- known as franchisors -- that supporters of the laws cite as a reason why individual franchise owners shouldn't get a break.

Franchise owners have advantages the independent owners don't have -- for example, menus and advertising supplied by the franchisor, Seattle Mayor Ed Murray said in a statement responding to the lawsuit filed June 11, a week after he signed the minimum wage bill into law. His office did not respond to requests for comment for this story.

Franchisees counter that they have to pay for the privilege of owning a franchise, and for the services franchisors provide. Chuck Stempler, a plaintiff in the IFA lawsuit, says he pays $400,000 a year in fees to AlphaGraphics for the six printing and marketing businesses he operates in Washington and California. Seattle's Mayor Murray says franchisees and franchisors should renegotiate those fees so business owners have more money to pay their workers. (continued...)

1  |  2  |  Next Page >

 


© 2014 Associated Press under contract with NewsEdge. All rights reserved.
 

Tell Us What You Think
Comment:

Name:



Salesforce.com is the market and technology leader in Software-as-a-Service. Its award-winning CRM solution helps 82,400 customers worldwide manage and share business information over the Internet. Experience CRM success. Click here for a FREE 30-day trial.


 Business Briefing
1.   Google Buys Contextual Image Startup
2.   Google IPO Began Decade of Big Bets
3.   FBI Cybersquad To Add Agents
4.   Android Crushing Smartphone Rivals
5.   Pre-IPO Alibaba Has Accounting Woes


advertisement
Product Information and Resources for Technology You Can Use To Boost Your Business

Network Security Spotlight
Chinese Hackers Nab Info on Millions of U.S. Patients
A group of Chinese hackers has stolen the personal information, including names and Social Security numbers, of about 4.5 million patients at hospitals operated by Community Health Systems.
 
Premier FBI Cybersquad in U.S. To Add Agents
After helping prosecutors charge Chinese army officials with stealing trade secrets from major companies and by snaring a Russian-led hacking ring, the premier FBI cyber-squad is getting a boost.
 
Apple Opens iCloud Data Center in China
Treading lightly, Apple acknowledged it has started to store encrypted iCloud personal data of some Chinese users on servers in mainland China, operated by the state-owned China Telecom.
 

Enterprise Hardware Spotlight
Compression, Deduplication Come to Violin Concerto 2200
Violin Memory has announced that data deduplication and compression capabilities are now available on its Concerto 2200 solution. Typically, users will experience deduplication rates between 6:1 and 10:1.
 
Cisco Axes 6,000 Employees in Restructuring Plan
Faced with declining profits, Cisco is laying off up to 6,000 employees in the months ahead -- a whopping 8 percent of its global workforce. That's in addition to the 4,000 jobs Cisco cut last year.
 
Web Slows, Have Internet Routers Reached The Limit?
If you encountered problems connecting to the Internet on August 12, you weren't alone. Networking experts blame the wide-scale slowdown on outdated routing systems that are reaching their limits.
 

Mobile Technology Spotlight
HTC Debuts Windows Phone Version of One M8 Smartphone
HTC is bringing the Windows Phone mobile OS to its flagship One M8 device -- the first time any mainstream flagship smartphone has been offered with a choice of operating systems.
 
Verizon Earns Top Rating in Mobile Network Comparison
A new report says Verizon Wireless was the top-performing U.S. cellphone service provider in the first half of 2014, on a nationwide and state-by-state basis, as well as in metro areas.
 
Sprint Comes Out with Data Guns Blazing
As its new CEO promised, Sprint has rolled out a new aggressively competitive price plan. The shared data plans promise twice the high-speed data and at lower prices than AT&T and Verizon Wireless.
 

Navigation
NewsFactor Network
Home/Top News | Enterprise I.T. | Cloud Computing | Applications | Hardware | Mobile Tech | Big Data | Communications
World Wide Web | Network Security | Data Storage | CRM Systems | Microsoft/Windows | Apple/Mac | Linux/Open Source | Personal Tech
Press Releases
NewsFactor Network Enterprise I.T. Sites
NewsFactor Technology News | Enterprise Security Today | CRM Daily

NewsFactor Business and Innovation Sites
Sci-Tech Today | NewsFactor Business Report

NewsFactor Services
FreeNewsFeed | Free Newsletters

About NewsFactor Network | How To Contact Us | Article Reprints | Careers @ NewsFactor | Services for PR Pros | Top Tech Wire | How To Advertise

Privacy Policy | Terms of Service
© Copyright 2000-2014 NewsFactor Network. All rights reserved. Article rating technology by Blogowogo. Member of Accuserve Ad Network.