{"id":27201,"date":"2014-08-03T10:08:07","date_gmt":"2014-08-03T15:08:07","guid":{"rendered":"http:\/\/quotulatiousness.ca\/blog\/?p=27201"},"modified":"2024-07-15T18:40:26","modified_gmt":"2024-07-15T22:40:26","slug":"nlrb-decision-would-stick-a-fork-in-the-franchise-model","status":"publish","type":"post","link":"https:\/\/quotulatiousness.ca\/blog\/2014\/08\/03\/nlrb-decision-would-stick-a-fork-in-the-franchise-model\/","title":{"rendered":"NLRB decision would &#8220;stick a fork in the franchise model&#8221;"},"content":{"rendered":"<p>In <em>Forbes<\/em>, <a href=\"http:\/\/www.forbes.com\/sites\/timworstall\/2014\/08\/02\/the-feds-could-kill-off-the-entire-franchise-system-not-just-mcdonalds\/\" target=\"_blank\" rel=\"noopener\">Tim Worstall<\/a> explains why the recent decision by the US government&#8217;s National Labour Relations Board could destroy the franchising business model widely used by fast food chains:<\/p>\n<blockquote><p>The National Labor Relations Board (NLRB) made a very strange decision last week to rule that McDonald&#8217;s the corporation, was a joint employer of the staff in the franchised restaurants. It was, of course, at the urging of those labour activists who would like to union organise in the sector. Dealing with one national company is obviously going to be easier than dealing with thousands of independent business owners. There\u2019s a number of problems with this decision ranging from the way that it overturns what has long thought to be settled law, to it obviating already signed contracts but perhaps the greatest problem is that it calls into question the entire validity of the franchise system.<\/p>\n<p>[&#8230;]<\/p>\n<p>The franchisor though gets paid a percentage of pure sales: what the labour costs at the franchises is is no skin off their nose at all. So they\u2019ll not control it. The only major input that the franchisee can control in order to determine profitability would now become, at best, a join venture and we\u2019ve different incentives for each side of the bargain. That\u2019s just not going to work well. I don\u2019t think that Pudzer is being alarmist in stating that this ruling would stick a fork into the franchise model as a whole. You simply can\u2019t have such a system where the franchisees don\u2019t control <em>any<\/em> of their inputs.<\/p>\n<p>Of course, it\u2019s still open to someone to argue that the franchise system shouldn\u2019t actually exist, that it would be a good thing if everyone were either a truly independent organisation or part of a large and centrally managed group. But if that is the argument that\u2019s being made, or will be made, then it\u2019s a large enough change that it really needs to happen through political means, not administrative law. That means that if Congress wants to change the rules in this manner then that\u2019s up to Congress. But it really shouldn\u2019t be done by the decision of an administrative agency.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>In Forbes, Tim Worstall explains why the recent decision by the US government&#8217;s National Labour Relations Board could destroy the franchising business model widely used by fast food chains: The National Labor Relations Board (NLRB) made a very strange decision last week to rule that McDonald&#8217;s the corporation, was a joint employer of the staff [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[831,25,74,13],"tags":[1555,661,392],"class_list":["post-27201","post","type-post","status-publish","format-standard","hentry","category-business","category-economics","category-food","category-usa","tag-fastfood","tag-regulation","tag-unions"],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p2hpV6-74J","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/27201","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/comments?post=27201"}],"version-history":[{"count":2,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/27201\/revisions"}],"predecessor-version":[{"id":90467,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/27201\/revisions\/90467"}],"wp:attachment":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media?parent=27201"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/categories?post=27201"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/tags?post=27201"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}