October 5th, 2017
Orlando Sentinel: Franchisees, Let us manage our companies without answering to franchiser
By Azin Saju | I am a Central Florida entrepreneur and a franchisee in the hotel business based in Ocala. When we hire, we invest in talent by paying a wage in addition to improving the employee’s skill set with online training. While the franchise business model gives us the national recognition of a brand and reduces some risk in starting our own business, we make localized decisions on promotions, scheduling and wages.
According to the Small Business Administration, two-thirds of all jobs are created because of small, locally owned businesses. The average franchise creates 10 new jobs per location. This, coupled with the training individuals receive, makes a huge impact on local communities.
I am one of many who supports the Save Local Business Act, which is similar to legislation that nearly passed in 2015 and is needed now more than ever. This act counters the National Labor Relations Board’s August 2015 ruling that adopted a broad joint-employer standard based on “indirect” or “potential control” of employees. This means franchisers can be held liable for a franchisee’s employees. This ruling has caused great confusion among the business community, which is asking for Congress’ help to provide clarity. We have been working under a cloud of uncertainty since the 2015 ruling, and it is time to make changes.
Franchising has given immigrants, like my parents, the opportunity to be in business for themselves, but not by themselves. The expanded joint-employer doctrine would mean that our franchiser, based in another state, would now exercise control over our hiring, promotions, scheduling and all other practices related to managing our business. This would remove our ability to make decisions such as promoting employees, giving wage increases and accommodating schedules.
If the new limitless joint-employer standards are left unchecked by Congress, the consequences would be harmful for businesses, where stories of personal and professional growth and entrepreneurship are prevalent. We have many individuals who started with us at entry-level positions and are now in management positions because of the training they have received and our ability to promote them. Our franchiser is not qualified to make such decisions because it often is located in a different state and does not know our individual employees.
Franchising is a model that works and continues to produce jobs, allowing many individuals economic opportunity. In this case, legislative action is necessary to allow franchises to operate at their full, job-creating capacity.
We applaud leaders in the House of Representatives who have introduced bipartisan legislation to restore the original intention of the joint-employer standard. The Save Local Business Act (H.R. 3441) would restore certainty for Florida businesses and employees. We urge our Florida members of Congress to support this important legislation.
Azim Saju is the managing member and general counsel of HDG Hotels, a hotel management and development company.