by CHIP ROGERS
AAHOA President & CEO
In towns and cities across America, small businesses stimulate and sustain employment, consumer spending, business-to-business enterprise and local government coffers.
In fact, industries that support the national economy – hospitality, food and beverage, automotive, construction, real estate, finance and entertainment, among many others – thrive because of these small businesses owners in Small Town, U.S.A. And many of them, more often than not, operate as franchisees under a larger corporate brand.
The economic stability and growth that small businesses provide, however, is at risk of being derailed due to a brazen move by the National Labor Relations Board (NLRB) in April 2015 to expand the long-established definition of the joint-employer standard.
The new standard places a franchisee’s daily operations – a considerable percentage of which is employee management – under the control of the franchisor. Large corporations faced with increased costs and liabilities may choose to mitigate the risk by breaking ties with local franchisees, contractors and other local partners. The trickle-down effect would cause significant harm to local communities and the people who live there.
Furthermore, the arrangement undermines the purpose and benefits of franchising, including free enterprise and pride of ownership, and both franchisees and franchisors have been outspoken about the undesirability of this change.
A few months ago, Rep. Bradley Byrnes, a Republican from Alabama, authored a bipartisan bill, H.R. 3441, also known as the Save Local Business Act, which would revert expansion of the joint-employer standard back to its former definition. Congressman Byrnes and several other co-sponsors of the bill have said that it is the federal government’s duty to find ways to help small businesses grow instead of creating barriers that do just the opposite.
Though the bill has been introduced in the House and support is growing, it still needs additional bipartisan endorsement to pass the Senate. At the end of October, it did not yet have a single senator to author or sponsor the bill.
Given the critical impact that the loss of small businesses will have on the U.S. economy, and ultimately the livelihoods of our friends, family and neighbors, I strongly urge you to reach out to the senators in your home states to remind them about this important measure.
Stand with me and AAHOA’s 17,500 members to protect franchising – one of the greatest vehicles for success in American business today.