More than 800,000 people work at a McDonald’s restaurant in the U.S. But the question of who works for McDonald’s is a thornier one. Today, about 95% of the restaurants bearing the Golden Arches are franchises. And McDonald’s Corp. is quick to say that the workers flipping burgers, running registers, and mopping floors at those restaurants are employed by the franchisees, not the company headquartered in Chicago’s West Loop.
But for McDonald’s—one of the biggest franchise companies in the world—and others whose business model depends on franchising, the rule has the potential to be, at the least, a very expensive problem.
The current upheaval over the NLRB proposed rule is just the latest in a long push-pull over the responsibilities of franchisors, led by whichever party currently holds the White House and with it, the power to appoint a majority of the agency’s five-member board. Under the National Labor Relations Act, the NLRB investigates and hears cases on workers’ rights to organize in a union, or take part in activities like protesting work conditions, even if they’re not in a union.
Heightened joint-employer liability could hurt the franchise model in two main ways, according to the International Franchise Association. One possibility, along the lines of what Kempczinski described, is that a franchisor would exert more control over the franchisees. That undercuts one of franchisors’ big selling points to potential franchisees—that they’re offering a path to running their own business, with all of the freedoms that provides.
Source: News Formal (newsformal.com)
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