Setback in Seattle for IFA and franchise owners.

Earlier this week, a Washington federal judge rejected the argument of the International Franchise Association that Seattle’s new minimum wage law unfairly targets franchise owners in Seattle.  The new law will raise the minimum wage in Seattle to $15 per hour over the next several years.  The focus of the IFA’s court action was not whether the city had the power to raise the minimum wage, but the way the increase is to be implemented.  Small businesses will be allowed to implement the increase over a seven year period while large businesses (500 employees or more) must implement the increase in only three years.  However, the law places franchise owners in the large business category regardless of the number of employees the franchisee actually employs.  On its face, the law seems to unfairly burden franchise owners simply because they operate using the business format and trademarks of the franchisor.   As franchisees know, ownership of an independently owned franchised business does not equate to being a “large business” employing 500 people.  In fact, most franchised businesses are small, locally owned and lack the resources of companies who employ 500 or more people.   The IFA stated that it will continue its’ fight against a law that it perceives to unfairly discriminate against franchise owners.

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Filed under Franchise Basics, Franchise Insight, Franchise Law, In The News, Restaurant & Hospitality Law, The Franchise Legislation Monitor

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