Fast Food Owners and Workers Unite to Strengthen Jobs, Business

By Kathryn Slater-Carter and Jon Youngdahl

News headlines often depict the growing economic divide in our nation as a tug of war between workers and business, but in one critical sector of our economy – franchise enterprises — entrepreneurs and workers are both being pushed into economic peril.  Workers and franchise business owners are both being squeezed by giant corporations like McDonald’s, having critical decisions that affect their livelihoods and their dignity forced on them by a faceless corporate headquarters.  Workers and franchise owners alike face retaliation and the loss of their income if they speak out.  For these reasons, both workers and franchise owners are coming together to fight for AB 525 (Holden), a bill that protects jobs by giving franchisees a fair shake so they can keep and grow the businesses they’ve nurtured.

A generation ago, McDonald’s valued its franchisees as partners who built the strength of the brand in communities across the country.  Now, McDonald’s and other corporations built on the franchising model have gone the way of so many other industries that look to post short-term gains rather than build real value, even if it means driving franchise owners and workers into poverty.

Today, franchise agreements are so one-sided, franchisees have virtually no say in the businesses they’ve risked their life savings and dedicated years of their lives to build.  Corporate headquarters control nearly every aspect of the business, can force new and unexpected costs onto franchise owners, and franchise owners can be punished for speaking out or joining with other franchise owners to improve business conditions.  Franchises can even be shut down for arbitrary reasons, as Kathryn Slater-Carter experienced firsthand after working 30 years to build her Bay Area McDonald’s franchise.  

A survey of 1,100 franchise owners released in April found Kathryn’s case is far from an isolated incident.  Dissatisfaction with franchisors — the parent corporations of franchise businesses – is widespread, and retaliation against franchise owners who speak out about problems is frequent.   More than half of franchisees say they can’t earn a living from their business.  Four in 10 reported threats of having their franchise agreements terminated for taking actions they thought were appropriate for their business, and nearly 20% said their franchisor increased the frequency of inspections after the franchisee raised questions or spoke out about problems.

California franchisees and workers are both striving to be a part of California’s economic future and AB 525 brings us one step closer to stabilizing small businesses so they can continue serving the needs of California’s communities and strengthen the jobs that build our economy and provide for families.  

The bill, the Small Business Investment Protection Act, would significantly expand the rights of franchisees and establish stronger protections against unfair termination or nonrenewal of contracts by franchisors.  California workers support the bill because they know when franchisees can make decisions that are in the best interest of their businesses, they can invest in their employees.

Franchise owners and workers want the same thing – a fair shot at the American Dream.  That’s why we’ve formed an unlikely alliance to support AB 525.  By ensuring franchisees have a fair shot at surviving as corporations squeeze more and more from franchisees and workers, AB 525 protects California small businesses and jobs.

Kathryn Slater-Carter was a McDonald’s franchise owner for more than 30 years.  Jon Youngdahl is the Executive Director of the Service Employees International Union (SEIU) California, which includes 700,000 private and public sector workers as members.

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