Book: Franchising & Licensing: Two Powerful Ways to Grow Your Business in Any Ec
ID: 457358 • Letter: B
Question
Book: Franchising & Licensing: Two Powerful Ways to Grow Your Business in Any Economy / Edition 4
Chapter 7: Structuring Franchise Agreements, Area Development Agreements, and Related Documents
On page 109, the legal status of franchisee is discussed.
Recently this issue has come under fire by those wishing to raise the minimum wages and have employees of franchises gain additional employment benefits, such as: health care and retirement.
The Franchisors, such as McDonald’s and Wendy’s argue that the franchisees are the employers of the front line help and not the franchisor. With this argument, the franchisors are attempting to move liability to the franchisee.
The labor groups state that the franchisor is the ultimate employer of all people working under the franchisor’s name.
The franchisee is caught in the middle.
Based on your reading in the text and what you can find on the Internet, share your sense of who may be right – who should be liable for the pay of the individuals working the front lines. Defend your choice with additional information.
Explanation / Answer
The administrative law judge adjudged asMcDonald's could be held jointly liable with franchise operators who were accused of firing, threatening or penalizing workers who participated in strikes demanding a $15-an-hour minimum wage.