The Bundy Law Firm is proud to that its associate, Caroline Fichter is the 2016 recipient of the American Bar Association Forum on Franchising Chair’s Award for Substantial Writing Work or Presentation for her law journal article “Surviving the Tempest: Franchisees in the Brave New World of Joint Employers and $15 Now.” In the article, Caroline and her co-author, Erin Conway of the Garner & Ginsburg firm in Minneapolis, explore the ramifications of recent national labor board decisions and minimum wage increases from a franchisee perspective.
Ms. Fichter summarized recent minimum wage legislation in California, Seattle and New York. She discussed how the new legislation is likely to effect franchisees and how franchisors can help their franchisees adjust. Many new minimum wage laws are either directed specifically at franchisees (such as New York’s statute) or groups franchisees with large corporations and require franchisees to implement minimum wage increases faster than other small businesses. She explained that while franchisor organizations such as the International Franchise Association have been quick to challenge the statutes in court, they have not shown any willingness to address how the industry can adapt to support franchisees.
In her article, Ms. Fichter discussed how the exponential increase in average franchise royalty fees, the increase in additional fee based services and the drift toward greater franchisor control undermined a franchisee’s success even before a minimum wage increase. Unlike other small businesses, franchisees are paying a significant portion of their income to a franchisor and are required to run their businesses in a very specific manner. Any other small business could adapt to a minimum wage increase through cost cutting measures such as reducing staff, changing suppliers or adjusting the range of products and services. Franchisees do not have that option.
In giving her the award, the ABA Forum on Franchising recognized the complexity of the minimum wage issue and Ms. Fichter’s competency in addressing that complexity. Ms. Fichter brings the same skills to her work with clients at the Bundy Law Firm. In the last election, voters approved every minimum wage increase that was on the ballot. Franchisees and franchisors can survive a minimum wage increase by making smart tactical choices. Experienced franchisee legal counsel can help.