Franchising: Can't We Just Get Along

Shelton Law & Associates

Date

Mar 23, 2016

I had the great pleasure this month to join the IFA's Franchise Action Network and California Franchisors and Franchisees for the annual California Franchising Day at their state capitol. This year Franchising Day happened on March 8th, which was also International Woman's Day.

It's fitting that on International Women's Day many of our own franchise partners were meeting with lawmakers in Sacramento to advocate for franchise small business! They are passionate about their people, their industries and protecting jobs! #internationalwomensday #IFA2016.

"You can't have employers without employees and you can't be an employee without an employer" Evan Low, CA Assemblymember, 28th District I met with Assemblymember Evan Low last week during the IFA Franchise Day group. During our discussions, which by the way, were so refreshing! Mr. Low made a statement that many times the two sides are too far apart for no reason, refusing to see the life from the other sides point of view. He reminded us that “You can’t have employers without employees and you can’t be an employee without an employer.”

Further he pleaded with us to spread the word, to “encourage everyone to get involved within your community,” to talk with their assembly persons and share their personal experiences with them no matter which side you fall on, Franchisor or Franchisee. When our bill makers are voting, this enables them to think personally when considering a proposed bill. They can think how would this play out and effect Bill's business. What would this do to Barb's bottom line? Would Joy be able to easily comply with this law?

An example of this situation is the circulating bill SB878 called the Reliable Scheduling Act, which would apply to both food and general retail establishments, and in essence would require employers to schedule employees for at least 21 consecutive calendar days or three weeks in advance. From the personal individual’s perspective, that sounds great; people would be able to plan personal time with their families. But when speaking with franchisee owners we learned that if that Bill is enacted, it would be extremely harmful to the success of their business. Especially in service related businesses, they can't schedule employees based on how many jobs they have scheduled three weeks out because more often than not, there are none on the books that far out. They get calls for work that same day or during the same week. And if they had no work on a particular day and sent an employee home, this Bill would require them to pay a penalty to the state and a penalty to the employee even though the business received no income that day. As one franchise owner stated, it would force them to create a kind of a slush fund for potential pay, thus reducing the amount they had to hire and pay on a regular ongoing basis, which could lead to letting one or two people go that are currently employed. Some Assemblymembers and Senators were perplexed to learn about this side of the coin.

Californians are lucky to have Assemblymember Low who has personal experience with the franchise wars and franchisees within his district. He also has friends who have purchased a franchise so he has the ability to look at the proposed bill through knowledgeable eyes. But many of our elected officials do not have such an experience to draw from. It's up to us as members of the franchise industry and local community to share our stories, to share our struggles, and to share what our outcome would be if proposed bills are passed.

Every states bills are different, and this one was just used as an example. There will never be a perfect scenario for both sides, but by ensuring we share the real life outcome with our elected officials, we can assist them in doing what is in the best interest for both parties.

Author: Lynne Shelton, Esq. CFE

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